RETAIL NEWS FLASH October 06, 2014
Table of Contents Sales & Marketing ................................................................................................................. 3 Ecommerce Operations ......................................................................................................... 7 Strategic Initiatives .............................................................................................................. 11 Other Key Developments ..................................................................................................... 20
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Sales & Marketing Amazon plans direct sales of foreign merchandise September 29, 2014 | ECNS http://www.ecns.cn/business/2014/09-29/136717.shtml AS early as next month, Amazon.com, the biggest e-commerce site in the United States, will begin offering direct services to China's mainland, allowing customers in the world's largest Internet market to buy foreign products in yuan. Amazon has been in China for 10 years, in name more than services. In 2004, it bought a Chinese website called Joyo, which sells 25 million mostly domestic products to consumers in yuan. In the past, people who wanted to buy foreign products from Amazon's international sites had to pay in dollars and foot overseas shipping costs. That's about to change as Amazon.com takes advantage of relaxed trade policies in the new China (Shanghai) Pilot Free Trade Zone, allowing it to sell products from abroad to Chinese consumers paying yuan. Foreign-sourced goods will be shipped to the zone and stockpiled in Amazon warehouse facilities there. Amazon's new service has attracted widespread attention on cross-border e-commerce. "It's still in its infancy in China," said Tian Zheng, a researcher at Beijing-based IT consulting firm Analysys International, "but it possesses great market potential and opportunities." China has almost 300 million online shoppers, and the figure continues to expand, especially amid the rising popularity of using mobile phones to make purchases. In 2013, online commerce was valued at 2.7 trillion yuan (US$440 billion), up almost 29 percent from a year earlier. The majority of that volume came from Chinese e-commerce exporters, according to Analysys. In the second quarter of this year, China's business-to-consumer e-market totaled 320 billion yuan, up 72 percent from a year earlier. "China's e-commerce market is one of the most dynamic in the world," said Diego Piacentini, senior vice president of Amazon International. "It is still Day 1 for us, particularly in the area of cross-border e-commerce." With its presence in the free trade zone, Amazon is aiming to ratchet up the competition with domestic online retail rivals in a market dominated by Alibaba's Tmall and JD.com, analysts said. Amazon China has about 7.85 million users, trailing Tmall's 98 million users, JD.com's 41 million and Dangdang.com's 9.2 million, said Analysys. Though no official timetable has been announced for the start of the new Amazon direct service, it will begin in the fourth quarter, according to sources familiar with the issue.
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In August, Amazon signed agreements with the Shanghai Free Trade Zone and Shanghai Information Investment Ltd to develop its first cross-border e-commerce trade on the mainland. The arrangement will give consumers access to all products available through all Amazon sites and also will offer Chinese sellers access to the company's global customer base. Amazon is looking forward to working with its Shanghai partners to develop this "incredible" opportunity and will offer the "best cross-border shopping experience," Diego said. Chinese consumers, especially in major cities, often prefer to buy products such as milk powder, baby-care items and luxury watches from overseas to skirt domestic food-safety scandals and unreasonably high prices for foreign products in the domestic market. The new service will establish Shanghai as a recognized international cross-border e-commerce center and a hub for international trade and commerce. "We seek to be the most customer-obsessed online shopping platform in China, with a vast selection, competitive pricing and the most convenient service," said Doug Gurr, Amazon China president. After acquiring Joyo, Amazon invested in 13 distribution centers, enabling the site to deliver to around 3,000 cities and counties across China. In 146 cities, deliveries were promised one or two days after an order was placed. Logistics center Amazon is planning to establish a logistics and warehouse center in the free trade zone, where goods can be brought in from Amazon's overseas sites and vendors can enter China through a special platform. Under the new deal, consumers will get access to a world of products, which are expected to be delivered in seven to 10 days, according to Shanghai Information Investment. Industry insiders said delivery times may be as short as to one or three days, depending on stocks and logistics. As a prelude to its new direct service, Amazon has been gradually reducing shipping fees for Chinese consumers since August. "They dropped by half or more in the past month," said Tracy Fan, a Shanghai worker who often buys cosmetics from Amazon.com. It's a competitive market even for a global name like Amazon. "Amazon's entry will influence the domestic e-commerce market but in a limited range," said Tian, adding that Amazon and its partners will have to solve problems related to logistics, pricing and services. Amazon has been in talks with local logistics company SF Express to improve the new service, Chinese media reported. Still, the company's services and logistics model in China isn't nearly as developed as that of rivals like Tmall and JD.com, industry insiders said. The new free trade zone channel will allow products from small and medium-sized companies in China to be exported to Amazon customers across the globe.
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In 2013, the number of cross-border Chinese sellers jumped 196 percent from a year earlier, covering sectors such as apparel and consumer electronics. Amazon has established special teams in Shanghai, Beijing and Guangzhou to help Chinese mainland exporters.
