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The Global Telecom Wireless Evolution is Speeding Up: Are Retailers Ready?

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Global Trade Daily

The Global Telecom Wireless Evolution is Speeding Up: Are Retailers Ready?

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The rollout of 5G technology over the past five years has been slow. But there has been a recent uptick in implementation with over 7.9 billion global 5G connections expected by 2028.

Read also: Telecom Retailers Can Improve Customer Experience By Embracing Integrated Solutions

While 5G is still being implemented, the international telecom industry is already preparing for 6G development. The United Arab Emirates has built a roadmap with plans to launch 6G in 2030. Nokia is teaming up with Indian companies to research 5G and 6G communications. In North America, NVIDIA is building an AI platform to ramp up 6G development, also with a 2030 commercialization date.

To put things in perspective, 6G technology could be commercially available in about six years. That may seem like a long timeframe, but if 6G development keeps up the pace, six years may not be long enough to speed up telecom retail operations. Currently, the demand for 5G devices is increasing at a compound annual growth rate of 40%. 6G technology implementation will warrant devices that offer higher-speed connectivity, and even better performance and capacity. All attractive propositions for customers that will translate to high demand for 6G devices.

Telecom retailers need to begin organizing their operational policies and their point of sales technology from now to address the upcoming demand for 6G devices.

6G expectations for telecom retailers

6G implementation will result in an increase in demand for faster and better smart devices. Video streaming requirements alone are pushing customers to buy 5G mobile devices and even 5G home internet. With 6G’s better speeds promising even more powerful devices, should wireless retailers expect to grow their sales revenue?

The answer is complicated. On the one hand, yes, there will no doubt be customers who want the latest 6G-enabled premium smart device. On the other hand, we are seeing a trend towards longer lasting devices, as well as a customer preference for cost-effective devices. Retail sales teams have observed a significant decline in how often customers upgrade their devices. Instead of once every 18 months, customers are upgrading their devices once every three years. Since 6G devices will be expected to last even longer than 5G devices, it could possibly translate to fewer sales. Even though retailers will be positioned to charge premium prices for higher rate plans, it may not be enough to offset the loss from fewer overall sales.

The answer lies in diversification. Wireless retailers need to diversify their inventory in anticipation of decreased sales. Sales of smart home devices and Internet of Things (IoT) devices are projected to grow over the next couple of years. Retailers should be stepping up now to address customer needs for smart home devices. By the time 6G devices enter the market, retailers will have a well-diversified portfolio of products that will enable them to maintain their revenue generation channels.

Customer experience should take priority

For telecom retailers, even having a large inventory of the newest 6G devices may not convert into an equal amount of sales if customer experience isn’t improved. There are numerous lessons that can be taken from the rapid expansion of prepaid retail stores in the US.

Device activation in telecom retail has traditionally been difficult and slow for everyone involved–operators and sales associates, but more importantly, customers. In 2023, the average device activation time was 30 minutes, with some customers experiencing up to 60 minutes’ wait time. Progress has been made to reduce activation costs and customer wait times. But it’s not a one-time fix, rather an ongoing process. Telecom retailers need to be constantly aware of customer pain points and address them swiftly.

While the aim for telecom retailers will be to stock and sell more 6G device sales, there are a host of other uses for 6G technology behind the scenes. For example, 6G connectivity can speed up data analysis, ensuring sales associates have customer data and sales patterns as and when they need it. Faster access to data will enable associates to upsell more accurately. Wireless retail operators will also be able to offer personalized customer experiences across multiple channels, thus strengthening customer relationships.

Beyond data, 6G technology can improve logistical and operational inefficiencies, leading to a reduction in customer wait times, as well as better employee retention.

Key considerations for 6G implementation

Artificial intelligence (AI) is being heralded as an important tool in the development of 6G networks, especially for equipment and resource optimization. But AI is already in use now in the telecom sector. Most industries will attest to having more data than is humanly possible to analyze. Which is where AI comes in. AI can be employed by the wireless retail sector for collecting and processing customer data and suggesting better rate plans.

However, there are numerous ethical considerations when using AI. AI technology needs human intervention, not only because of the human biases involved in programming AI, but because AI hallucinations, where AI makes things up, can have a negative impact on businesses. Additionally, businesses still need to get consent to collect customer data, and they need to put in place policies for how and why that data is used.

Another key consideration for 6G implementation is the need for sustainability. Developing and operating 6G networks must not add to the billions of kilograms of e-waste the planet is already generating. As companies like NVIDIA and Nokia go full steam ahead in building 6G networks, they must take into account how that building process, as well as maintenance and recycling, will impact the environment.

The 2030 timeline is uncertain, and use cases have not been determined

There are still a few challenges in the way of 6G implementation. While the telecommunications industry has learned quite a few lessons from the roll out of 5G, that doesn’t necessarily mean the issues that plagued 5G operators won’t impact 6G technology. 

