Sunday, March 26, 2017

AUGMENTED REALITY / VIRTUAL REALITY WILL CREATE MORE RETAIL CHAOS

Augmented Reality or Virtual Reality will create more retail duality chaos.  And add more to leaders and laggards.  It will also accelerate Supply Chain transformation to deal with more orders, larger orders, and orders with more products.


Amazon’s Ambitions Unboxed: Stores for Furniture, Appliances and More

Photo
Credit Giacomo Marchesi
SEATTLE — Last Sunday in Palm Springs, Calif., Jeffrey P. Bezos, the chief executive of Amazon, climbed into the cockpit of a 13-foot robot and began flailing his arms as though warming up for a workout, causing the robot’s enormous appendages to mimic his movements.
“Why do I feel so much like Sigourney Weaver?” Mr. Bezos said, referring to the actress who wore a mechanical suit in a climactic battle in the 1986 movie “Aliens.”
The intimate audience of entrepreneurs and academics, attending an Amazon conference on robotics and artificial intelligence, chuckled. Later, Mr. Bezos posted a photo on Twitter of himself in the suit with a more menacing air, the robot’s arms raised as if about to deliver a bone-crushing bear hug.
For years, retailers have been haunted by the thought of Amazon using its technological prowess to squeeze them into powder. That battle has mostly played out on Amazon’s home turf, the world of online shopping.
Continue reading the main story
Now the fight is coming directly to retailers on actual streets around the globe, where Amazon is slowly building a fleet of physical stores. And while most of the attention has been focused on Amazon’s grocery store dreams, the company has a more ambitious collection of experiments underway.
If those experiments work — and there is no guarantee of that — they could have a profound influence on how other stores operate. Over time, they could also introduce new forms of automation, putting traditional retail jobs in jeopardy. At the same time, locating those stores close to customers’ homes could also help Amazon further its ambitions of delivering internet orders within hours.
Continue reading the main story
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The Amazon bookstore in Seattle. Credit Kyle Johnson for The New York Times
The company is exploring the idea of creating stores to sell furniture and home appliances, like refrigerators — the kinds of products that shoppers are reluctant to buy over the internet sight unseen, said one of several people with knowledge of the discussions who, in conversations with The New York Times, spoke on condition of anonymity because the plans were confidential. The stores would serve as showcases where people could view the items in person, with orders being delivered to their homes.
These would not be your average Home Depots: Amazon has considered using forms of augmented or virtual reality to allow people to see how couches, stoves and credenzas will look in their homes, the person briefed on the discussions said.
Amazon is also kicking around an electronics-store concept similar to Apple’s retail emporiums, according to two of the people familiar with the discussions. These shops would have a heavy emphasis on Amazon devices and services such as the company’s Echo smart home speaker and Prime Video streaming service.
And in groceries — a giant category in which Amazon has struggled — the company has opened a convenience store that does not need cashiers, and it is close to opening two stores where drivers can quickly pick up groceries without leaving their cars, all in Seattle. It has explored another grocery store concept that could serve walk-in customers and act as a hub for home deliveries.
Overseas, Amazon is quietly targeting India for new brick-and-mortar grocery stores. It is a vast market, and one still largely dominated by traditional street bazaars where shoppers must wander from stall to stall haggling over prices and deliberating over unrefrigerated meat sitting in the dusty open air. Amazon’s internal code name for its India grocery ambitions: Project Everest.
Last week, Amazon opened its fifth physical book store in Chicago, and it has five more announced locations under construction.
It is possible that some of the store ideas will never see the light of day. Groups within Amazon are often encouraged to come up with zany initiatives (this is the company that popularized the idea of drone deliveries). Many ideas are chucked after deeper scrutiny by executives. Amazon declined to talk about any stores it has not announced publicly.
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“We want to do something uniquely Amazon,” Jeffrey P. Bezos, the company’s chief executive, said in 2012. “If we can find that idea, and we haven’t found it yet, but if we can find that idea, we would love to open physical stores.” Credit Joshua Roberts/Reuters
