Inside Amazon’s plan for Alexa to run your entire life

The creator of the famous voice assistant dreams of a world where Alexa is everywhere, anticipating your every need.

Speaking with MIT Technology Review, Rohit Prasad, Alexa’s head scientist, revealed further details about where Alexa is headed next. The crux of the plan is for the voice assistant to move from passive to proactive interactions. Rather than wait for and respond to requests, Alexa will anticipate what the user might want. The idea is to turn Alexa into an omnipresent companion that actively shapes and orchestrates your life. This will require Alexa to get to know you better than ever before.

In June at the re:Mars conference, he demoed [view from 53:54] a feature called Alexa Conversations, showing how it might be used to help you plan a night out. Instead of manually initiating a new request for every part of the evening, you would need only to begin the conversation—for example, by asking to book movie tickets. Alexa would then follow up to ask whether you also wanted to make a restaurant reservation or call an Uber.

A more intelligent Alexa

Here’s how Alexa’s software updates will come together to execute the night-out planning scenario. In order to follow up on a movie ticket request with prompts for dinner and an Uber, a neural network learns—through billions of user interactions a week—to recognize which skills are commonly used with one another. This is how intelligent prediction comes into play. When enough users book a dinner after a movie, Alexa will package the skills together and recommend them in conjunction.

But reasoning is required to know what time to book the Uber. Taking into account your and the theater’s location, the start time of your movie, and the expected traffic, Alexa figures out when the car should pick you up to get you there on time.

Prasad imagines many other scenarios that might require more complex reasoning. You could imagine a skill, for example, that would allow you to ask your Echo Buds where the tomatoes are while you’re standing in Whole Foods. The Buds will need to register that you’re in the Whole Foods, access a map of its floor plan, and then tell you the tomatoes are in aisle seven.

In another scenario, you might ask Alexa through your communal home Echo to send you a notification if your flight is delayed. When it’s time to do so, perhaps you are already driving. Alexa needs to realize (by identifying your voice in your initial request) that you, not a roommate or family member, need the notification—and, based on the last Echo-enabled device you interacted with, that you are now in your car. Therefore, the notification should go to your car rather than your home.

This level of prediction and reasoning will also need to account for video data as more and more Alexa-compatible products include cameras. Let’s say you’re not home, Prasad muses, and a Girl Scout knocks on your door selling cookies. The Alexa on your Amazon Ring, a camera-equipped doorbell, should register (through video and audio input) who is at your door and why, know that you are not home, send you a note on a nearby Alexa device asking how many cookies you want, and order them on your behalf.

To make this possible, Prasad’s team is now testing a new software architecture for processing user commands. It involves filtering audio and visual information through many more layers. First Alexa needs to register which skill the user is trying to access among the roughly 100,000 available. Next it will have to understand the command in the context of who the user is, what device that person is using, and where. Finally it will need to refine the response on the basis of the user’s previously expressed preferences.

Why It’s Hot:  “This is what I believe the next few years will be about: reasoning and making it more personal, with more context,” says Prasad. “It’s like bringing everything together to make these massive decisions.”

A Re-imagined Post Office in Finland

On November 1st, Finnish state-owned postal service provider Posti opened a new facility called Box in Helsinki featuring giant package lockers and a fitting room for online shoppers. The location will also serve as a physical store for online retailers and a testing space for Posti’s new digital services.

Posti conducted a study showing that almost a fifth of Finns expect to be doing most, if not all, of their shopping online by 2025. So they want to make it easier for customers to have their order delivered to Box and pick it up when they’re on the go, and be able to finish their experience in-store.

For example, if a customer has ordered clothes online, they can try on the clothes at Box. If they fit, they can take their package home, but if not, they can return the package right away. Posti will also allow customers to open packages and leave the packing materials behind to be recycled. While customers are there, they can take care of other postal activities or shop pop-up displays from various online retailers that will be featured.

In addition, Box has been designed to be carbon neutral. The convenient location in the city-center is easily reachable by public transportation and along many of their customers’ everyday routes.

Why It’s Hot

Returns are often the biggest pain point in e-commerce. This model has turned an annoying task into a pleasant experience.

Click-to-Buy Experiences take on a new (analog) life

‘Contextual shopping’: Publishers are using model homes for retail experiences

Home-related publications like Real Simple, Hunker and Domino are using model houses to create experiential retail experiences that can drive affiliate revenue.

Domino magazine has created staged homes for years. But this year’s house, located in Sag Harbor, NY was the first to include shoppable technology into the space. In partnership with Stage&Shop, a real estate agency and an app developer, Domino created an app that integrate codes into all of the house’s furniture and design elements that people touring the home could scan to purchase them.

Domino’s winter issue will have a feature on the home, which will also include QR codes for those products that readers use their smartphone to scan.