Certain issues have been resolved. For instance, the 5G rollout was slowed down by the COVID-19 pandemic, which should not be a concern for 6G implementation. Additionally, the heavy network boxes that were used for 5G deployment have already been reduced in size. Vodafone recently launched 5G network-in-a-box, which could pave the way for a smoother 6G installation.

However, 5G operators struggled when private individuals used unlicensed Wi-Fi spectrums, a problem that could arise again for 6G deployment. 5G C-Band transmissions have had the aviation industry concerned about interference with GPS and navigation that are still in the process of being resolved. 

Certain issues around 5G implementation could have a detrimental impact on 6G deployment. The short wavelengths of 5G have made it difficult to penetrate interiors and prevented it from covering larger distances. Population density has also affected 5G rollout–numerous Asian countries have had a better 5G rollout than North America, due to having a far denser grid of mobile sites. Even if 6G technology is developed faster than expected, the actual coverage area may not be sufficient for telecom operators to recoup the costs of implementation, let alone generate profits.

Given these uncertainties, the real priority of telecom retail operators should be to strategize around the macro-trends identified above, which are much more certain. At this stage, it’s less important to plan for the possibility of 6G, and far more urgent to plan for current consumer trends that collide with emerging technologies, such as retail diversification with IoT products, and enhancing operations using AI. 

Wireless retail success, with 6G products or otherwise, requires interconnected technologies

Omnichannel retail experiences have become the norm across industries, and telecom retail is no exception. The growth that 6G devices promises will mean little in terms of revenue, if those omnichannel experiences aren’t optimized.

The retail industry now requires systems to talk to each other in real-time without users, usually sales associates, having to deal with clunky interfaces or multiple different software. That need can only be answered by adopting integrated technologies.

Starting now, telecom retailers can opt for a holistic software that ties their disparate systems together and enables their staff to manage processes easily. Whether its HR systems, business operations, tax management, or inventory management, an Interconnected Commerce approach will ensure retailers are ready for 6G or any other challenge.

About the Author

With a career spanning 15 years in wireless telecommunications, Jason Raymer is Senior Vice President of Revenue & Client Experience for iQmetrix, North America’s only provider of Interconnected Commerce solutions designed to power the telecom retail industry. Jason spent the early days of his career navigating the intricacies of consumer electronics retail, which quickly evolved into revenue and operations roles at Tier 1 and 2 North American telecom carriers. These experiences have proven invaluable to his current leadership role, which has a focus on strategic vision that propels organizations to new heights. Jason’s expertise lies in crafting revenue-generating strategies, leveraging technology to help telecom retailers optimize their operations, and fostering strong client relationships. As a seasoned industry expert, his commitment is driving iQmetrix’s success in an ever-changing landscape, and propelling the company to the forefront of the telecom industry. Jason is a champion of initiatives that harness the power of emerging technologies, ensuring iQmetrix solutions remain agile and competitive in a rapidly evolving digital ecosystem.

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Archives, Commentary, Global Trade Daily

Big Dreams, No Cash; Funding Your Brick-And-Mortar Business

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The digital world made starting a business easier. Anyone with a computer, a phone and a spare room could give entrepreneurship a try, no office or storefront necessary.

Or so it would seem.

In truth, not every business can operate without a brick-and-mortar presence. Cyberspace isn’t sufficient when a budding entrepreneur wants to open a bowling alley, laundromat, car lot, restaurant, motel or any number of other businesses, says Elijah McCoy, CEO of McCoy Brokerage Service (www.mccoybrokerageservice.com).

“That means they need to buy, rent or renovate property, and purchase equipment,” McCoy says. “That also means they are going to need the capital to turn their entrepreneurial dream into an entrepreneurial reality.”

But securing that capital is not always easy. Entrepreneurs who want to launch a small business, or small businesses that want to expand, often find that lenders are reluctant to provide the cash they need to make their vision happen, McCoy says.

Yet the need is growing. Since the pandemic, the number of people who feel the urge to start a business has increased dramatically. The U.S. Census Bureau reported that 5.4 million new business applications were filed in 2021, up from 4.4 million in 2020.

Many of those people were part of the Great Resignation, the movement among millions of Americans to quit their jobs and refocus their lives. In numerous cases, that refocusing involved people who longed to be their own boss. But as McCoy points out, being your own boss also means taking on responsibility for overhead expenses – possibly including real estate – that someone else handles when you are an employee.

“Sometimes business owners or would-be business owners go to lenders and they think they have a great idea,” he says, “but for whatever reason the lender rejects their application.”

The key is to not give up, he says. If one lender says no, it’s time to find another one.

“There are options out there,” McCoy says. “You just have to persevere until you find the right match.”