“We are always thinking about new ways to serve customers, but thinking is different than planning,” said Drew Herdener, an Amazon spokesman.
Since the late ’90s, pundits have asked when Amazon — the company Mr. Bezos founded on the premise that people would rather shop from the comfort of their screens — would finally start building stores. But Amazon executives saw plenty of opportunities in online retail and new ways to reach people, from creating digital book-selling devices like Kindle to building up the Prime membership service for getting faster deliveries and other benefits.
In 2012, Mr. Bezos told the television interviewer Charlie Rose that shoppers were already well served by existing retailers and that Amazon had no interest in a me-too effort.
“We want to do something uniquely Amazon,” he said. “If we can find that idea, and we haven’t found it yet, but if we can find that idea, we would love to open physical stores.”
Despite Amazon’s internet retailing success, over time it has become clear that there is a lot of shopping that people prefer to do in person. The most glaring example is groceries — the mother of all shopping categories, with about $770 billion for the supermarkets represented by the Food Marketing Institute, a nonprofit group that includes the majority of such stores in the United States.
After pouring resources into an online grocery service, AmazonFresh, for almost a decade, the company has made only modest progress. According to people familiar with the workings of the company’s grocery business, it has struggled to operate it profitably, leading to a slow rollout of the service in new locations.
One big desire many customers have is that they want to see fresh fruits, vegetables and meat in person before buying them. The relatively high cost of home delivery — Amazon charges $15 a month for its Fresh service, on top of a $99 annual Prime membership — is another barrier.
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The company is testing Amazon Go, a convenience-store concept stocked with beverages, sandwiches and prepared meals, which are put together by chefs in a kitchen that is visible from the street. Credit Kyle Johnson for The New York Times
Online grocery delivery accounts for only about 3 percent of the market in the United States, though it is closer to 10 percent in Britain, said Randy Burt, a partner in the food and beverage practice of A. T. Kearney, a strategy and management consulting firm. Mr. Burt said Amazon’s growing interest in stores mirrored the conclusion that other online merchants with physical stores — the apparel seller Bonobos and the eyewear seller Warby Parker — had come to.
“I think they are recognizing, for certain things you can’t digitize and replicate online all the experience one has in a store,” Mr. Burt said. “The ability to create experiences is going to be critical for them to continue to get share.”
Joe Thompson, a former general manager in Amazon’s retail business, sees physical retail as key to Mr. Bezos’s outsize ambitions for the company. "I can’t help but feel that, in Bezos’s mind, he wants to be the first trillion-dollar valuation company,” said Mr. Thompson, who is now an executive at BuildDirect, an online home improvement store. To do that, he said, Amazon would have to “crack” a couple of “completely underpenetrated markets online.”
Amazon’s current market value is bobbing around $400 billion.
In the coming weeks, Amazon is expected to open its first two grocery pickup stores, in Seattle’s Ballard and SoDo neighborhoods, which will allow customers to order food online and schedule brief windows for picking them up in person. Recently, as cars ripped by, workers hung a sign on the exterior of one of the stores — to be called AmazonFresh Pickup, according to city permit documents obtained by GeekWire — before quickly covering it up.
A growing number of established grocery retailers are experimenting with this “click and collect” approach to shopping, including Walmart, Kroger and others. According to one person briefed on Amazon’s plans, the company has been developing technology for automatically detecting when a customer pulls into the parking lot so orders can be brought to them more quickly.
A few miles away from its other Seattle stores, on the ground floor of one of its many office towers in the city, the company is testing Amazon Go, a convenience store concept stocked with beverages, sandwiches and prepared meals, which are put together by chefs in a kitchen that is visible from the street.
The retail industry has been captivated by Amazon Go’s technology since the company unveiled the store late last year. The store uses a combination of sensors and artificial intelligence to automatically detect the food items shoppers remove from shelves, so they can leave the store without visiting a cashier — the way customers do when they bolt from an Uber.