After five years in the making, Microsoft's first flagship retail store is finally coming to Fifth Avenue September 28, 2014 | Winbeta http://www.winbeta.org/news/after-five-years-making-microsofts-first-flagship-retail-storefinally-coming-fifth-avenue Microsoft has been opening up brand new retail stores across the United States all year long, but one thing has been missing. Microsoft does not have a flagship retail store. This all changes as Microsoft has confirmed that they are setting up shop at 677 Fifth Avenue in New York City. As Microsoft continues to expand its retail presence, the company will be opening its first flagship retail store. This has been five years in the making. Currently at the location is a Fendi shop, and the entire Upper Fifth Avenue location is a well-known high-end retail shopping destination for customers. "As our first flagship store, it will serve as the centerpiece of our Microsoft Stores experience. This is a goal we've had since day one - we were only waiting for the right location. And now we have it," said David Porter, corporate vice president for Microsoft retail stores. Interestingly enough, this store will be just blocks away from Apple's flagship store, which happens to be surrounded by glass. Microsoft wants to deliver a premium retail experience that is not only entertaining, but also offers consumers an excellent selection and service with their purchases. A typical Microsoft Store offers an assortment of products, including Windows 8.1 desktops, tablets, laptops, Windows Phone devices, Xbox One, Office 365, and much more. Customers can also receive service, get recommendations, and receive help with PC setups. These services ensure that the customer walks out of a Microsoft Store ready to operate their new machine. Microsoft is looking to make the Fifth Avenue store "more than just a Microsoft Store." No details have yet been revealed but this flagship store is expected to have an "experiential space" for the company to showcase its products and services, as well as engage with consumers. Microsoft is also expected to open roughly 10 new stores by the end of the year.
Ace Hardware partners with eBay for expanded in-store pickup September 22, 2014 | Fierce Retail http://www.fierceretail.com/story/ace-hardware-partners-ebay-enterprise-store-pickup/2014-0922 Ace Hardware has partnered with eBay Enterprise (NASDAQ:EBAY) to expand its in-store pickup option. The partnership is intended to help Ace enhance its omnichannel capabilities, drive sales and generate customer acquisitions.
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The companies first partnered in 2013 to pilot the in-store pickup program. The initial implementation included 36 stores, but Ace continues to build out the program in 50 stores per month. More than 500 stores offered in-store pickup by the end of July. The retailer has seen a resulting 18 to 20 percent increase in e-commerce sales, as well as overall sale growth and an influx of new customers. "We had been searching for a solution to help us acquire new customers and drive additional sales to our brick-and-mortar locations," said Jeff Gooding, director of consumer marketing at Ace. "The decision to implement eBay Enterprise In-Store Pickup has had immediate positive effects for us. The flexibility, ease of use, extensive training at the local store level and support from eBay Enterprise for our retail associates was key to making this initiative successful." Ebay Enterprise has provided Ace with other solutions including a Web store, marketing solutions, drop ship, fulfillment and customer service. "Local is one of the key battlegrounds for retailers looking to create a competitive advantage," said Tom Barone, head of omnichannel operations for eBay Enterprise, North America. "Ebay Enterprise is leading store fulfillment globally with quick-to-implement solutions live in North America, Europe and Asia." Buy online, pick up in-store programs are becoming increasingly popular with retailers as they look to expand omnichannel capabilities. Many retailers, ranging from Whole Foods (NASDAQ:WFM) and Peapod to UPS and Staples (NASDAQ:SPLS), are now offering an in-store pickup option as consumer demand increases. Just last week, Pier 1 Imports (NYSE:PIR) reported that in-store pickup now accounts for one-third of Pier.com order fulfillment.
Kroger piloting click-and-collect service September 18, 2014 | Fierce Retail http://www.fierceretail.com/story/kroger-piloting-click-and-collect-service/2014-09-18 Kroger's (NYSE:KR) Liberty Township Marketplace in Ohio is piloting a click-and-collect service in which customers submit orders online and pick up groceries at a drive-thru window. Kroger's test is using the same technology currently deployed by Harris Teeter, the chain the company acquired for $2.5 billion last year, reported Progressive Grocer. "A 'shop online, pick up in the store' model is an exciting opportunity for Kroger and our customers," Rachael Betzler, public relations manager for Kroger's Cincinnati/Dayton division, told Progressive Grocer. "Harris Teeter has successfully scaled this model in their stores and we are learning a lot from them about it. Our approach with new technologies and systems is to test small and work out the kinks before scaling more widely." Details of the service were not available. However, Harris Teeter customers pay $4.95 per order, $16.95 for 30 days, or $99.95 per year to have their orders ready for pick up within four hours. The click-and-collect program is the latest move by Kroger to advance its digital platform. The company recently purchased e-commerce company Vitacost.com for $280 million to advance its online and healthy-living market. The company is on an upward trend. It recently reported the 43rd consecutive quarter of same-store supermarket sales growth.