Some of those options include:

Conventional loans. A conventional loan for a business is somewhat similar to a personal loan. Banks, credit unions and other financial institutions offer them and, just as with a personal loan, the business borrows a lump sum and repays it over time, along with interest and fees. With conventional loans, though, borrowers may face more stringent requirements to qualify than with some other types of loans.

Small Business Administration loans. The Small Business Administration is a government agency that partners with private lenders to provide loans to businesses. McCoy says this can be a good option for businesses unable to secure a conventional loan, but certain requirements still must be met to qualify. In fiscal year 2021, the Small Business Administration provided 61,000 loans totaling $44.8 billion to small businesses.

Hard money loans. A hard money loan usually isn’t the first option when someone is seeking to purchase real estate for a business, but these loans do have advantages, McCoy says. The loans typically are based more on the value of the property than the creditworthiness of the borrower, and the closing can happen much more quickly – sometimes within 48 hours of the appraisal review. Unlike with conventional loans or SBA loans, hard-money lenders usually are private individuals or companies, as opposed to a bank or credit union.

“When you are seeking a loan for your business, it’s a good idea to shop around,” McCoy says. “You want to get the best deal possible for what you are trying to accomplish, and it’s all the better if you can find and work with someone who understands your needs. Ultimately, you want to match your objectives with the most appropriate lender in the most timely manner.”

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Elijah McCoy is CEO of McCoy Brokerage Service (www.mccoybrokerageservice.com), a company he founded in 2006. McCoy’s firm works with businesses throughout the country that are trying to secure financing. Much of McCoy’s clientele is in healthcare, such as doctors, dentists and pharmacists, but he also has worked with a broad range of people in other industries. He is a certified commercial loan expert and financial consultant.

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Archives, Global Logistics, Global Trade Daily, Software

Breaking Down Barriers between E-commerce and In-Store Marketing Channels

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Is your business still talking in terms of e-commerce and brick-and-mortar marketing and sales? Questioning investment in digital? Worried about e-commerce cannibalizing in-store sales?If so, you’re not alone—but it’s time to start looking at the purchase pathway more holistically. This is because e-commerce and brick-and-mortar sales can blend, and it can be difficult to separate the marketing strategy and levers that ultimately drive them.

Instead, it’s smart to take a step back and realize these blurred lines are part of the same overall goal: increasing sales. We can embrace them with a new strategy in which digital marketing influences all sales, regardless of where they take place.

How shopping is changing
You already know that the COVID era has accelerated a shift to digital-first shopping and buying that was a long time in coming. Embracing a new paradigm starts with understanding that digital plays a role in almost every purchase, whether at the research, comparison, or transaction stage.

Recent data and research bear this out. Retail e-commerce sales are on track to hit over $900 billion this year, an increase of nearly 14% over the already-hot market growth of 2020. Smaller retailers are likely to see higher conversion rates than the giants like Amazon, Wal-Mart, and Target. And, even if you’re a bit slower to the party, it isn’t too late by any measure: by 2023, e-commerce sales are forecast to climb from 13% to 22% of all purchases.

The biggest players in e-commerce are embracing the idea that digital marketing drives both online and in-store purchases. According to research by The Digital Shelf Institute, advertising on retailer sites has a halo effect, driving sales on other platforms and in other channels, such as brick and mortar. In fact, this halo may be as high as $3 to $7 for every $1 spent in digital advertising on Amazon.

Insight into sales channels
So, with proof that digital is influencing sales in all channels, let’s look at the next challenge: breaking down internal barriers. Digital and brick-and-mortar teams have traditionally been siloed—and sometimes even in competition for the same finite resources—but this can (and should) change.

The lever for change is access to insights from business intelligence. This is an area where many marketers struggle, but it’s make-or-break stakes for brands, especially considering how volatile the consumer market is.

For CPG and e-commerce marketers ready to level up their business intelligence insight, Line Item is a lifeline to more profitable e-commerce. This performance analytics platform gives marketers a single tool for insights into what’s working for brands—and what’s holding them back. This includes:

-Insight to optimize SEO strategy and search results

-Ability to identify new or unknown competitors

-Attribute-level insight to understand what drives value

-Ability to monitor third-party activity and pricing

-Visibility into gaps in content, imagery, or product descriptions that might be hurting rankings and much more

With detailed insight via a single platform, Line Item can enable a new, BI-driven approach to marketing that embraces digital marketing as critical to every purchase pathway.

How to embrace a digitally influenced strategy
Let’s get into the details to demonstrate how embracing a digitally influenced strategy empowered by Line Item can change how you resource your marketing—and determine success.

Consider how online and digital initiatives can ultimately influence all purchases. For example, research from GE Capital has revealed that 81% of shoppers start their research online. This means that your SEO campaigns, page rankings, and online product content really matter. If they’re not putting you on page one for organic and paid rankings, you’re missing out—and that’s going to affect in-store sales as well as online purchases. This is where Line Item can really make a difference, with insight into how your campaigns are performing, if you’re getting your share of page one, and if there are gaps in descriptions that are affecting consistency (which will affect your rankings).