Brands were included in the home through product placement, and affiliate links were used in the shoppable content as well as in the house itself. But the primary revenue driver for the project still comes from the content created surrounding the home, including its print spread and digital elements. And while it’s an ongoing franchise for the brand, Cho said that Domino isn’t leaning on that revenue, but is looking for constant iterations of how to make the project better and a bigger piece of the puzzle.

 

Why It’s Hot:  An interesting convergence of digital and physical, potentially symbiotically solving parallel/complementary problems of retail and ecommerce experiences:

  • Online purchase is convenient, but I don’t get to see, touch, try physical goods before buying.
  • Retail purchase is experiential, but I don’t want all of the friction of purchase and transport home.

You can still be a Toys ‘R’ Us Kid

Toys ‘R’ Us back… sort-of…

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Tru Kids, the owner of the Toys ‘R’ Us brand is “bringing back the Toys ‘R’ Us brand in a modern way through a strong experiential and content-rich omnichannel concept,” Richard Barry, CEO of Tru Kids, said in a statement.

Learning from its prior mistakes of not embracing technology and a digital transformation, this relaunch is purely digital and content-focused in nature, partnering with Target and Candytopia to help with ecommerce and real-life, memorable experiences.

Dubbed “The Toys R Us Adventure,” the company partnered with Candytopia to create the experiential pop-ups in Chicago and Atlanta and feature more than a dozen interactive play rooms, larger-than-life toys, and installations featuring Geoffrey, the brand’s giraffe mascot.

Why it’s hot: Toys ‘R’ Us’ was the poster child for death by tech, with its rejection of ecommerce and digital transformation. Now the company is trying to show everyone it can learn from its mistakes. The question is, will the nostalgia of Toys ‘R’ Us be enough to drive expensive experiential store visits. It’ll be interesting to see if this attempt at jumping into the digital deep end will have a happy ending. If it does work, will we start seeing the return of other brands who failed to innovate? Blockbuster Video? Tower Records?

Sources: FastCo, Business Insider, ToysRUs.com, Forbes

 

Bringing online habits to offline shopping

Price Kaki app by CASE

Price Kaki is an app that crowdsources and compiles the prices of daily goods sold across multiple physical retail stores in Singapore. The app enables price comparison of groceries, household items and hawker food, across outlets, thus helping shoppers make informed decisions and get value for their money. Users are invited to contribute real-time updates on prices and promotions, with the most active rewarded with e-vouchers. Developed by Consumers Association of Singapore (CASE), the app is inspired by e-commerce price aggregators, and aims to bring the same level of transparency and consumer empowerment to offline shopping.

Fun fact: ‘kaki’ is local Singaporean lingo for ‘buddies’ .

Why it’s hot:  E-commerce is outgrowing physical retail, yet offline still dominates. As a result, businesses pursuing further growth are focusing on revolutionizing brick-and-mortar, by integrating the best aspects (like price transparency) of online retail.

Sources: Trendwatching and Channel News Asia

IKEA and National Geographic take on “Bedroom Habits”

National Geographic and IKEA® come together to capture and document the human species in one of the most challenging habitats the world has ever seen — the bedroom. 
Ikea isn’t just about meatballs and couches. With its latest campaign, the Swedish retailer wants to be known as sleep experts, so it partnered with National Geographic on a series of films called ‘Bedroom Habitats.’

The faux-nature series looks to capture and document the human species in one of the most challenging habitats — the bedroom. The films cover everything from a comically small mattress to the unrelenting threat of clutter.

 Created by National Geographic with Wavemaker, the four videos in the series will highlight different consumers with varying sleep challenges. The first, ‘Small Bed Battle,’ shows a couple fighting for space in their tiny bed as a narrator gives a documentary style blow-by-blow of the epic struggle. A positive outcome surfaces after the couple goes to Ikea and gets a reasonably-sized bed.

The series will be hosted on a dedicated National Geographic Bedroom Habitats microsite, along with sleep challenges and shoppable solutions, and on National Geographic Instagram stories and its Facebook page. The series will also be supported with paid social and display units.

A complimentary campaign titled ‘Save Our Sleep,’ features the same nature documentary style, highlighting the issue that one-in-three Americans doesn’t get enough sleep, with Ikea offered up as the sleep hero.

Produced by Ogilvy, the ‘Planet Sleep’ television spot showcases how a comfortable bedroom sanctuary can help save endangered sleep through the implementation of simple and affordable sleep solutions, like new lower priced mattresses and ergonomic pillows. It starts by showing tired people in stressed out urban lifestyles. They only become happy as they realize that Ikea is the solution to their sleep problems.

“Trends show that a good night’s sleep might very well be going extinct. Globally, the average number of hours slept has fallen significantly in the past 50 years from eight hours to just a little over six,” said Joy Kelly, US media manager at Ikea. “Having conducted years of extensive research into how people live (and sleep) at home – and implementing those learnings to create a better everyday life – we know Ikea has the complete quality bedroom solutions that can help everyone achieve a good night’s sleep, so we wanted to be sure to showcase that.”