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Ecommerce Operations Walmart adds click and collect for groceries September 29, 2014 | Retail Analysis http://retailanalysis.igd.com/Hub.aspx?id=23&tid=3&nid=13046 Walmart has opened its first standalone pick-up facility for online grocery orders in the US. Building on existing tests The opening of this 15,000 sq ft facility is a further milestone for Walmart in terms of its push towards offering groceries online. its initiatives in this area have accelerated significantly over the last year. Last October it expanded the test of Walmart-To-Go to the Denver area, using local stores for order fulfillment, contrasting with its DC based model in the San Francisco area. It has also added click and collect as an option as part of the Denver test, and is testing collection lockers in Washington, DC. Taking learnings from its UK operations Located in its home town of Bentonville, shoppers using this new facility order online from a dedicated website, and then drive up to collect their groceries at a pick-up time ranging from two hours to three weeks after the order is placed. Around 10,000 products are available at the dedicated facility. Remote collection points for online groceries have been growing in popularity, particularly in Europe. In developing this facility, Walmart has taken learnings from its UK subsidiary Asda, which has introduced a range of convenient options for its ecommerce shoppers including pick-up at store, fuel stations and remote collection points. Important model for North America Store pick-up, or click and collect is expected to become the main model for grocery ecommerce in North America. Ahold’s Peapod service has been rolling out additional store pick-up sites in the US, while Loblaw in Canada is due to launch its first test of the service in Toronto. This model is popular with both shoppers and retailers; shopper appreciate the time-saving and convenience of being able to integrate the pick-up into existing journeys, while for retailers it avoids the costly and complex last leg of delivery to shoppers’ homes.
Chinese shoppers favor U.S. retailers online September 29, 2014 | Fierce Retail http://www.fierceretail.com/story/chinese-shoppers-favor-us-retailers-online/2014-09-29 U.S. e-commerce sites are the most popular destinations for Chinese online shoppers. According to a recent study by Visa, which looked at transaction data between 2011 and 2014, Chinese shoppers purchased 13 times more often on U.S. retail sites than the average for the overseas markets.
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Amazon Lets You Add Items to Your Wish List Directly From Twitter September 25, 2014 | Gadgets NDTV http://gadgets.ndtv.com/internet/news/amazon-lets-you-add-items-to-your-wish-list-directlyfrom-twitter-597776 Amazon, a popular e-commerce giant, has collaborated with Twitter to introduce its new feature #AmazonWishList that lets buyers add items to their Amazon Wish List carts right from the microblogging website. To experience the feature, users would have to link their Amazon accounts with Twitter. This process was first unveiled with #AmazonCart back in May (it rolled out to India in July). Users can visit this page to link their Amazon accounts with Twitter. Just like #AmazonCart, with #AmazonWishList users can reply to a tweet containing an Amazon product link with the hashtag to add the item to their Amazon Wish List. Users will also receive a confirmation reply tweet from @MyAmazon along with an email. Those who haven't yet linked their accounts, will be notified to do so when they try replying with the relevant hashtag. Users can edit connection preferences here. "Twitter offers Amazon customers a great environment for inspiration and discovery," said John Yurcisin, Director of Social at Amazon in a statement. "#AmazonWishList makes it easy for people to quickly add holiday gifts, décor or entertaining items tweeted by interesting people, friends, or brands on Twitter to their Amazon Wish List, allowing customers to simply save items to their Wish List and keep on Tweeting," he added. Notably, the #AmazonWishList service only works with public accounts and not with accounts that are protected. Any item added to the user's Amazon Wish List with the Twitter hashtag method would be added to a separate wish list titled '#AmazonWishList'. Besides using the service for physical items, the #AmazonWishList also lets customers add digital content in the same way via a reply tweet. While content like apps or ebooks will be added in the user's wish list, Amazon Instant Video and Prime Instant Video titles will be added under the customer's 'Watch List'. On a related note, Amazon India on Tuesday kicked off the new Release Day Delivery or RDD service along with the release of the Microsoft Xbox One console in the country. The service was introduced with the video game category, and will be made available for other categories soon.
Amazon India offers Release Day Delivery, posts video of happy customer September 23, 2014 | Mobiletor http://www.mobiletor.com/117048/amazon-launches-release-day-delivery-posts-videocustomer-going-crazy-happy/ Amazon India has launched its brand new Release Day Delivery (RDD) service in an effort to win a bigger customer base in a country where Flipkart is the king of online retail sites. It has also posted a video of a Mumbai buyer going crazy happy and feeling ‘real special’ after he got his Microsoft Xbox One delivered to him at midnight.
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Amazon India already has a program called one-day delivery in place, just like rivals Flipkart and Snapdeal. But on the same day it let loose the Xbox One gaming console in India as part of an exclusive partnership with Microsoft, the online seller also announced the roll-out of Release Day Delivery (RDD). As you can guess from the term, this means that any products purchased from Amazon India which are marked for RDD will make their way to customers’ doorsteps on the very day they hit availability on the e-commerce website. Of course, the Amazon RDD service may not be practical unless you’re talking about buyers pre-ordering items through the website. But we did previously note that Amazon was offering a window of a few hours within which gaming enthusiasts in certain parts of the country could have booked the Xbox One and expected delivery on the same day it was released. Posted below is a video of one Jay Kumar who was excited to receive the console at midnight on September 23. Since the RDD service was thrown open along with the launch of the new Xbox, many customers in more than 35 cities across India welcomed their packages on the date of it being made available. Amazon went so far as to organize midnight deliveries of the Microsoft device in Bangalore, Mumbai, New Delhi, Hyderabad, Chennai, Pune, Ahmedabad and Nagpur.