Think about what gaps in your tools and resources might be holding your brand back. Do you know how your campaigns are performing, and if they’re profitable? If out-of-stocks are hurting your revenue? If your reviews are hurting your reputation and your sales? Insight into these drivers is critical in helping you boost your marketing return on investment. Line Item gives you the kind of smart insights to drive more sales.

Some of the biggest giants in e-commerce are recognizing the power of digital in influencing their sales and are adopting an omnichannel strategy. We think it’s most powerful when this omnichannel approach is also underpinned by the power of Line Item, with detailed insight into e-analytics and what’s driving your sales. Learn how Line Item can be your lifeline to more profitable e-commerce—and more sales in any channel.

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Archives, Global Trade Daily

The Future of Contech

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As a “bricks and mortar” industry heavily reliant on equipment, machinery, and a hands-on workforce, the construction sector has been slow to integrate technology. From 1947 – 2010, productivity in construction was at a plateau. But other industries, such as manufacturing and agriculture, were quick to embrace technological advancements and experienced massive increases in productivity. In recent years construction technology is finally having its insurgence.

Construction technology is reshaping the industry, helping meet deadlines, keeping project costs to a minimum, and ensuring worker safety in hazardous environments. It is possible that these new advancements are just what is needed to help manufacturers, distributors, and retailers mitigate the supply chain crisis.

Investment in Contech

By October 2021, U.S. construction technology investor funding reached a record-breaking $2.1 billion, more than a 100% increase from 2020. Crunchbase, an investment information platform, collected Construction Dive analysis data and found that this year early-stage funding in construction technology increased close to 100% from 2020, while late-stage funding jumped more than 150% percent in that same time. This means that early-stage funding in 2021 reached $738.3 million, while late-stage funding increased to $1.1 billion in the United States alone.

Henry D’Esposito, construction research lead at JLL, explained these record-breaking numbers, “Basically two or three years’ worth of construction tech adoption got squeezed into the nine months post-pandemic because everyone was shifting to being offsite, socially distancing and virtual tools.”

Current Contech Innovations

Introducing new technology to the construction field will benefit the entire construction value chain by increasing efficiency. And using big data and artificial intelligence throughout the design and construction process can transform the building sector. As well as help provide sustainable, and affordable housing.

Examples of technology implemented in the field include innovations such as handheld scanning devices. Scanning devices are not only easy to use, but significantly cut costs, and don’t require specialist knowledge or experience to carry out an accurate and highly detailed scan. Other technological advancements in the field include last-mile delivery platforms, digital marketplaces, and planning tools.

Startups, such as GoFor, Voyage Control, and Soil Connect, work to bring innovation to construction technology. Digital technology, like artificial intelligence, robotics, and the Internet of Things, have improved construction design and production. The internet of Things refers to physical objects such as scanners that are embedded with sensors and software that can connect with other devices and exchange data over the internet.

How Contech Can Help Solve the Supply Chain Crisis

The digital transformation of the field is emerging as a powerful tool to help construction contractors to overcome supply chain disruptions and material procurement. Greg Leung, the CEO of Connect Homes, a California-based builder delivering high-tech housing solutions, says that technology strongly impacts the global supply chain.

Peter Jackson, CFO of national distributor Builders FirstSource told Forbes that its manufacturing has increased 50% since the beginning of the year as builders look for ways to take time out of the build cycle with prefabricated solutions. Prefabricated, or Prefab, construction that is powered by digital technology can help safely create sustainable, high-quality housing at speed. Prefab houses are innovatively assembled from components such as walls and roofs that are produced in factories and delivered to the site for assembly. This makes building houses cheaper and more efficient.

Builders FirstSource is actively expanding manufacturing facilities across the country and signing new ones with regularity now, providing open-ended truss systems, roof trusses, wall panels, and other products that take work off the job site for more efficiency. Builders FirstSource also is experimenting with robotics for a more automated process. In 2019, the company acquired Raney Construction, an innovative offsite construction company that reduces time and labor in the home building process.

To mitigate the supply chain crisis, manufacturers, distributors, and retailers must embrace technological advancements in the construction field. The future of Contech is exciting and innovative, with operational benefits to boot. Investments in Contech are growing exponentially with no signs of stopping.

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Archives, Global Logistics, Global Trade Daily, Special Reports

5 Key Retail Industry Trends for 2022

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2021 was a year of adjustments in which the economy slowly recovered from the outbreak of the Covid-19 epidemic, a year that many believed would mean a return to normalcy, but the new Omicron variant rocked the world once again as a fresh reminder that, no, Covid has not gone away yet.

What do the next twelve months have in store for us? In 2022, we will continue to reshape the world with one thing in mind: to build our new reality… A direction that major retailers and brands were already beginning to move towards by reorganizing their channels and resources.