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The Amazon bookstore in Seattle has a space for children to read and play. Credit Kyle Johnson for The New York Times
“Amazon is wonderful at frictionless commerce,” said Timothy Laseter, a professor at the University of Virginia’s Darden School of Business.
There have been glitches with the technology that Amazon engineers continue to work on, according to a person familiar with the operations. For now, only Amazon employees are allowed to use the store. Amazon previously said it would open Amazon Go to the public in early 2017.
Only Amazon employees are allowed to use the store, for now. The company has said it would open Amazon Go to the public early this year. Video by Amazon
If Amazon is successful at automating the checkout process, the long-term implications for employment could be far-reaching because other retailers would probably do everything possible to copy it. More than 3.4 million people are employed as cashiers in the United States, according to the Bureau of Labor Statistics.
Amazon Go technologies like artificial intelligence are “Latin for ‘fire cashiers,’” said Scott Galloway, a professor of marketing at New York University’s Leonard N. Stern School of Business.
“I’ve probably been in 30 boardrooms of retailers in the past year,” Mr. Galloway said. “I would say the No. 1 topic of conversation is Amazon.”
For months, reports have circulated that Amazon was considering a concept for a larger grocery store that would combine shopping formats like traditional walk-in purchases, click-and-collect and home delivery. One of those articles, a February piece by The New York Post, described a futuristic Amazon grocery store staffed by robots, requiring only three human workers.
That was too much, apparently, for Mr. Bezos, who became uncharacteristically feisty on Twitter, attacking the article by saying The Post’s sources had “mixed up their meds.”
But a group within Amazon has explored another larger grocery store format, according to both a person familiar with the concept and to internal Amazon documents reviewed by The New York Times. The store could stock fresh produce, meats and other items in a public area of the store, while keeping frozen foods, cereals and other items traditionally found in the center of a grocery store behind a wall, in what would be a kind of small Amazon warehouse. Workers behind the wall, not robots, could quickly package orders for customers.
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The exterior of the Amazon Go grocery store is seen during the location’s beta opening in Seattle last December. Credit David Ryder for The New York Times
The idea resembles a concept laid out in a paper, “A Beautiful Way to Save Woolworths,” written by the retail industry consultant Brittain Ladd, who was later hired by Amazon. The status of that project at Amazon is unclear: One person said it never advanced far and was effectively dead, and another disputed that characterization.
While Mr. Bezos was known for coining the motto “Get Big Fast” in the early days of Amazon, the company’s plans in physical retail could be better described as “Get Big Slow.” Some reports have said Amazon has discussed building up to 2,000 grocery stores. But that figure was floated mainly as a hypothetical to consider the impact on Amazon’s supply chain, not as a goal that was under serious consideration, a person familiar with the discussions said.
In addition to the two soon to open in Seattle, as many as five more AmazonFresh Pickup locations could open by next year, and the company hopes to expand Amazon Go to Britain and several cities in the United States in the same time frame, this person said.
India could represent another big market for Amazon in physical retail. The company, which has vowed to spend billions of dollars on its efforts in the world’s second-most populous country, recently sought approval from the Indian government to open online and physical food stores in the country, The Economic Times reported in February.
According to a person familiar with Amazon’s India grocery efforts, the company hopes to open its first Indian grocery store in Bangalore. In a statement, Amazon said the company was excited by the Indian government’s efforts to encourage foreign investment in a “stronger food supply chain.”
“We have sought an approval to invest and partner with the government in achieving this vision,” Amazon said.
For Mr. Galloway at N.Y.U., the slow pace of Amazon’s rollout of stores is a sign that it has not figured out physical retail yet, and that has surprised him. Five years ago, he believed Amazon would have hundreds of stores by this time.
“What appears to be clear is they haven’t yet zeroed in on a format they’re willing to massively scale,” he said. “This is a company that the moment it figures out something that works, it puts nuclear energy behind it.”