Alibaba aims to create a $163 billion loan portal September 23, 2014 | Internet Retailer http://www.internetretailer.com/2014/09/23/alibaba-aims-create-163-billion-loan-portal Small businesses and individuals will be able to borrow from investors. Alibaba Group Holding Ltd.’s finance arm aims to create a marketplace for 1 trillion yuan ($163 billion) of loans in as soon as two years as the e-commerce group encourages more Chinese to borrow and lend. Alibaba in April started Zhao Cai Bao, a platform that lets small businesses and individuals borrow from investors directly, and has created a 14 billion yuan marketplace, Yuan Leiming, a general manager at Alibaba’s financial arm, said today. The platform allows a borrower to tap a maximum of 200 investors after a financial institution has guaranteed the loan and made sure the money will be paid back. Zhejiang Ant Small & Micro Financial Services Group Co.’s push comes as Alibaba completed a record $25 billion initial public offering in New York this month. “There was a strong demand for investment products that provide higher returns,” Yuan, who is also the chief executive officer of Zhao Cai Bao, said at the Hong Kong Institute of Bankers conference. “Think of us as an exchange for loans.” The finance arm, which is controlled by billionaire Jack Ma, already owns a small-business lending unit, a money-market fund known as Yu’E Bao, a Paypal-like service Alipay, and is close to submitting an application for a banking license. Alibaba in June 2013 created Yu’E Bao and attracted 574 billion yuan of funds by the end of June this year.
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Investment Returns Zhao Cai Bao has listed about 11,000 products. The annualized return on a loan for a period of six to 12 months is at least 5.5 percent, according to the company’s website. The online platform is working with more than 40 financial institutions to help guarantee the credit, including Ping An Bank Co. and Zhongan Online Property and Casualty Insurance Co., in which Alibaba’s finance arm owns a stake, said Yuan. “I don’t think individual investors have the ability to evaluate the risks in the financial products, so it’s up to the financial institutions to screen the risks,” said Yuan. The average loan size has been about 70,000 yuan, said Yuan. There is no cap on how much an individual can invest. The minimum threshold usually depends on the loan size divided by the maximum 200 investor quota. Zhao Cai Bao plans to attract 1 million people and small businesses to issue loans on the platform by the end of this year, said Yuan. Alibaba has indicated that the financial arm could conduct its own public offering in the future, and the implied equity value would be at least $25 billion, according to a filing with the U.S. Securities and Exchange Commission. The e-commerce operator’s relationship with its financial business has been a point of contention since Ma transferred Alipay to a company controlled by the billionaire.
Alibaba overtakes Amazon as most highly valued U.S. online retailer September 19, 2014 | Fierce Retail http://www.fierceretail.com/story/alibaba-overtakes-amazon-most-highly-valued-us-onlineretailer/2014-09-19 Amazon now has a global rival for both consumer and investor dollars: Alibaba. The company went public in the U.S. market yesterday at a record $68 a share. Alibaba's valuation is now at $167.6 billion, above Amazon's $150.2 billion. It seems the once dominant e-commerce player may have to watch its back.
Consumer packaged goods lacking in digital sales September 18, 2014 | Fierce Retail http://www.fierceretail.com/story/consumer-packaged-goods-lacking-digital-sales/2014-09-18 Consumer packaged goods brands are lagging behind several other categories when it comes to ecommerce sales—well behind the pacing of consumer electronics and fashion and apparel. Online sales of food and beverages will only account for about 2.3 percent of the online market in 2014, while health and personal care brands will account for about 8 percent. In total, online sales of consumer packaged goods are only about 1 percent of the $666 billion market. It seems CPG brands are not putting a large enough focus on digital.