Looking to the future, Alfredo Pérez, International Business Development Manager at Tiendeo, explains the trends and tools that will be used by retail sector leaders and professionals, derived from his Hot Retail Trends 2022 study*.

1. Increased focus on e-commerce and digital channels

Changes in shopping habits have led to the digital channel becoming the preferred means of connecting with consumers. According to statistics, digital marketing (83%), social networks (73%) and e-commerce (63%) are positioned as the most relevant media for marketers in Latin America. The leading role that e-commerce is playing in the region is evident, 7 points higher than the international average.

In fact, in pursuit of ensuring greater traceability of campaigns, content personalization and automation strategies, retailers and brands have opted to implement the digital transformation of the consumer industry, encouraging constant interaction with the customer in both online and offline channels, resulting in 57% of marketers favoring digital channels while 41% lean towards offline channels.

2. Long live social shopping!

With 64% of the world’s population shopping via social media1, marketers are clear on where they are going to spend their advertising dollars. According to the Tiendeo study, 58% of retail executives will increase their advertising spend on social media in the next 12 months.

Although social shopping is a well-established trend in other parts of the world, this year the retail sector in Latin America will exploit the benefits of social shopping to the fullest. Accenture estimates that by 2025 the largest volume of sales in this channel will be in clothing (18%), electronics (13%) and home (7%).

3. Customer experience above all else

The main challenge facing retailers today is to identify the right time and channels to engage with both potential and repeat customers in order to offer them a seamless and frictionless shopping experience.

According to the Hot Retail Trends 2022 study, for 44% of marketing professionals, user experience is the most important aspect to consider in their strategy. Under this premise, retail is developing multi-touch strategies such as ROPO (Research Online and Purchase Offline) so that the consumer can have different alternatives and conversion points when shopping, whether on the web, e-commerce, or in the physical store.

4. More innovative stores

Digital mannequins that learn about your favorite items and guide you through the aisles, cashierless self-checkout stores, smart shelves that verify product availability or virtual try-on sessions, yes, these are the stores of the future.

Perez adds “With the incorporation of breakthrough technology (augmented reality, artificial intelligence, etc.) throughout the sales process, we will see increasingly autonomous stores that allow consumers to find what they are looking for almost instantly, receive the immediate attention they need, try it before buying it and also (why not) pay for it quickly, making a simple purchase a multi-sensory brand experience”. Retailers such as Walmart and Carrefour have already taken the plunge into this new way of interacting with customers in order to compete with the e-commerce giants.

5. Focus on the circular economy 

Customer concern for the environment has led retailers to reassess their strategies to be more environmentally conscious in order to find a balance between economic growth and sustainability.

In sustainable practices such as the Circular Economy where production cycles are closed to make the most of natural resources, the role played by digital tools is key. In 2021 many retailers began to implement more sustainable marketing actions with the digitization of the promotional catalog, long considered the key to generating brand awareness. This type of model favors the reduction of industrial waste by up to 80%.

Thus, industry professionals will step up their investment in digital advertising to communicate with customers, and this year digital channels will account for 86% of budget allocations, while offline media (outdoor advertising, catalogs, etc.) will account for 14%. 

*Study conducted in EMEA and LATAM based on the opinion of 358 directors and brand managers in the consumer sector in multiple categories (supermarkets, home, fashion, electronics, beauty, toys, DIY, pets, sports, health and travel) between November 8, 2021 and December 13, 2021.

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Archives, Global Logistics, Global Trade Daily, Warehousing

LET’S GET SMALL: WHY MICRO FULFILLMENT IS SO BIG RIGHT NOW

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It’s almost hard to believe that two years have passed since the onset of the COVID-19 pandemic and its merciless impacts on the supply chain, consumer behavior and how the world conducts business as usual. There is really nothing “usual” about conducting business nowadays, particularly for fulfillment operations in a myriad of sectors now saturating the e-commerce market. 

The fact of the matter is that e-commerce is no longer just thought of for a holiday list or bargain deal that cannot be found in traditional brick-and-mortar shops. E-commerce is becoming more of a first option for some and a permanent solution for others. Grocers, retailers, department stores and beyond are feeling the full effect of the e-commerce trend and despite the pandemic, it could very well be here to stay. 

So, how does this change the way fulfillment providers conduct operations? According to KPI Solutions’ Brittain Ladd, micro fulfillment is the key to capturing lost dollars and keeping up with demand.

“About 20% of all sales today are direct-to-consumer,” Ladd shares. “Prior to the pandemic, only about 3% of grocery sales were online. And only about 6% of all retail sales were online prior to the pandemic, so we’ve seen a massive shift. Grocery retailers and retailers of general merchandise had to change their business models to keep up with direct-to-consumer demand.”