Saturday, March 25, 2017

TARGET AND WAL-MART WITH DIFFERENT STRATEGIES

Target and Wal-Mart paint diverging future strategies




Kavita Kumar, Star Tribune
Target CEO Brian Cornell talked about the retailer's prototype store at the Shoptalk conference in Las Vegas.


– As they took turns on a stage addressing thousands of industry leaders last week, top executives from Wal-Mart and Target Corp. offered different road maps of how to survive — and thrive — in the fast-changing retail landscape.
Target Chief Executive Brian Cornell told the audience he is doubling down on stores, envisioning them as “shoppable distribution centers” where people can come in and browse core products such as apparel and accessories or grab an online order and some food to go.
About 20 minutes later, ­Marc Lore, Wal-Mart’s e-commerce chief, described a company making big investments in online as it looks to take on Amazon.com directly.
As Target is pulling back on some big-thinking Silicon Valley projects — a much-buzzed-about topic of conversation at the conference — Wal-Mart announced it is opening an incubator there for start-ups looking to disrupt the future of retail.
Time will tell which strategy will pay off. But the stakes are high.
Last week, household names such as Sears and Payless ShoeSource joined the growing list of retailers on a death watch as many in the old guard continue to struggle to keep up with online shopping and other changes in consumer behavior. News of their impending struggles hung over the Shoptalk digital retail conference with Silicon Valley-funded start-ups touting artificial intelligence and augmented reality as other solutions to help revitalize and modernize the industry.
To be sure, both Minneapolis-based Target and Wal-Mart have devoted considerable resources to both their stores and online operations.
Wal-Mart has been spiffing up its stores and investing in increased wages and training academies for its front-line workers. Target has hired hundreds of engineers in the last couple of years to stabilize and upgrade its website and has seen significant online growth, helping to make up for falling foot traffic. A spokeswoman said the retailer continues to focus on improving the mix and appeal of the website.
“Both are following a similar trajectory in understanding that omnichannel (a mixture of stores and digital) is the way forward,” said Michelle Grant, head of retailing for Euromonitor. “But Wal-Mart is making a bigger bet on dominating the e-commerce market” while Target is focused on integrating stores into its digital strategy.
Lore said at an industry event during the conference that his mandate is “to crush the U.S.” When asked if that meant being No. 2 [to Amazon], Lore, a former Amazonian, didn’t blink: “Win means win.”
Wal-Mart brought Lore in about six months ago to run its e-commerce operations in the United States after also buying his online retail start-up, Jet.com, for $3 billion. Since then, Lore has been integrating his Jet.com staff with that of Walmart.com so there’s one category manager in charge of both websites.
“It’s incredibly challenging for a company to sort of hand over the keys to a start-up,” he said from the Shoptalk stage. Wal-Mart CEO Doug McMillon “and the board made a big move in empowering me and the team to basically run all of Wal-Mart’s e-commerce business. That really got us fired up. We sort of carried that on with the acquisitions we’ve done.”
Under his leadership, Wal-Mart has snapped up three hip online retail companies in the last several months — outdoors retailer Moosejaw, footwear company Shoebuy, and most recently apparel retailer ModCloth. The CEOs of those companies are now being charged with not only running their own businesses but, for example, the entire shoe category for Walmart.com and Jet.com.
Lore acknowledged it can be challenging for a publicly traded company to invest beyond the next couple years out. But with Store No. 8, the just-announced incubator, he’s hoping to do just that by bringing in top entrepreneurs and giving them a budget to build start-ups looking out five to 10 years down the road.
“So there’s not a focus on just today,” he said. “They can actually think bigger.”
What’s happening at Target
That’s in contrast to Target, whose sales have been on the slide and recently began reining in some of its further-looking innovation projects such as an internal start-up called Goldfish and a store-of-the-future concept that was killed weeks before it was set to open in Silicon Valley.
“There are some great new things we’ll continue to evaluate,” Cornell said at Shoptalk. “We’ll look around corners. But I want to make sure the innovation investments we’re making are going to impact our business over the next two or three years.”
For now, as Target looks to return to positive sales, a big part of the next two or three years will be focused on improving its supply chain, launching a dozen new brands and remodeling and opening new stores.
The majority of shopping will continue to be done in stores for the foreseeable future, Cornell said. And Target sees stores as a key to digital growth since they already fill about 55 percent of online orders through in-store pickup or ship-from-store ­capabilities.
By leveraging its network of 1,800 stores, Target can get items to customers faster and spend less in shipping costs, he said. And when people come by the store to pick up their orders, it brings them to the store where they might buy other items.
“In this new era of retail, stores need to be multidimensional showrooms — they have to be destinations for services, and more and more we’re positioning ours to function as guest-facing hubs in a smart network,” he said. “Think of a Target store of the future as being a hyper local, shoppable distribution center.”
That’s why Target plans to remodel about 600, or about a third, of its stores in the next three years. The idea is to turn its stores into places of ­inspiration.
He didn’t name any names, but said the retailers that deferred investments in their stores are those that are ­struggling today.
Target’s new store prototype has two separate entrances, Cornell said, one meant to inspire with home and apparel displays while the other aimed at convenience with groceries and beverages moved to the front and an online order pickup area nearby.
“Our guests like to shop,” he said. “Our guests love that sense of discovery. They expect an elevated experience. So we need to create an ­environment that is worthy of their time.” 