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Strategic Initiatives EBay, PayPal to split up September 30, 2014 | Fierce Retail http://www.fierceretail.com/story/ebay-paypal-split/2014-09-30 EBay (NASDAQ:EBAY) plans to spin off its PayPal unit into a separate publicly traded company in the second half of 2015. Activist hedge fund magnate Carl Icahn demanded the divesture around nine months ago, but the idea was originally rejected by eBay's board and president, CEO John Donahoe. "For more than a decade, eBay and PayPal have mutually benefited from being part of one company, creating substantial shareholder value," Donahoe said in a company statement. "However, a thorough strategic review with our board shows that keeping eBay and PayPal together beyond 2015 clearly becomes less advantageous to each business strategically and competitively. The industry landscape is changing, and each business faces different competitive opportunities and challenges." Devin Wenig, currently president of eBay Marketplaces, will become CEO of the new eBay company, leading the eBay Marketplaces and eBay Enterprise businesses. Revenue over the last twelve months for these two businesses grew approximately 10 percent year-over-year to $9.9 billion, with eBay Marketplaces accounting for about $8.7 billion. In addition, eBay hired Dan Schulman, who was president of American Express's Enterprise Growth Group, as PayPal's new CEO-designee, after the separation is complete. The subsequent separate companies of eBay and PayPal will be "sharper and stronger, and more focused and competitive as leading, standalone companies in their respective markets," according to Donahoe. "As independent companies, eBay and PayPal will enjoy added flexibility to pursue new market and partnership opportunities. And we are confident following a thorough assessment of the relationships between eBay and PayPal that operating agreements can maintain synergies going forward. Our board and management team believe that putting eBay and PayPal on independent paths in 2015 is best for each business and will create additional value for our shareholders." Donahoe–and eBay's board–have come a long way since they disagreed with Icahn, who said spinning off PayPal would highlight PayPal's strengths while letting eBay focus on its core businesses. Plus, Icahn argued, creating a separate board for PayPal could help remove conflicts of interest with eBay. At the time, Donahoe rejected Icahn's demands. "We and our board believe the best way to drive long-term shareholder value is to keep eBay and PayPal together, to capitalize on the opportunities," he said on an analyst call in January. "And the distraction and dis-synergies of separation would be happening exactly at the wrong time. We're in this window of opportunity of commerce."
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AmazonFresh prepares to take on US east coast September 29, 2014 | Retail Analysis http://retailanalysis.igd.com/Hub.aspx?id=23&tid=3&nid=13043 Amazon is reportedly set to begin AmazonFresh grocery deliveries in New York, its first move to the US east coast. According to insiders the company could be set to roll out the service as early as next month, where it will compete with existing online retailers including FreshDirect, Peapod and delivery service Instacart. New Jersey distribution centre Amazon has been preparing inventory in a warehouse in Avenel, New Jersey, a location around 20 to 25 miles from Manhattan. From there it is thought that the company could also target customers in New Jersey and Philadelphia over time, according to Re\code. Model optimisation Amazon has been slower than initially anticipated to roll out its AmazonFresh grocery service and seems to be pursuing organic expansion as it works to optimise its model. The company recently partnered with the US Postal Service to help deliver small grocery orders as part of a pilot in San Francisco. Investment in innovation Meanwhile Amazon is reportedly set to increase staffing at its Lab126 development division by at least 27% over the next five years, according to Reuters. The Silicon Valley facility is where Amazon develops new hardware such as its Kindle e-reader and Fire smartphone. Amazon will invest USD55 million to develop operations. According to insiders the new focus will be on wearable devices and simpler ways to add FMCG products to shopping lists by pressing a single button. In a statement Amazon said that Lab126 was growing “very quickly�.
USPS to expand food delivery service to other retailers September 26, 2014 | Fierce Retail http://www.fierceretail.com/story/ups-wants-expand-food-delivery-service-other-retailers/201409-26 The U.S. Postal Service announced that it wants to expand its grocery delivery services for Amazon (NASDAQ:AMZN) and possibly other retailers. The agency is seeking approval to test the plan beginning Oct. 24 in multiple metropolitan areas, reported the Wall Street Journal. USPS has already begun a 60-day trial with Amazon, due to end in mid-October. The agency delivers groceries for Amazon customers early in the morning, before the USPS trucks are being used for mail. USPS has been partnering with Amazon since November 2013, when the agency began delivering packages on Sundays for the e-commerce giant.
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A filing with the Postal Regulatory Commission said the expanded test could bring in more than $10 million in revenue a year. The filing also said it was hoping for an expansion across metropolitan U.S. areas. The project is an aggressive move by the USPS to compete in the package delivery market. The Postal Service said it wants to offer delivery during other hours and for more food retailers. The move may also help Amazon speed up the expansion of its AmazonFresh service, which is currently available in San Francisco, Los Angeles, San Diego and Seattle.