Ladd serves as the chief supply chain and marketing officer with Kuecker Pulse Integration (KPI) in addition to his position as a Forbes Councils member. KPI Solutions is the result of an integrated partnership between Kuecker Logistics Group Inc., PULSE Integration and QC Software. Known best for bringing system integration and robotics automation to a variety of sectors, KPI Solutions approaches fulfillment operations uniquely by implementing and innovating their own software to meet demand.

“KPI Solutions has partnerships with leading robotics companies, and we can install basically any system that exists,” Ladd says. “We work with some of the largest global companies to help them automate their fulfillment and sharpen their strategy to identify more cost effective and innovative ways to meet customer demand. Consumers want more speed, especially now, and a lot of analysts are confused because they fail to realize that the goal isn’t to just deliver groceries in 10 to 15 minutes, it’s to deliver apparel, shoes, electronics and other products as well.”

So, where does micro fulfillment fit? And more importantly, how can it support fulfillment operations now and in the future? Let’s start by understanding how companies–such as grocers—a re struggling beyond the surge in e-commerce. Ladd shares that contrary to the widely held belief, grocers are suffering significantly with e-commerce, as they not only spend more to fulfill these orders, but they must keep up with the labor involved in third-party services, which further complicates the process.

Keep in mind, grocery retailers are now faced with a new wave of demand and speed. Ladd shares that companies in Europe that have entered the U.S. market, such as Buyk and Jokr, are now offering “rapid grocery delivery” in as little as 10 minutes.

“On average, grocery retailers lose anywhere from $7 to $15 on every online order they fulfill,” Ladd says. “And in some cases, they can lose as much as $25 on every online order they fulfill. Most retailers barely break even on any of their curbside pickup orders, except for the product since it’s a little higher value. 

“Imagine being a retailer who is now forced into a model where they’re having to change everything they do to meet the changing demands of consumers, but everything the consumer wants them to do the retailer loses money on. That’s the challenge.”

That’s also where micro fulfillment centers and technology can not only capture these costs but turnaround the way e-commerce fulfillment is streamlined. 

Geek+, Berkshire Grey, AutoStore, and Addverb Technologies are a few of the companies that are innovating fulfillment operations through automated robotic systems. These fully automated systems reduce the chances for human errors with mobility and capability of reaching inside inventory bins quite literally to fulfill orders. Ladd shares that most of these automated solutions cost around $1.2 million to $1.5 million with a return on investment realized within 18 to 24 months, paying for themselves while re-inventing fulfillment.

“The best way I can describe it is like holding a Rubik’s cube in front of you,” Ladd says. “Each of the cubes has some type of inventory inside and sitting on top of the Rubik’s cube are robots that go back and forth and side to side reaching down and picking up these cubes and moving them from one side to another, pulling out inventory. That’s exactly what they do as a robotic picking and fulfillment system.”

Embracing technology is what comes full circle for retailers attempting to overcome the e-commerce surge. And options such as these not only fully automate fulfillment processes but keep human involvement to a minimum. Retailers are catching on and the U.S. market is now starting to see what the European market has already adopted. In fact, Ladd shared that three European companies have recently entered New York City, and they are bringing exploding growth with them.

What makes these systems even more enticing (beyond the fact that they are fully automated) is the ability to operate after-hours–or in the dark when stores are closed. Micro fulfillment centers are intelligent enough to automate the fulfillment process, but small enough that grocery retailers can install them inside their stores–completing all of the fulfillment tasks and mileage usually completed by employees. 

“These systems are quite easy for retailers to embrace and adopt,” Ladd says. “Companies including Kroger, H-E-B, Albertson’s, Instacart and DoorDash are among the more recognized brands that are exploring these innovative options and either installing these systems or exploring how to use these systems. Make no mistake, the future of retail is robotics. Retailers that don’t embrace robotics will never be able to survive long term.”

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Brittain Ladd, chief supply chain and marketing officer with KPI Solutions, is recognized as a leading expert in business strategy, supply chain management, logistics and last-mile delivery. He was one of the first individuals to research, design and recommend that retailers install micro-fulfillment centers in their stores and chains.

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Archives, Global Logistics, Global Trade Daily, Special Reports

More Than Half of Retail Businesses are Using Inflation to Price Gouge

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As the economy recovers from the COVID-19 pandemic, inflation has surged in recent months affecting both retailers and consumers gearing up for the holidays.

In November, Digital.com surveyed 1,000 retail owners and executives to discover how inflation is impacting profitability, pricing, and discount offers this shopping season.

Our findings revealed that more than half of retail businesses are using inflation to drive up prices higher than what’s necessary to offset increased costs.

Key Findings

-56% of retail businesses say inflation has given them the ability to raise prices beyond what’s required to offset higher costs

-Over half of retailers have increased prices by 20% or more on average

-52% of businesses are offering fewer or no discounts this holiday season

-Shrinking discounts and increasing price of complementary products are most popular ways businesses are driving up prices

56% of retail businesses have increased profits beyond inflation to boost profitability

When asked how recent inflation has impacted profitability, 56% of retail businesses responded that inflation gave them the ability to raise prices beyond offsetting costs.