These quirky films mark the start of a larger, year-long campaign by Ikea to combat decreasing sleep levels in today’s society, positioning the retailer as one that is creating hope for the future of sleep.

“With the year-long ‘Save Our Sleep’ campaign, we hope to inspire consumers with simple, affordable bedroom solutions that will go a long way towards a better night sleep,” added Kelly. “Sleep-deprived consumers can be rest assured that Ikea is committed to saving our sleep in 2019 and beyond.”

Zalando and PostNord to Pilot Private Delivery and Returns Points in Denmark

Image result for Zalando and PostNord

Recently, German ecommerce platform Zalando began a pilot scheme using private homes in Denmark as delivery points. The 50 homeowners involved offer pick-up and drop-off services from 4pm to 8pm, in return for a small remuneration each month. A collaboration with Swedish postal company Postnord, it is hoped that the three-month trial will provide opportunities for seniors, self-employed, and unemployed individuals who are often home during the day.

Why it’s hot: Making e-commerce more personal and convenient.

Source + Source

Retail wants a Minority Report for returns

In what now seems inevitable, an online fashion retailer in India owned by an e-commerce startup that’s backed by Walmart is doing research with Deep Neural Networks to predict which items a buyer will return before they buy the item.

With this knowledge, they’ll be better able to predict their returns costs, but more interestingly, they’ll be able to incentivize shoppers to NOT return as much, using both loss and gain offers related to items in one’s cart.

The nuts and bolts of it is: the AI will assign a score to you based on what it determines your risk of returning a specific item to be.This data could be from your returns history, as well as less obvious data points, such as your search/shopping patterns elsewhere online, your credit score, and predictions about your size and fit based on aggregated data on other people.

Then it will treat you differently based on that assessment. If you’re put in a high risk category, you may pay more for shipping, or you may be offered a discount in order to accept a no-returns policy tailored just for you. It’s like car insurance for those under 25, but on hyper-drive. If you fit a certain demo, you may start paying more for everything.

Preliminary tests have shown promise in reducing return rates.

So many questions:

Is this a good idea from a brand perspective? If this becomes a trend, will retailers with cheap capital that can afford high-returns volume smear this practice as a way to gain market share?

Will this drive more people to better protect their data and “hide” themselves online? We might be OK with being fed targeted ads based on our data, but what happens when your data footprint and demo makes that jacket you wanted cost more?

Will this encourage more people to shop at brick and mortar stores to sidestep retail’s big brother? Or will brick and mortar stores find a way to follow suit?

How much might this information flow back up the supply chain, to product design, even?

Why it’s hot

Returns are expensive for retailers. They’re also bad for the environment, as many returns are just sent to the landfill, not to mention the carbon emissions from sending it back.

So, many retailers are scrambling to find the balance between reducing friction in the buying process by offering easy returns, on the one hand, and reducing the amount of actual returns, on the other.

There’s been talk of Amazon using predictive models to ship you stuff without you ever “buying” it. You return what you don’t want and it eventually learns what you want to the point where you just receive a box of stuff at intervals, and money is extracted from your bank account. This also might reduce fossil fuels.

How precise can these predictive models get? And how might people be able to thwart them? Is there a non-dystopian way to reduce returns?

Source: ZDNet

Veloretti Bikes courting car owners in Paris

Paris is Europe’s most polluted capital city. To prevent people from dying of particulate pollution, 2.7 million high-emissions cars are restricted from entering the city on weekdays — with hefty fines for noncompliance. If you work in the city, but can’t afford a new low-emissions car, this is a huge problem. You need to get into Paris, and may in theory also want to curb your emissions, but that’s not your main concern — you need to get to work! So what can you do? You’ll ride the train even though it’s a serious downgrade from your car. You might consider a bike, but making the switch to commuting by bike would require more of a nudge because it entails a bigger change in your lifestyle.

Amsterdam-based Veloretti bikes saw this as an opportunity to give car owners the nudge they needed to make that lifestyle change. They rode the wave of interest in clean mobility and sustainable urban transport during European Mobility Week 2018 by offering personalized bike discounts to 5 million Parisian car owners based on their car’s emissions ratings. This positioned the brand as not only helping car-owners, but helping the city itself solve its pollution problems.

The brand plugged the public database of license plates into a Shopify script, converting plates into coupon codes, which users could enter on Veloretti’s site. This gave Veloretti emissions information on a prospective bike-buyer’s car, which was used to automatically calculate a personalized discount at the POS. The worse the emissions score of your car, the deeper discount you got for a new Veloretti bike.

Seeing your car’s negative environmental impact at a time when both pollution and awareness of the need for clean mobility is at its peak in your city was coupled with a commensurate discount on a more sustainable transportation option.