BLOCKCHAIN FOR SUPPLY CHAIN MANAGEMENT

Blockchain for supply chain management should be a blend of centralized and decentralized to integrate the 3 supply chains—product, finance, and information.




Thursday, March 23, 2017

SUPPLY CHAIN VISIBILITY

SUPPLY CHAIN VISIBILITY IS AOBUT THE ORDER & PRODUCT, NOT THE TRAILER/CONTAINER. IS TRACK AND TRACE REAL VISIBILITY?




BLOCKCHAIN -- LOGISTCS VS SUPPLY CHAIN MANAGEMENT

Some blockchain stories mix-up and confuse logistics vs supply chain management.  #SCM




Wednesday, March 22, 2017

CONTAINER LINES BEING INVESTIGATED FOR PRICE FIXING

Let's see. Container lines lose billions. Being investigated for price-fixing.  Is this--imagine what they would lose without fixing prices?

Shippers subpoenaed in U.S. price-fixing investigation - WSJ



March 21 U.S. Justice Department investigators have subpoenaed top executives of several container shipping companies as part of an investigation into price fixing, the Wall Street Journal reported, citing people with knowledge of the matter.Maersk Line, a unit of Danish shipping and oil group A.P. Moller-Maersk, confirmed that it was issued a subpoena related to a probe into the container shipping industry on March 15.
"The subpoena does not set out any specific allegations against Maersk Line," a Maersk Line spokesman said, adding that the company will fully cooperate with the authorities in their investigations.
The subpoenas were issued during a meeting of the world's 20 biggest container shipping operators in San Francisco, the Journal reported.
German container shipping line Hapag-Lloyd AG also confirmed it was given a subpoena by Justice Department investigators, the report said. (on.wsj.com/2mMnQyJ)
Hapag Lloyd could not be immediately reached for comment. (Reporting by Komal Khettry in Bengaluru; Editing by Saumyadeb Chakrabarty)

MANUFACTURERS, OMNICHANNEL, SUPPLY CHAIN MANAGEMENT

Omnichannel and the supply chain to drive it are not exclusive to retailers. Who will be the leaders and laggards for manufacturers?




Tuesday, March 21, 2017

FEDEX HAS MIXED RESULTS

FedEx has mixed results.  Are they staying too much with their B2B biz model and missing on B2C e-commerce and its growth?