Large enterprises (LEs) were more likely than small and medium-sized businesses (SMBs) and small and medium-sized enterprises (SMEs) to say they were using inflation to more than offset costs at a rate of 63% compared to 52% of SMBs and 55% of SMEs.

“What’s interesting about our findings is that more than half of respondents say that while they used inflation as a reason for price increases, they expect higher profits as a result,” says Digital.com’s small business expert, Dennis Consorte.

“In other words, businesses are inflating already inflated prices in order to turn a bigger profit amid people’s fears over uncertain times.”

Automobile, e-commerce, and electronics industries most likely to hike prices

Our survey revealed that the automobile, e-commerce, and electronics and appliances industries were most likely to be capitalizing on inflation.

Of the businesses we surveyed who belonged to the automobile industry, 72% indicated they raised prices to more than offset costs. Sixty-five percent of e-commerce and 62% of electronics and appliances businesses also admitted to price gouging.

Over half of retailers have increased prices by 20% or more

Eighty-five percent of businesses have increased prices, and 55% of retailers have increased prices by 20% or more on average.

Of those who have increased prices, 28% of large enterprises increased prices 50% or more, compared to 6% of SMEs and 12% of SMBs.

When asked why they have increased prices, 66% of businesses cited rising inflation, 69% supply chain issues, and 57% increased demand.

52% of businesses are offering fewer or zero discounts this holiday season

This holiday season, 38% of businesses will offer fewer discounts than last year, and 14% will not offer any at all.

Smaller businesses are offering fewer discounts this holiday season compared to larger enterprises. Fifty-seven percent of SMBs and 56% of SMEs say they plan to offer fewer or no discounts, compared to 36% of LEs.

It comes as no surprise to Consorte that many small businesses are offering fewer discounts this year.

“Many small businesses are still recovering from lockdowns and other COVID mandates. With the Omicron variant upon us and inflation at a 30-year high, decision-makers feel uncertain about future revenue. For them, fewer discounts could be seen as a way to keep the doors open through the holiday season.”

Clothing and accessories (74%), electronics and appliances (66%), and furniture and home furnishings (57%) are the industries that are most likely to be offering fewer discounts this holiday season.

Businesses are increasing price of complementary products, shrinking discounts

Among businesses that have increased prices, 55% shrank discounts, and 48% increased the price of complementary products.

Furniture and home furnishings (51%), health and personal care (50%), clothing and accessories (50%), and electronics and appliances (45%) are the industries that are most likely to have shrunk discounts.

The industries most likely to have raised the price of complementary products include automobile (61%), building material, gardening equipment, and supplies (46%), electronics and appliances (45%), and health and personal care (43%).

Businesses are also using pricing tactics such as shrinkflation, increased surcharges, and bundling to drive up prices.

“We’re still in a period of fear and uncertainty about the economy and legislative responses to COVID-19. We can expect unusual pricing tactics for as long as this continues. Some merchants will continue to raise prices out of fear, while others will take advantage of their customers’ fears to realize higher profit margins. When the Zeitgeist of our time returns to baseline, so too will merchants in their pricing methodologies,” says Consorte.

Methodology

All data found within this report was derived from a survey commissioned by Digital.com and conducted online by survey platform Pollfish. In total, 1,000 U.S. retail business owners and executives were surveyed. Appropriate respondents were found via a screening question. To qualify for the survey, each respondent had to own a retail business or be an employed executive at a retail business. This survey was conducted on November 18, 2021. All respondents were asked to answer all questions truthfully and to the best of their abilities. For full survey results, please email julia@digital.com.

This article originally appeared here. Republished with permission. 

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Archives, Global Logistics, Trucking

Transportation Solutions for Retail Companies

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One of the most headache-inducing tasks in the retail sector is undoubtedly transport management. The increasing complexity of flows between suppliers, warehouses, stores, end customers and, of course, the inevitable returns. This can create a nightmare universe for those responsible for coordinating the transportation area, but, above all, it can open a gap through which the company’s profitability is lost surprisingly quickly.

It is normal for the retail industry to face daily fluctuations and changes in its transportation needs, and in these conditions, having an effective Transportation Management System (TMS) solution is what makes the difference between companies that can always track and manage the movement of their goods and those that continue to blindly trust that everything will go according to plan.

Transportation technology as a lever of value

As companies realize the importance of transportation and its direct impact on business results, TMS technology solutions are emerging as key tools to help improve the customer experience, increase the efficiency of their shipments to stores and reduce costs in their transportation network.

Download Our TMS Product Sheet

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A TMS facilitates route and load optimization, contract writing, order tracking and shipment notifications so that not only is uncertainty reduced, but decisions can be made and executed in real time based on available information.