Why it’s hot:

1. License plate discount is only revealed after user has placed a bike into their online cart. Commitment to purchase is strengthened as user sees their emissions score and subsequent discount.

2. Positioning their brand as a solution to pressures from macro forces and social trends (climate change, pollution, fines for driving in Paris, Mobility Week) at the time when awareness of these pressures was at its peak.

3. Highlighting a pain point with a competing product and immediately flipping it into a tangible financial benefit for their product — at the POS.

Read more: Contagious I/O

Try On a New Lipstick… On YouTube

For those of us who go down YouTube Makeup tutorial rabbit holes, like myself. It’s easy to get discouraged that you don’t have the color to look for yourself… that’s half the point of watching the video.

Well, YouTube has a solve for that (and for makeup brands who want to sell product). Try on while you watch!

“The feature is currently in the very early stages of development — alpha testing — and is being offered to YouTube creators through Google’s  in-house branded content program, FameBit. Through this program, brands are connected with YouTube influencers who market their products through paid sponsorships.”

YouTube has already found that 30% of viewers chose to try the experience when it was available on the iOS app. And those who tried spent an average of more than 80s engaging with the tool.

YouTube’s new AR Beauty Try-On lets viewers virtually try on makeup while watching video reviews

Why it’s hot?

A mix of VR and ecom! This beauty try-on gets over a big makeup hurdle. However this is not totally new. This is something sephora has done on their website, but it’s a much harder UI, this new way with YouTube should score google some extra referral cash, and users entering buy pages would be much more primed.

Forget a Thousand Words. Pictures Could Be Worth Big Bucks for Amazon Fashion – Adweek

Amazon is rolling out StyleSnap, its AI-enabled shopping feature that helps you shop from a photograph or snapshot. Consumers upload images to the Amazon app and it considers factors like brand, price and reviews to recommend similar items.

Amazon has been able to leverage data from brands sold on its site to develop products that are good enough or close enough to the originals, usually at lower price points, and thereby gain an edge, but its still only a destination for basics like T-shirts and socks. With StyleSnap, Amazon is hoping to further crack the online retailing sector with this new offering.

Why It’s Hot

Snapping and sharing is already part of retail culture, and now Amazon is creating a simple and seamless way of adding the shop and purchase to this ubiquitous habit.  The combination of AI and user reviews in its algorithm could change the way we shop when recommendations aren’t only based on the look of an item, but also on how customers experience it.

 

Source: Forget a Thousand Words. Pictures Could Be Worth Big Bucks for Amazon Fashion – Adweek

Other sources: https://www.cnet.com/news/amazon-stylesnap-uses-ai-to-help-you-shop-for-clothes/

Marie Claire Ventures into E-commerce

Marie Claire magazine has launched Marie Claire Edit – a shopping experience curated by their fashion editors. The e-commerce platform features brands including NET-A-PORTER,  ASOS, Topshop, and many more.

The idea of the site is to give Marie Claire readers a place to shop where all the items are current, on-trend and paired with pro styling tips. Products are pulled together in themes like, “The major knits to wear right now,” “These Christmas jumpers prove you can be festive AND chic” and “The checked blazer upgrades you’ll need this season.” So the editorial voice of Marie Claire remains, but the collections are lighter on text, with shopping truly the main focus.

Marie Claire Edit also plans to work closely with designers. Their future vision includes housing exclusive interviews and major product launch news.

Why It’s Hot

As print magazines continue to look for new ways to stay relevant and profitable, Marie Claire is taking a big step in a new direction for publishers.

Source: https://www.retaildive.com/news/marie-claire-magazine-unveils-content-driven-e-commerce-site/542874/

The emerging era of eCommerce

Snapchat and Instagram, two popular social media platforms are entering the world of e-commerce. Both platforms point users in a shopping direction. Each of the apps increase their competition amongst each other as they battle to gain the most following. In today’s digital era, eCommerce is transforming the way we absorb information and online shop.

For Snapchat, eCommerce is utilized as Snapchat presents the “Shoppable Snap Ads”. In this specific ad, Snapchat promotes Spectacles camera sunglasses. Meanwhile, Instagram utilizes shopping in its feature of “Instagram Stories”. With this feature, retail stores can promote their merchandise one user at a time. Brands are slowly beginning to take over each Instagram user’s feed and what they see. Snapchat like its competitor, has a feature in which users can stay in the know about their favorite brands and see how they can take action.

Snapchat additionally utilizes eCommerce to promote Dunkin’ Donuts. As America runs on Dunkin (no pun intended), it allows for users to interact with the brand by playing a virtual reality game, designed as an ad. Snapchat additionally includes “carousel-style” shopping ads, where users can interact with different filters for their favorite brands and send to their friends.