A watersports gear manufacturer makes a bigger splash online September 23, 2014 | Internet Retailer http://www.internetretailer.com/2014/09/23/watersports-gear-manufacturer-makes-biggersplash-online Slingshot Sports shoots for faster and wider growth on a new e-commerce platform. Founded in 1999 by brothers Jeff and Tony Logosz, watersports gear manufacturer Slingshot Sports was one of the pioneering companies that helped propel the extreme sport of kiteboarding—where daredevils speed, twirl and soar over water on their boards. Now Slingshot is ready to shoot its business-to-business e-commerce operations into new heights of performance as well. The company, based in Hood River, OR, built a loyal following as one of only a few companies selling U.S.-made kiteboards and related equipment. It has since expanded its product offerings to include gear for two more water sports: wakeboarding and stand-up paddleboarding, which has recently seen a surge in popularity. Slingshot launched its first e-commerce site in 2009 and used it for three years, until it re-designed the site in 2012 using another e-commerce technology platform through early 2014. That replatforming helped to spur growth, at least for a while, as Slingshot doubled its revenue as it expanded its business to more than 50 countries. But with its larger, more complex business, Slingshot realized it needed more capable e-commerce software to go with it. It decided earlier this year to return to its prior e-commerce technology provider, NetSuite Inc., and deployed NetSuite’s SuiteCommerce e-commerce software to launch a new B2B e-commerce site in April. Slingshot also uses NetSuite’s Internet- or cloud-based enterprise resource planning software to manage its back-end business operations, including financial and inventory management. The tight integration between that back-end software with the NetSuite customer-facing e-commerce makes it easier than under Slingshot’s old technology to show updated inventory availability to its e-commerce customers, the manufacturer says. Using the new e-commerce technology platform will allow the company to grow its online B2B business quickly, says Greg Kish, North American sales and marketing director at Slingshot Sports. “The biggest benefit of NetSuite is scalability and how we can grow so quickly with it,” he says. "NetSuite gives us one system as a single source of the truth, and it can be easily customized to our needs.”
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Slingshot sells its products through more than 450 clients worldwide. That includes 330 dealers in the United States, mostly small “mom-and-pop” shops, Kish says, and about a dozen larger stores, including boat dealerships that sell Slingshot’s wakeboarding products. By this winter, the company expects about 25% of its orders to be placed using the new B2B platform—and by next summer, it expects 50% to 75% of orders to come through the e-commerce site. One of the most appealing aspects of the NetSuite B2B platform, Kish says, are the features it offers Slingshot’s dealers, including letting them track their orders and other information in real time. “We all shop on the Internet,” Kish says. “We just expect the ability to track everything, and know our clients expect the same thing.” The ease of use comes from a new user interface that provides a consumer-style shopping experience and allows Slingshot dealers to track real-time inventory, product warranties and customer service claims in a matter of minutes, a process that would have taken several phone calls and follow-ups in the past, Kish says. The new system will also take any risk out of the ordering process for dealers, especially over weekends, says Slingshot Sports’ operations manager Nick Stuart. Under Slingshot’s former system, dealers might be hesitant to place an order over a weekend, often the height of their sales week, because of the inability to communicate with a sales representative and check inventory. Slingshot understood the need for real-time inventory four years ago, when it began publishing daily updates of inventory records using the Internet-based Dropbox file-storing service, Stuart says. He started using the free service around 2010 to share the availability of each product with the company’s dealers early every morning. “It was immediately very popular,” says Stuart. “It demonstrated the need for a B2B e-commerce site with tracking capability.” Now, with the new e-commerce site’s built-in inventory tracking, “the trick is for us to educate our dealers” to use it, Kish says. Another benefit of the new SuiteCommerce technology for Slingshot Sports, Kish adds, is the ability to replicate the platform for multiple subsidiaries. Earlier this month, at board sports tradeshow Surf Expo, the manufacturer announced its new skateboard subsidiary, Moonshine Manufacturing, which will begin shipping longboard skateboards this fall for orders received on a new e-commerce site. Stuart says launching another B2B operation using the NetSuite platform took a minimal investment. “We were able to launch Moonshine Manufacturing’s B2B site relatively cheaply within just 2 months,” he says. Slingshot says it plans to replicate the same template again for any future subsidiaries, should opportunities arise. Slingshot also uses NetSuite’s customer relationship management software to help improve the productivity of its sales representatives, who can access customer buying preferences and other records via a web browser. Slingshot uses NetSuite OneWorld financial management software to help oversee its Moonshine MFG brand manufacturing subsidiary, producing a new line of long skateboards that will debut this fall. The company also uses budgeting and forecasting software from NetSuite partner Adaptive Insights for strategic planning. The cost to companies to deploy NetSuite SuiteCommerce software starts at $1,600 per month and is adjusted upward based on the type of installation and the number of users, the company says.
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B2B e-commerce could use more analytical and technology pros September 22, 2014 | Internet Retailer http://www.internetretailer.com/2014/09/22/b2b-e-commerce-could-use-more-analytical-andtechnology-pros A Forrester report points out challenges faced by some business-to-business firms working online. Business-to-business e-commerce operators and the service providers that help them manage online sales often struggle to find business analytics, technology and customer experience professionals, according to a Forrester Research Inc. report. The finding is based on more than 100 survey responses collected online in April and May from commerce service providers and interviews with such commerce service providers as hybris Software, Razorfish and Elastic Path Software. Forrester describes commerce service providers as vendors involved in some aspect of designing and building e-commerce sites, and integrating them with back-end business software for managing pricing, sales records, inventory stocks and other operations. The Forrester report, “Commerce Service Providers Market Overview: Changing Marketing Dynamics Drive New Strategies and Alignments,” says the e-commerce service providers “tasked with executing on digital strategies for both [business-to-consumer] and B2B companies are finding that the lack of e-commerce talent is a significant barrier to growing e-business organizations and strategies for their client companies.” That said, what Forrester calls “ready access to public cloud platforms through Amazon Web Services” and other providers of web-hosted services and technologies “has made it possible for companies to avail themselves of sophisticated e-commerce software without having to build, host or manage it.” That move toward the cloud also means the commerce service firms operating those offerings now perform such newer roles as “automated site testing, offering performance management services and conducting extensive security testing.” Those service providers also face a new challenge as more brand manufacturers sell directly to consumers via the web and learn to manage that channel. Service providers “in their capacity of trusted advisors [have been forced] to develop expertise in both channel optimization and business growth strategy.” That has led service providers to deepen their knowledge about such areas as product pricing and inventory management, Forrester says. The report was written by lead author Andy Hoar, a Forrester analyst who focuses on B2B ecommerce strategies, with contributions from several other Forrester analysts.