3-21-17 7:59 PM EDT | Email Article

By Paul Ziobro 
FedEx Corp. said some of its largest retail customers shipped fewer packages during the holiday season than forecast, after the delivery giant had ramped up spending and staffing in anticipation of a crush of deliveries.
"We provided capacity that went unused," FedEx Chief Financial Officer Alan Graf said on a conference call Tuesday.
The outcome hurt FedEx's bottom line during the fiscal third quarter ended Feb 28. While revenue surged 18%, helped by higher rates and more packages shipped, overall margins fell amid a 30% rise in fuel costs and investments to keep up with e-commerce growth.
Both FedEx and rival United Parcel Service Inc. are struggling to keep pace with the dramatic growth of e-commerce. While more people doing their shopping online is bringing added volume into their networks, both are spending heavily to build out package-sorting centers and automating facilities to handle the extra deliveries more profitably.
Both chains are also eyeing the ambitions of Amazon.com Inc., which is grabbing retail share and slowly building its own delivery network. While that could cut into FedEx's e-commerce business, the company says that 85% of its operation is business-to-business deliveries.
"We think we have a not-great risk of being disrupted," FedEx Chairman and Chief Executive Fred Smith said.
FedEx backed its outlook for the fiscal year, and implied a healthier fiscal fourth-quarter as the carrier now adjusts fuel surcharges weekly instead of monthly so it can better respond to fluctuating costs. The company cut its capital spending outlook for the year by $300 million to $5.3 billion, as it reduces spending in its ground business.
FedEx shares rose 2.5% in late trading to $196.70.
Over all, third-quarter profit rose 11% to $562 million, or $2.07 a share. Excluding integration and restructuring costs tied to the acquisition of TNT Express, profit fell to $2.35 a share from $2.51 a share. Revenue rose 18% to $15 billion.
The Memphis-based company said the integration of the Dutch parcel delivery company TNT Express, acquired last year for $4.8 billion, is progressing smoothly and would add between $1.2 billion to $1.5 billion to the operating income of its Express division by fiscal 2020.
--Maria Armental contributed to this article.
Write to Paul Ziobro at Paul.Ziobro@wsj.com

SUPPLY CHAIN PERFORMANCE METRICS

Key supply chain performance metrics of inventory velocity and time compression reflect the new business reality and the global supply chain revolution.




SUPPLY CHAIN COMPLEXITY

Challenge with supply chain management is its complexity, scope and geographic reach—no other area in a business has it.





Monday, March 20, 2017

MONOLITHIC SUPPLY CHAIN

The standard, monolithic supply chain is not agile and contains its own performance issues.




Friday, March 17, 2017

TRANSPORTATION STRATEGY FOR SUPPLY CHAINS

Transportation Strategy for Supply Chains--
https://www.linkedin.com/pulse/transportation-strategy-supply-chains-tom-craig

Thursday, March 16, 2017

INVENTORY CONTROL

Is inventory control an oxymoron?




IS AMAZON A LOGISTICS PROVIDER OR SOMETHING ELSE?

Amazon--being a logistics provider or taking control of its supply chain--something competitors are not doing--to provide new customer experience?