Why it’s hot

eCommerce remains to be a hot topic in today’s ad world. eCommerce is a major influence to how agencies and brands engage with their clients and users. The social media platforms, like Instagram and Snapchat use eCommerce to their advantage. With fun and eye-catching ads, eCommerce helps increase brand awareness and grow meaningful relationships with clients. As a global customer relationship agency, MRM//McCann works to use eCommerce as a specific tool in which clients can successfully and effectively interact with their users.

Jetblack Could Change Walmart Shopper Stereotypes

Walmart’s tech incubator is out with its first experiment. The incubator, known as Store No. 8, just launched Jetblack, a concierge-style service for requesting stuff and getting it really quickly.

To shop with Jetblack, first you need an invite. Right now the service is limited to some customers in Manhattan and Brooklyn who are part of an eight-month pilot program restricted to buildings with a doorman, though that will soon expand and a waitlist is available now. The service is $50 a month — considerably less than some adjacent competitors, while considerably more than Amazon Prime — and promises same-day delivery.

Jetblack is focusing on “time-strapped urban parents” seeking “more efficient ways to shop for themselves and their families.” To request something, Jetblack members send a text message and will receive product recommendations sent back in text. Those recommendations are culled from Walmart and Jet.com but also from specialty retailers locally.

That means any product request is fair game and “sourcing a specific beauty cream from a member’s favorite local boutique, curating custom Easter baskets and delivering them once the kids are asleep and rushing beach essentials to a family on vacation” are all within the realm of Jetblack fulfillments.

“Consumers are looking for more efficient ways to shop for themselves and their families without having to compromise on product quality,” said Jetblack co-founder and CEO Jenny Fleiss, formerly of Rent the Runway.

“With Jetblack, we have created an entirely new concept that enables consumers to get exactly what they need through the convenience of text messaging and the freedom of a nearly unlimited product catalogue.”

Sources: eMarketer Retail  TechCrunch

Why It’s Hot

In retail and e-commerce, competition is hot around convenience. The pilot is interesting because (1) New Yorkers have opposed Walmart retail spaces in the past and (2) New Yorkers are already getting the best of same-day shipping/delivery in so many areas — so they expect it/are used to it — so they need it, but will they care about Walmart’s offering?

 

Shop for Leggings… While Hiking?

During SXSW, Outdoor Voices rolled out a new AR app, which encouraged festival-goers to break away from the craziness of the convention center and explore the hiking trails around Austin… and, use their app. The app is directed users to a park where they could then scan the ground and be rewarded with location-specific deals on apparel; the items were viewable in AR and users could see them in nature, explore them in detail, and even order using Apple Pay.

Why it’s hot: While some brands have started experimenting with AR games and scavenger hunts, Outdoor Voices takes an in interesting attempt to combine with commerce. Why it kind of defeats the purpose of ‘getting outdoors’ and ‘unplugging’, what better way to buy outdoor hiking clothes – while you’re doing that exact thing?

Source: PSFK

AR coming to eBay…


Details are a bit scant, but eBay announced this week it will soon be integrating AR functionality into its app.

Per Fortune, “The San Jose, California-based marketplace said it’s working on an AR kit that, for example, will let car enthusiasts see how the images of new wheels would look on their vehicles before making a purchase. Another feature will help sellers select the correct box size for an item by overlaying an image of the box on the merchandise.”

Why It’s Hot:

While not the newest kid on the block (eg, Ikea has used AR for years), eBay is a massive marketplace where millions of people globally buy and sell things. With physical retail integrating technology to fight back against the convenience of e-commerce, this is an example of e-commerce trying to bring elements of physical retail to the digital world. One of the big disadvantages of e-commerce is usually you’ll only see a bunch of images of a product, which in eBay’s case may or may not be of the actual product you’re buying. The ability to see what something looks like in a virtual 3 dimensions is a major new advantage.

Also to note this week – eBay hired former Twitter data scientist Jan Pedersen to lead its AI efforts.

[Source]

GM brings Dunkin’ Donuts, Starbucks Ordering to Cars

General Motors is launching a new in-vehicle app named Marketplace that will allow drivers to pay for goods such as gasoline or coffee and schedule service through their infotainment systems.

The automaker expects the free technology, which it is calling an industry first, to quickly expand from about a dozen offerings, such as ordering Dunkin’ Donuts or reserving a table at TGI Fridays, to other services such as Starbucks orders and dealership services, including oil changes.

“We are using it also to improve how our customers interact with the vehicle and the dealership network,” says Santiago Chamorro, GM vice president of global connected customer experience. He emphasized the connections are secure, and Marketplace is not meant to be an in-vehicle digital billboard.

In-vehicle marketplaces and app-based services have been discussed for years. Offerings such as Apple CarPlay and Android Auto mirror smartphone apps onto the vehicle’s infotainment screens but do not complete financial transactions.

Some services such as ordering Dunkin’ Donuts for pick up require drivers to have an account or profile with the store. Marketplace uses recent and favorite foods and settings from the profiles to customize the offerings for the driver. Deals and membership rewards are currently available from gas stations. Paying for gasoline is expected to be available early next year.