Amazon launches first airport lockers September 19, 2014 | Internet Retailing http://internetretailing.net/2014/09/amazon-launches-first-airport-lockers-in-birmingham/ From next week, passengers using Birmingham Airport will be able to collect their Amazon [IRDX RAMZ] orders as they pass through.
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The nine million people who use the airport will be able to pick up their goods in the south check-in hall, close to arrivals, 24 hours a day from September 22. The launch marks the first time that Amazon Lockers have been installed at an airport, and comes as the retailer’s number of locker location nears 300. “Amazon Lockers at travel terminals are amongst the most popular so it made perfect sense to us that the next step would be to install them at a leading UK airport,” said Christopher North, managing director of Amazon.co.uk. “Amazon Lockers are the delivery option of choice for many customers who want to pick up their shopping at a time and place that suits them best and we are delighted that customers flying in and out of Birmingham will now be able to pick up the products that are flying off our shelves whilst at the airport.” Birmingham Airport’s head of commercial, Richard Gill, said: “The arrival of Amazon Lockers at Birmingham Airport is great news for people passing through the airport, who can now pick up their items purchased online, whilst on the move, thanks to this new facility inside the terminal. We’re sure these lockers will prove to be tremendously popular and strengthens our commitment to providing excellent customer facilities.” News of the launch comes in the week that Amazon said it would open a new corporate office at Principal Plaza, Shoreditch, in 2017, with capacity for 5,000 London employees. Currently, it employs about 1,700 in its UK offices, predominantly in Slough, and says all corporate employees will move to three London offices by next summer. “We have already invested well over £1 billion and created more than 7,000 permanent jobs across the UK,” said North. “To support our continued growth in the UK, we have secured this exceptional building giving us the capacity to hire thousands of new employees in London in the coming years, in addition to the thousands of permanent roles we will create across our UK fulfilment and customer service centres.” The Mayor of London, Boris Johnson, said: “Our city is the perfect home for top tech talent and I am very pleased that Amazon have confirmed their intention to create thousands of new jobs at a major new base in east London. We are proving time and again that we have the right places and people to support this vibrant sector.”
Alibaba in talks with Snapdeal to enter India: Economic Times September 18, 2014 | China Daily http://www.chinadaily.com.cn/business/tech/2014-09/18/content_18621231.htm Chinese e-commerce giant Alibaba is in talks with online retailer Snapdeal to enter India, the Economic Times reported on Thursday, citing two people aware of the development. Alibaba, whose shares are set to debut on the US market on Friday in what could be the world's largest ever initial public offering, has discussed with Snapdeal a possible investment in the Indian company, but a decision has not been reached yet, the daily reported.
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Snapdeal, in which Ratan Tata, the former chairman of India's salt-to-steel Tata conglomerate, holds a stake, is also attracting attention from Japan's largest e-commerce company Rakuten Inc and telecommunications firm SoftBank Corp, the report said, citing investment banking sources. Snapdeal spokeswoman said the company does not comment on speculation, while Alibaba was not available for immediate comment when reached by Reuters. Alibaba increased the price range on its initial public offering to $66 to $68 on Monday, reflecting strong demand from investors for the year's most anticipated debut.
