December 20, 2016
Ever young, beautiful and with a smartphone: Frame from the promotional video of Amazon go
At first blush it looks like progress. Next month Amazon will go public with a pilot convenience shop that has no checkout lines or cashiers. The beta model for the new "Amazon go" store is currently being tested by company employees in hometown Seattle. A corporate video explains the concept: Sensors and articifial intelligence detect what shoppers take from the shelves and add each item to a virtual cart. The price of the goods is then debited from their smartphone when they leave the store. If the "Just Walk Out" technology is implemented by Amazon for bricks & mortar retailers or is copied by them, checkout-free stores will obviously have a positive impact on their P&L. Like most employers, retailers, whatever their highly paid CEOs may say to the contrary in public, generally see their staff as a cost rather than as an asset. So they are likely to embrace the new idea with open arms. But it is surely also a tacit admission of failure.
November 29, 2016
Help from big data: Otto delivers more products to online customers in two days
Thanks to technology, retail distribution is getting faster and faster. Ecommerce retailer Otto Group provides a good example. The Hamburg-based company is now using Blue Yonder software to deliver brand products to customers faster than ever before. This means that even items not stocked in large quantities at corporate warehouses can still reach the customer within two days. Otto is expanding the implementation of Blue Yonder's predictive applications to an increasing number of business processes. The retailer has already employed artificial intelligence by Blue Yonder for a number of years for the optimization of purchasing and stock storage processes as well for 'dynamic pricing'. But now Otto is using Blue Yonder as an intelligent order solution for products with high stock turns where the multichannel retailer would normally only contact the manufacturer after customers purchase online.
November 18, 2016
Eagle has landed
It's certainly counter-intuitive. Amazon has become big and brawny through being mean and lean. While traditional bricks & mortar retailers remain encumbered with their physical store bases, the US online giant has soared through cyber space like an eagle. So why is Amazon Fresh going offline in Seattle and experimenting with a drive-in? Could the tech star be on the verge of clipping its prime competitive advantage? Or is the project just another laudable example of the way US companies fearlessly progress by trial & error? Meanwhile, retailers can only hope Amazon doesn't conclude that they charge far too much for their often grim customer service and depressing store ambience. As there is no point in asking the secretive and opaque behemoth for more information about its ultimate intentions, let's take a sneak peek at what exactly the company is building in its home town.
November 11, 2016
French connection: Michel-Édouard Leclerc and Rewe boss Alain Caparros like shopping together in Brussels
It was only a little letter from a small office in Brussels, but it has sent a big shockwave through the industry that could revolutionise the way retail groups do business with their major suppliers. The sender, Eurelec Trading Scrl, opened for business in June as a cooperative joint-venture between Rewe und Leclerc. Its function as a European buying office is to obtain the best possible terms & conditions for these German viz. French retail giants. Logically, Eurelec has started its annual negotiations for 2017 with the big boys. We understand that there were originally six international brand manufacturers involved, but now only four: Mars, Mondelez, PepsiCo and SCA. Apparently, they have been asked to come to a decision by the end of this month, and it is generally believed that they will accept. Eurelec seems to have detailed knowledge of the terms & conditions these suppliers accord retailers on both sides of the Rhine. So has there been collusion between Rewe and Leclerc in contravention of EU cartel law?
November 10, 2016
Get soft, now!
There has been a sudden disappearance of ties within the ranks of German discount retailer Aldi. "Our company is open to the world," says one manager by way of explanation. After all, when a retailer constantly modernises its stores and operations, why not trendy-up the appearance of your staff? This will surely also make one seem more attractive as a potential employer to a rapidly declining number of young job seekers. The move, however, is far more revolutionary than it sounds because perfect ties have always been part of the uniform for men at Aldi. "They even used to keep them on in Australia when it was 40 degrees Celsius," says one astonished supplier.