3-15-17 6:14 AM EDT | Email Article
By Laura Stevens and Erica E. Phillips 
Amazon.com Inc. has developed a business to handle shipments for its sellers by land and by sea -- and soon by air.
The Seattle-based retail giant is planning to offer its sellers in China the ability to fly their goods internationally as air cargo, according to an Amazon Logistics site.
The move is an expansion of Amazon's growing business as a global freight forwarder and third-party logistics company, putting it more directly in competition with companies like United Parcel Service Inc. and Deutsche Post AG's DHL. In recent months, Amazon began handling the shipment of goods by ocean to its U.S. warehouses from Chinese merchants selling on its site, taking on a role it had previously left to global freight-transportation companies.
Amazon's entry into the market is "a huge wake-up call to an industry that's been very slow to adopt technology," said Ryan Petersen, chief executive of Flexport Inc., a San Francisco-based startup freight-forwarder that uses software to scrub inefficiencies from the process of arranging international cargo shipments for small- and midsize companies.
Amazon's offerings vary by country, a spokeswoman said. "In China, we offer Amazon Logistics+ to provide operational support to companies of all sizes," she said.
The site outlines a corner of how Amazon is pushing forward in its plans, outlined in a September article in The Wall Street Journal, to one day haul and deliver packages and cargo for others as well as itself.
Amazon has recently detailed plans to build an air cargo hub in the U.S. and has said it would lease 40 cargo jets. The company has said that it needs to build out its delivery business to ensure the ability to deliver the growing amount of merchandise its customers order.
In China, it is unclear whether Amazon would be booking airspace via other carriers or flying its own planes.
The Amazon Logistics site focuses on Chinese customers, who are sellers on its site as well as other businesses. The site says it offers end-to-end one-stop ocean freight services. As for airfreight, "we currently are developing this service and plan to quickly introduce it to a large number of our sellers," the site says.
Amazon can do pickups, warehousing, line-haul transportation, delivery, as well as handle import and export needs, the site says. Primary delivery destinations include the U.S., Europe and Japan.
"Our solution provides a world-class service offering," Amazon says on the site. "As part of one of the world's leading e-commerce companies, our operations team has strong experience in providing professional logistics solutions. With our own strong logistics volume, we can reduce your operational costs."
Many traditional freight forwarders still conduct their business via phone, email or even fax machine, but Amazon's entrance into the sector could drive shippers away from that method in favor of a user-friendly technology platform. Mr. Petersen said at least one of his firm's customers has used Amazon's service -- now a direct competitor to Flexport's technology -- to arrange an ocean freight shipment.
"You can't just put your head down in the sand and pretend that change is not going to come," Mr. Petersen said.
Write to Laura Stevens at laura.stevens@wsj.com and Erica E. Phillips at erica.phillips@wsj.com

ASIA-EUROPE OCEAN SHIPPING RATE WAR WITH NEW ALLIANCES?

A rate war with new ocean shipping alliances? And they have not started up? Asia-Europe trade.



      


MSC Home Terminal DSC_8974 radar
Could yet another rate war on the Asia-Europe westbound trade be round the corner, as the three alliances prepare for battle over market share next month?
According to data from Alphaliner, from 1 April, the 2M+HMM (including Hamburg Sud), the Ocean Alliance and THE Alliance will offer 17 weekly strings between Asia and North Europe – one more than currently provided by the current four alliances.
The analyst says total weekly capacity on the route will jump by 9.6%, with the biggest increase coming from the 2M, which, apart from upsizing its five loops to ultra-large container vessels (ULCVs) of 18,000-20,000 teu, will introduce a sixth loop.
Maersk and MSC have sought to justify the additional AE7/Condor service by arguing it would be necessary to accommodate the additional volumes from the slot charter agreements with HMM and Hamburg Sud.
The extra loop and the vessel upgrading will see the 2M’s average weekly capacity between Asia and North Europe increase by 23%, from 83,500 teu to 103,000 teu next month.
Of this extra capacity, Alphaliner reports that HMM will take about 6,000 teu and Hamburg Sud around 4,000 teu, leaving – in theory – some 10,000 teu of available slots to be shared between Maersk and MSC on the new service.
However, one well-connected source told The Loadstar recently that Hamburg Sud’s Asia-North Europe weekly requirement from April would be “less than 2,000 teu”, given that it had “wound down” much of its marketing on the trade ahead of its eventual sale to Maersk Line.
This was confirmed last night in a statement from Hamburg Sud owner Oetker Group, which said the sale and purchase agreement had been signed with Maersk, leaving the companies’ respective shareholder to authorise the sale and competition authorities to issue regulatory approval – the sale could be closed by the end of the year.
At the same time, sources have suggested HMM might struggle, initially, to cover a weekly allocation of 6,000 teu until it can repair shipper confidence.
Anecdotal reports and contract indices suggest that the container lines have been successful in hiking mid- and long-term rates on the route, and Alphaliner points out that spot rates remain at over $800 per teu, compared with the $200 sub-economic levels of a year ago.
However, as has been seen so many times in recent history, when empty slots start chasing cargo, rates can very quickly spiral down.
And HMM and Hamburg Sud will still have to pay for their slot charters – used or unused – a factor that is understood to have cost the German carrier a lot of money in its global slot exchange deal with UASC.
Alphaliner also argues that the new alliances will be reluctant to concede market share.
“No void sailings are scheduled on any new strings to be launched in April, even though some of the old services, in the process of being phased out, will provide overlapping services.”
This, it added, would “result in additional capacity on the route during the transitional period”.
According to Alphaliner, the new alliance capacity share between Asia and North Europe from 1 April will be: 40% controlled by 2M+HMM, 35% by the Ocean Alliance and 25% by THE Alliance.
Meanwhile, on the Asia-Mediterranean route, Alphaliner says the trade will see a 6.9% increase in weekly capacity from next month – rising from 134,000 teu to 143,000 teu.
According to the alliances’ published networks, the 2M will retain four weekly loops between Asia and the Med, while the Ocean and THE alliances will offer five and three strings respectively. Zim will run a single standalone service.