Hudson’s Bay pins its $10 billion future on digital September 17, 2014 | Internet Retailer http://www.internetretailer.com/2014/09/17/hudsons-bay-pins-its-10-billion-future-digital The department store chain says e-commerce will play a large role in its future, as it aims to reach $10 billion in total sales by 2018. Department store giant Hudson’s Bay Co. is projecting $10 billion in total sales in the next four years, and its path is pretty clear: a continued focus on e-commerce. That makes sense, as the multichannel retailer, which operates the Lord & Taylor and Saks Fifth Avenue brands in the U.S., and Hudson’s Bay in Canada, says its digital properties will grow three times as fast as stores over the next five years. Additionally, more than 70% of its transactions are influenced by a digital experience, and customers who shop online and in stores tend to spend three or four times as much as shoppers who frequent only one channel, Hudson’s Bay executives said yesterday at a consumer conference. To reach its goal, Hudson’s Bay, ranked No. 130 in the Internet Retailer 2014 Top 500 Guide, says it plans to increase its focus on online marketing and personalization, in addition to working to unite its user experiences for consumers shopping in multiple channels. Hudson’s Bay has already made major strides in advancing its multichannel and e-commerce efforts. In July, the merchant announced a deal with Swirl to install beacon technology in 130 stores that will send location-aware messages to in-store customers’ smartphones. The move represents one of the largest retail beacon rollouts yet. In February, the merchant tapped e-commerce veteran Michael Burgess to head up a newly formed HBC Digital division of the company. The new group now oversees digital strategy across all sales channels, including web, store and mobile. Burgess is a former president of Saks Direct, the online and catalog division of designer apparel retail chain Saks Fifth Avenue, which Hudson’s Bay acquired last year. The merchant also announced plans this week to expand its web and store presence in Canada. Hudson’s Bay will launch Canadian e-commerce properties for its luxury department store Saks Fifth Avenue and its discount brand Saks Off 5th at an undisclosed time in the near future. It will also open seven Saks Fifth Avenue stores in Canada, beginning with Toronto in 2016, and 25 Off 5th stores in various Canadian markets.
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Additionally this week, Hudson’s Bay reported strong second quarter results, especially from its online properties. For the period ended August 2, 2014, Hudson’s Bay reported: •
$162 million in e-commerce sales. That includes $116 million from the Saks Fifth Avenue brand, which it acquired in November 2013, and 80% year-over-year growth at its Lord & Taylor and Hudson’s Bay web properties. The merchant did not disclose a total comparable web sales figure for last year.
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Total sales were $1.77 billion, an 86.3% increase from $950 million for the prior year.
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Net loss of $36 million versus a net loss of $81 million in the same period last year.
The dramatic increases in sales and profits are mostly attributed to the acquisition of Saks Fifth Avenue, the merchant says. The web represented 9.2% of total sales during the quarter. “HBC’s quarter was characterized by strong performance from the higher end of our businesses, demonstrating the sustained strength of affluent consumers, and softer performance from our more moderate businesses,” says CEO Richard Baker. “Off 5TH, buoyed by its new digital business, experienced outsized same-store sales growth for the quarter. We continued to invest in HBC Digital, where we witnessed tremendous sales growth.” For the first six months of the year, Hudson’s Bay also reported: •
$3.62 billion in total sales, a 97.8% increase from the first six months of last year, again attributed to the Saks acquisition.
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Net income of $140 million compared with a net loss of $163 million in the same period last year.
Amazon reveals plans to spend whopping $1.1 billion on Ohio data center September 15, 2014 |Geekwire http://www.geekwire.com/2014/amazon-reveals-plans-spend-whopping-1-1-billion-ohio-datacenter/ Seattle-based Amazon.com is considering a big expansion in the Buckeye State, revealing plans to spend us much as $1.1 billion on a new data center in Dublin, Ohio — just outside of Columbus. Reports in The Columbus Dispatch and The Seattle Times in the past few weeks detail plans to build the facility on 68 acres at Dublin’s West Innovation District, with the City Council set to vote on the proposal on Sept. 22nd. The facility would employ 120 people, with government incentives, including free land, totaling some $81 million, according to the Dispatch. Other sites also are in play for the data center, but Ohio officials are confident that they can land the online retailer. The Columbus area also is seeing the benefits of another Seattle online retailer. Zulily is growing fast in nearby Lockbourne, with a massive fulfillment center that employs hundreds of workers. Zulily executives hosted an analyst day from the facility last week, and appear bullish on Ohio as an area of growth for the company.
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Data centers typically don’t employ that many people, so the economic benefits of securing Amazon’s new data center are uncertain. The company is operating under a subsidiary known as Vadata in its efforts to secure the location in Ohio, with the state telling the Dispatch last month that the proposed project includes new data centers “to provide cloud computing services.” Amazon Web Services is growing quickly, and the company will need additional cloud computing horsepower as it brings more digital services to the forefront. It currently operates data centers in Oregon, Northern Virginia, and Northern California, with large customers such as Airbnb, Flipboard, Netflix and others utilizing AWS. In addition to helping other businesses host applications in the cloud, the company is expanding its own cloud-based offerings, whether streaming music and video services or the video game streaming service Twitch, which Amazon.com just acquired for $970 million in cash.
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Other Key Developments Delivery companies in E-commerce space face hidden tax heat October 01, 2014 | Economics Times http://articles.economictimes.indiatimes.com/2014-10-01/news/54516726_1_tax-official-taxauthorities-tax-heat BANGALORE: Logistics service providers who have been slapped with demands for additional tax by authorities in several Indian states are among a growing number of players in India's booming online retail sector to be tripped up by arcane tax laws framed originally for retail sales in physical stores. Even as Amazon, which offers an online platform linking sellers and consumers in India, grapples with demands from tax authorities in Karnataka, several firms which provide logistics services to online retailers have fallen afoul of tax structures in states such as Maharashtra, West Bengal and Kerala.
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