Dealership services such as scheduling oil changes or other maintenance are expected to be added as early as next year. Vehicles will have the capability to alert drivers of needed services and schedule them, if the driver would like.

Other current partners with Marketplace include Wingstop, Shell, ExxonMobil, Priceline.com, Parkopedia, Applebee’s, IHOP and Delivery.com. Starbucks is expected to be added in early 2018.

According to Consumer Reports, though, “The bad news is that in its current state, there’s not much reward for drivers to actually use it—though the automaker promises that will change soon as it adds more options and retail partners….Ultimately, instead of opening up an e-commerce gateway, GM Marketplace acts more like a middleman with limited options, at least in its current state.”

Source: AdAge

Why It’s Hot:
Automotive innovation is not only about self-driving technology, but about retail and the new consumer expectations brands need to meet. The opportunity for e-commerce to be at your fingertips even while driving may open up more geo-fenced, trackable marketing opportunities.

Nordstrom Announces Small-Format, Brand-Focused Stores

 

Faced with diminishing profits in their brick-and-mortar business (along with the entire retail industry), Nordstrom announced a new, forward-thinking venture: Nordstrom Local, tiny stores with no inventory. This may seem counterintuitive, given Nordstrom’s historical dominance in the large-scale department store category, but the experimental stores are drawing on several key elements of recent commerce (and, specifically, e-commerce) successes like Warby Parker and Bonobos.

First, the stores are pivoting to a fully e-commerce process for purchasing items. These tiny stores will be outfitted (no pun intended) with devices that will allow customers to place orders for anything in the Nordstrom universe, and the stores will act as access points for customers wishing to pick up online orders and return items.

Second, the stores are also focusing on the brand experience, not the available inventory, as the core value-add of the physical location. Nordstrom Local stores will offer premium services such as personal stylists, wine, and manicures as a way to reframe the in-store experience as one of luxury, pampering, catered attention, etc.

Why it’s hot: With the retail industry in free-fall, retailers desperately need to innovate in order to survive, and these small-scale stores just might be the trick. Nordstrom isn’t the only one to try this approach – Sephora recently launched a similar small-scale store in Boston – but they’re certainly one of the largest. If their Local stores succeed, it may prove a path forward for other struggling retailers.

Read more: Fast Company | Bloomberg

The flying supermarket

German airline Lufthansa has partnered with an online supermarket so passengers can shop for groceries on their flight home and avoid returning to an empty fridge.

Passengers on long-haul flights can use Lufthansa’s in-flight internet, FlyNet, to access Rewe’s online delivery service and shop for groceries. Passengers can then select a delivery date and the food will arrive at their home (provided the address is in Germany) in a cool box. They are also planning to trial this in the US next year

The trial began on 1 October and will run until 1 December. For the first six weeks of the trial, the service will be available on long-haul flights to Düsseldorf, Frankfurt and Munich. In the second six weeks, the service will be available on long-haul flights that have those three cities as the final destination.

Why it’s hot
From plane to home at just the right moment. Not only they deliver to your home but you can choose the exact time you want it to be delivered to your address.

The idea came from a customer survey where people said they want duty free products to b delivered home

Source: FutureTravelExperience.com

buy your next couch online…

Campaign may be to furniture what Casper is to mattresses. Finally you can get the previously mythical combination of quality furniture that is shippable using normal delivery methods, and that requires minimal assembly. It’s also billed as being “built for life”, with prices on par with Crate and Barrel, or West Elm, and ships for “free”.

Why It’s Hot:
Great products are designed around removing pain points from the customer experience. The long transit times (and coordinating final delivery) that can come with freight shipping (+the cost), and the overly frustrating and laborious assembly required with other furniture purchased digitally are two major headaches when buying furniture online. Campaign solves for both. Meanwhile, IKEA is still trying to figure out how to make a flat-packable couch.

Brandless is the new brand

This past week the internet was abuzz with news of CPG startup Brandless. Headed by serial entrepreneurs Tina Sharkey and Ido Leffler, Brandless is selling consumer staples like food and healthcare direct to consumers all priced at $3.

“It felt like modern consumption was really broken,” says cofounder and CEO Tina Sharkey. Millennial consumers don’t want to buy their parents’ brands, she argues, and all brands are too expensive, marked up to cover the costs of distribution, warehousing and retail space. By eliminating what she refers to as this “brand tax,” she figured that Brandless could slash the costs of basic packaged consumer goods that people buy regularly, and potentially become a significant player in a $2 trillion market dominated by the likes of P&G and General Mills.