November 10, 2016
In God we trust
Times have just got a lot tougher for Latinos, Muslims, Blacks and all women who don't look like Barbie dolls. Perhaps they will appear better to unemployed steelworkers in the Rust Belt if they seriously believe that a billionaire businessman, happy to use cheap labour and Chinese steel, is really their best friend. But times certainly look good for middle-aged men with arresting hairstyles. As the media debate 'Trumponomics' and the moods of the man the world's most powerful nation intends to entrust with the nuclear attack code, may we ask whether president-elect Donald Trump will be good or bad for German retailers?
November 3, 2016
Saving in Asia: Aldi wants to make a cultural contribution
Nín hǎo, Aldi, a nation of savers awaits you! Germany's most profitable discounter is opening an online shop in the People's Republic of China. The privately-run company is using Australian subsidiary, Aldi Stores, as a springboard for entry. A number of Australian suppliers have apparently already been briefed on the packaging and labelling requirements for www.aldi.cn. The domain name was secured by the Mülheim-based retail giant a number of years ago and now bears the strapline "Handpicked for you". So when can more than 415 million Chinese online customers ignite their firecrackers and perform the dragon dance?
September 29, 2016
Transatlantic anniversary: HBC boss Jerry Storch and Kaufhof CEO Olivier Van den Bossche (second and third from the left)
Take a retail segment in terminal decline on a mature market; add a structural crisis in the inner cities; mix it with some local mismanagement; add a dash of dubious international investment; and what have you got?: the tragicomic world of the German department store. It was therefore with mixed feelings when one learned exactly a year ago to this day that Canada's leading department store operator Hudson's Bay Company (HBC) had purchased Metro Group's unloved daughter Galeria Kaufhof for €2.9bn, including debt. After all, the German trade had only recently experienced Nicolas Berggruen's bizarre and fateful purchase of rival Karstadt. And the last 20 years bear witness to a string of failed foreign investors from Walmart to Marks & Spencer. It seemed at the time as if HBC was dashing into the abyss like a troop of Canadian Mounties in a snowstorm. Twelve months later, our newspaper received a formal invitation to brunch at Galeria Kaufhof head office in Cologne. The principal hosts were Gerald (Jerry) L. Storch, CEO of HBC, and Kaufhof boss Olivier Van den Bossche. Was it all to announce a happy first anniversary, or a rapid return flight to the other side of the Pond?
September 15, 2016
May we draw your attention to a new publication entitled "The E-Commerce Book – About a Channel that Became an Industry"? Our company, dfv Media Group, may be the largest independent trade publisher in Europe, but its emphasis is essentially on over 90 B2B magazines and newspapers such as Lebensmittel Zeitung. Dfv Media Group's book publishing arm is relatively small and, like many international competitors, has to survive in an increasingly online world. If young managers read at all, they are more likely to use an e-book or a tablet. But our book publishers and its authors are obviously also German and must strive in a business world dominated by the English language and a lack of natural contacts with English-speaking distribution partners. Despite these structural issues, it is a pleasure to see how our book publishing colleagues use both flair and initiative to turn such obvious disadvantages into opportunities and to punch above their weight. One such project, supervised by senior manager Caroline Schauwienold, represents an updated and considerably extended English version of the German trade bestseller 'Das E-Commerce-Buch' by Alexander Graf and Professor Holger Schneider.
August 18, 2016
Pedro Pereira da Silva: "We see no constraints on the opening of new stores throughout Russia"
Pedro Pereira da Silva has been the frontman of Dixy Group for just over five months now. At first blush, the former CEO of leading Polish grocer Biedronka and COO of Lisbon-based parent Jerónimo Martins is a pretty unlikely candidate to run Russia's fourth-largest retailer. After all, the 48-year-old manager is Portuguese and only a year ago couldn't speak a word of Russian. So he made a big career gamble on an Uncle Vlad Russia hit by EU sanctions in an economic recession. But what looks like madness has, on closer investigation, method. When the owners of Dixy, including Russian billionaire Igor Kesaev, poached da Silva from his former employers at the beginning of March, his retail credentials were sparkling. During a 16-year stint at Biedronka, he transformed the discounter into a vibrant market leader. Success counts the world over, but nowhere more so than with the pragmatic, yet highly-imaginative Russians. Now they've got him, though, where does da Silva want to take them?