NEW SHIPPING ALLIANCES

Will new shipping alliances change anything?  Rate cuts?  How well will they work on launch?  Roiling waters. More sharks in the water?




Wednesday, March 15, 2017

RETAIL AND INVENTORY VISIBILITY

Inventory visibility is a problem that predates ecommerce omnichannel but was not corrected.


Online shopping changes consumers in-store expectations


Shoppers aren’t happy with the in-store shopping experience, and retailers are struggling to adapt, a Capgemini report finds.

Nearly a third of all U.S.-based shoppers (31%) view shopping in stores as a chore, while 17% say they’d rather wash dishes or clothes than venture into a store, according to consulting firm Capgemini, which surveyed 500 retail executives and 6,000 shoppers around the world in November for its report titled “Making the Digital Connection: Why Physical Retail Stores Need a Reboot.”
Part of that dissatisfaction with in-store shopping stems from how online shopping and the choices offered via e-commerce have raised consumers’ expectations.
“Consumers are bringing their online expectations—personalized and hassle-free shopping—into the store,” Capgemini writes. “However, our research shows that stores are struggling to meet these heightened expectations.”
The inability to easily compare products is a major pain point shoppers face in stores, with 71% saying they find it difficult to do so when in a store.
So what do retailers with physical stores have to do in order to win shoppers accustomed to having a seemingly endless array of options available at their fingertips via desktop or mobile devices?
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Retailers could improve their store inventory visibility online?, given that 75% of shoppers say they want to be able to see what a store has in stock before heading to the location, Capgemini’s data shows.
Consumer satisfaction for retailers is “worryingly low,” according to Capgemini, as nearly one in two retailers in the Capgemini Future of Retail Store Survey received a negative score from consumers. “While many retailers are taking steps to remedy this through combining the virtues of physical stores with new technologies, over half of retail executives in our survey feel that the digitization of their stores is moving too slowly as they struggle with a range of challenges, from adequate training for store associates to difficulties in measuring the ROI of digital investments,” Capgemini writes.
54% of the retail executives surveyed say they don’t feel as though their stores are doing enough adapt to the digital age.
“Introducing technology into the overall consumer experience for physical stores will be key to addressing these falling satisfaction levels,” Capgemini writes. “Among consumers who visited stores offering digital technologies, 59% found them useful and 50% use them frequently.”
But U.S.-based retailers aren’t judged as harshly as merchants in other parts of the world. Western European consumers have a more negative view of in-store shopping than U.S. consumers:
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  • Sweden: 54% view in-store shopping as a chore, while 47% would rather wash dishes or clothes.
  • Spain: 49%, 37%
  • Netherlands: 47%, 35%
  • Italy: 42%, 39%
  • U.K.: 37%, 22%
  • France: 40%, 41%
  • Germany: 40%, 32%
  • U.S.: 31%, 17%
  • China: 29%, 22%
  • Average among the nine countries: 40%, 32%