But the biggest difference between Brandless and all the major CPG players is its business model: Rather than sell through traditional retail stores, the company is only offering its goods online. By doing so, the company will have what few of the CPG giants have – a direct relationship with the consumers of its products. It plans to exploit this relationship through a heavy investment in data and by building a sense of community through memberships and philanthropy (with every purchase, the company will donate to Feeding America).

https://techcrunch.com/2017/07/11/brandless/

https://www.forbes.com/sites/amyfeldman/2017/07/11/brandless-hopes-to-shake-up-consumer-products-with-direct-to-consumer-basics-for-3/#694a312e3906

Why It’s Hot

Move over Warby Parker, Casper and the rest. You’re not the only ones willing to take on the big boys.

And rather than relying on product brands, there’s just one brand in this game to promote – and it’s Brandless.

The Amazon “stock market”

Just beneath the placid surface of a typical product page on Amazon lies an unseen world, a system where third-party vendors can sell products alongside Amazon’s own goods. It’s like a stock market, complete with day traders, code-slinging quants, artificial intelligence algorithms and, yes, flash crashes.

Amazon

Sellers of commodity items on Amazon are constantly monitoring and updating their prices, sometimes hundreds of thousands of times a day across thousands of items, says Mr. Kaziuk nas. Most use “rules-based” pricing systems, which simply seek to match competitors’ prices or beat them by some small fraction. If those systems get into bidding wars, items offered by only a few sellers can suffer sudden price collapses — “flash crashes.”

It’s clear, after talking to sellers and the software companies that empower them, that the biggest of these vendors are growing into sophisticated retailers in their own right. The top few hundred use pricing algorithms to battle with one another for the coveted “Buy Box,” which designates the default seller of an item. It’s the Amazon equivalent of a No. 1 ranking on Google search, and a tremendous driver of sales.

http://news.morningstar.com/all/dow-jones/us-markets/20170326515/the-high-speed-trading-behind-your-amazon-purchase.aspx

Why It’s Hot

Getting under the hood of how retail monster Amazon operates is always fascinating. The idea that prices are updating hundreds of thousands of times a day is nuts.

Alexa, we have a problem

Google Home is about to offer a feature Amazon’s Alexa can’t match: finds from local stores.

Google Home

The new feature is powered by local inventory feeds sent by retailers that buy ads on Google. In the past year, local shopping queries have increased 45 percent and the search giant has doubled the number of retailers that send local inventory feeds.

With this new feature, Google is offering users something Amazon doesn’t — a way to find merchandise at your local store and try before you buy.

It’s all part of Google’s long-term strategy to develop products and services that use artificial intelligence to make it easier for people to interact with computers – that, in turn, will feed into Google’s ad-based business model.

https://www.cnbc.com/amp/2017/03/21/google-home-vs-amazon-echo-for-shopping.html

Why It’s Hot
-It continues the local digital trend that’s grown over the past couple of years
-It’s also another interesting bridge between eCommerce and advertising – with a healthy mix of IoT thrown in

Taobao villages: “E-commerce runs toward the road of happiness”

Daiji township is a dusty collection of villages in China’s central heartland plains. It was described in a recent article in a Chinese magazine as a place “synonymous with backwardness, the unwanted stepchild of Shandong province.”

But in 2016, Daiju sold 1.8 billion yuan ($26.2 million) worth of acting and dance costumes.

“Made in China” is nothing new. But the internet and e-Commerce specifically have exponentially increased the volume and reach of manufacturing, changing the face of the country. Half of Daiji’s 45,000 residents now produce or sell costumes—ranging from movie-villain attire to cute versions of snakes, alligators, and monkeys on Alibaba-owned Taobao.

And Daiji is not the only rural town in China dramatically changed by globalization. In November 2016, China’s State Council Office on Poverty Alleviation, along with 16 other ministries, released guidelines calling for a massive expansion of e-commerce in rural areas as part of the fight against poverty.

Taobao

Why It’s Hot
In the current political environment where countries like the U.S., the U.K. and France are looking for ways to preserve jobs of old, looking at countries that continually push to capitalize on globalization may help us to embrace change rather than hide from it.

Boxing Weekend

ebay tried to cure some holiday woes in the US this year by instituting a “Boxing Weekend,” playing on a long tradition of Boxing Day in a number of other countries.

The brand used a cultural moment of excess or unwanted gifts as an excuse to use ebay as well as their ebay Valet service.

The promotion let sellers use ebay Valet for free, and offered a number of drop-off points in Westfield malls across the country during the post-Christmas weekend.

This promotion does a number of things well, especially a contextual integration of physical and digital services with the drop-off stations in malls.  It’s also interesting to note Westfield’s willingness to play with the secondary market ebay creates in the context of their own spaces, where brands are already competing for attention and revenue.

Worth noting as well is that ebay partnered with The Onion Labs for the video promoting the Boxing Weekend extension of their #wishbigger campaign.  Fun stuff.

E-Commerce in Dashboards Offers Convenience But Privacy Risks

Most cars sold today lack the technology for drivers to pay for items they purchase (unless they use a smartphone). But by 2022, 82.5 million autos worldwide will be connected to the internet, more than triple the number now, according to researcher IHS Automotive. In the next two to five years, “buy buttons” connected to smartphone mobile wallets will start appearing on dashboards, according to Richard Crone, who runs payment adviser Crone Consulting. That means motorists will soon be able to buy a pizza, fill up the tank or preorder a half caf skinny macchiato from Starbucks without pulling out their phone.

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Banks and credit card companies are looking to pile in. Visa has developed an app for the dashboard or smartphone that enables the car to automatically purchase gasoline, parking and fast food.

But automakers this summer have proven easy targets for hackers as we mentioned in previous Hot Sauce posts here and here.

Why It’s Hot

This new technology will create more opportunities for brands to connect with their customers at the right moment (e.g. alter drivers of deals at Dunkin Donuts when they are driving near a location) while also providing overall convenience to consumers. Unfortunately there are also concerns that this will also create opportunities for hackers to steal credit card numbers, and other personal information that could lead to identify theft.

Source

Apple.com Gets a Redesign

According to Techcrunch, Apple.com removed the separate Store tab and integrated the shopping button with product information. They’ve also integrated more editorial-like features like the Accessories page.

Why It’s Hot: The industry opinion seems to be that the redesign was motivated by mobile experiences. Aesthetically, the site went through a small change, but it feels relatively huge for the retailer, not just in design, but in narrative. The initial website spoke to a focus on the product, and the redesign speaks to a shopping experience. It’s interesting that a big retailer like Apple is finally evolving to a more obvious mobile-friendly design, but it also feels like the end of a product-obsessed Steve Jobs era.

Instagram Up its Value to Marketers

Instagram is going to begin including function buttons in their paid ad posts. In the caption of the brand image, there will be a “buy now” button for online retailers, an “Install now” button for mobile apps and a “Sign up” button for membership apps. The buttons will open in an in-app browser to keep the user in Instagram at all times, making it a more seamless process.

These new interactive ads will incorporate Facebook data, which should allow more small businesses to begin advertising on Instagram, since they will be able to purchase smaller ad buys that target a narrower group of people.

In addition to CTA buttons, Instagram has also added enhanced paid advertising targeting capabilities that very closely mirror those of Facebook. These enhanced capabilities allow advertisers to target their ads based on user interests in addition to age, gender and location.

The buttons will roll out gradually, beginning with testing in Spain this week.

Hot_Sauce_6_4

Why It’s Hot

This seems like a natural progression for Instagram, as they have a large and engaged fan base as well as an immense amount of data through their own app and Facebook. For users, this means a more seamless experience. For advertisers it means the ablity to tackle the right users

Read more here.

Pinterest Wants You to Go Shopping

Pinterest introduced a new way for retailers to sell products on its service as the platform has finally debuted its long-awaited buy button.

Users can shop on the site by clicking on “pinned” products to see the price, choose a color, size, and quantity. Visitors can then click on a buy button to complete the transaction using a credit card or by paying with Apple Pay through their iPhones. The new “buyable pins,” introduced Tuesday at an event at Pinterest’s San Francisco office, are a big step by the company to become more of a shopping hub. Millions of people already use the site to check out products that others recommend.

Pinterest says U.S. iPhone and iPad users will start seeing the buy button in late June on millions of items from retailers such as Neiman Marcus, Kate Spade, Michael’s craft store, Nordstrom, Cole Hahn, and Macy’s. Shoppers pay no additional fees to buy items on Pinterest. Additionally, merchants pay no commission to sell. It’s unclear how Pinterest will make money from buyable pins. But it could be trying to gain traction with retailers before starting to charge them fees.

Read more here and here.

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Why it’s hot:

Driving ecommerce is the holy grail of social marketing. According to new research from Millward Brown, 93% of active Pinners said they use Pinterest to plan purchases and 87% said they’ve bought something because of Pinterest. The ability to shop directly from Pinterest is particularly powerful because of the rise of mobile devices. Around 80% of users access Pinterest through a mobile device, which, because of their small screen size, make it inconvenient to click through to another site to complete a transaction. Pinterest, which investors have valued at $10 billion, still needs to prove that it can bring in the kind of revenue that other social media companies like Facebook and Twitter have been able to generate. Only recently has it really started to focus on making money.

Snapchat & Shopping

Send erasing pictures to your friends, pay through us, read our curated content and now shop. Snapchat is looking to grow, grow and grow.

Most recently, Snapchat reportedly invested an undisclosed amount of money into  Spring, a clothing retail-like app. The app allows you to “follow” brands you like, provides inspirational recommendations based on your preferences and enables users to purchase within the app. Spring is already available for iOS and Andriod but is still in the process of raising more money.

Spring_Hot_sauce

Why It’s Hot

Social media platforms these days are literally trying to do it all. The fact that this Snapchat is now tapping into ecommerce could be just the beginning of many more endeavors for the startup.