Multi-collection, multi-delivery, optimization of resources in terms of volume, weight and optimal mileage are unavoidable needs for a retailer who wants to stay in the market and not be left behind. As if all these day-to-day difficulties were not enough, Covid-19 has introduced more variability, uncertainty and difficulties in planning or maintaining fixed routes, so the flexibility provided by a TMS now takes on vital importance.

Generix Group North America provides a series of solutions within our Supply Chain Hub product suite to create efficiencies across an entire supply chain. From Warehouse Management Systems (WMS) and Transportation Management Systems (TMS) to Manufacturing Execution Systems (MES) and more, software platforms can deliver a wide range of benefits that ultimately flow to the warehouse operator’s bottom line. Our solutions are in use around the world and our experience is second-to-none. We invite you to contact us to learn more.

This originally appeared here. Republished with permission. 

DTC
Archives, Global Logistics, Global Trade Daily

4 Ways DTC Brands Can Beat Supply Chain Logjams

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With the holidays fast approaching, global supply chain disruptions are threatening to cast a shadow over the peak shopping season for both brands and consumers. COVID-19 related shutdowns, production delays, rising materials costs, labor scarcity, shipping container shortages, and port congestion could all leave retailers short of products to sell, and consumers without gifts to give.

That’s troubling for both digital and traditional retailers who rely on final-quarter sales to drive their revenues. For direct-to-consumer merchants, though, it isn’t all bad news. Despite the challenges, direct-to-consumer merchants have a real opportunity to leverage their brand equity, weather the storm, and come out ahead by capitalizing on supply chain disruptions this holiday season.

That’s partly because DTC sellers have less risk exposure than marketplace merchants or real-world retailers. More than half of Amazon’s sellers, for instance, are now based in China, meaning the marketplace could be especially hard-hit. Besides global shipping issues, China is also facing widespread power shortages that could curtail manufacturing operations and leave Amazon facing tremendous shortfalls in inventory — both for Chinese sellers and for U.S. sellers that import Chinese-made products into Amazon’s FBA network.

Traditional physical retailers face similar challenges. Their geographical footprint requires a multiple-step distribution process, creating greater costs, slowing down delivery times, and heightening the potential impact of logistical logjams and labor shortages. Full-truckload shipping is especially tough, with drivers in such high demand that high schools are now training teenagers to drive 18-wheelers. Inventory shortages are also likely to be more noticeable in brick and mortar stores, where empty shelves will impact customer experience and could dissuade shoppers from entering stores in the first place.

By comparison, DTC dropshippers have a much simpler task. Like any ecommerce operation, DTC brands have significantly lower fixed operating costs than brick-and-mortar retailers. That’s especially significant when inventory runs low: if nobody has products to sell, it’s far better to be on the hook for small, manageable hosting costs than to be stuck paying a sky-high commercial lease.

Better yet, DTC brands don’t just have lower costs and less risk exposure — they also have more control over the customer experience. While marketplace sellers have little option other than to simply remove listings for out-of-stock products, and real-world retailers are left with bare shelves, DTC brands can respond more creatively — updating their websites to guide shoppers to available products, say, or reducing SKU count to create a more focused browsing experience.

This agility, combined with deeper brand equity and a more loyal fanbase, gives DTC brands a path to generating revenue and deepening customer relationships even in the face of product shortages. The best approach will vary from brand to brand, but a few key strategies include:

1. Transparency. 

Be honest with your customers. Many will have read about global supply chain issues, but they may not be aware of how acute they are or how they are impacting your brand. While consumers will get frustrated by marketplace sellers or real-world retailers that don’t have the products they’re seeking, they will tend to be more sympathetic toward DTC brands that communicate about the challenges they’re facing in purposeful and honest ways.

Start by reaching out via your customer email list — an asset most marketplace sellers and real-world retailers lack, or fail to actively maintain — and follow up with a posting on your website. Strike a forthcoming and optimistic tone, and avoid defensiveness, and you’ll find your transparency will increase your credibility with your customers.

2. Assortment 

Because DTC brands often have lower SKU counts than other retailers, the impact of a single product being out of stock can be disproportionately large. To combat this, merchants should leverage their brand equity and promote available product-adjacent and brand-extension items, such as branded merchandise or related products and accessories.

Taken to excess, this could dilute your brand — but executed tastefully and in a way that’s still aligned with your core brand, it can be an effective strategy. Bringing new temporary products to market requires some additional research and investment, but it’s also an opportunity to learn more about your customers, and potentially identify new SKUs to incorporate into your permanent product lineup.

3. Promotions

Given the likelihood of shortages and delays, try to drive engagement by running one or more promotions. Easy options include gift cards and credits, discounts for late delivery, and freebies such as accessories and merchandise. You could also offer free gift-wrapping or small personal touches such as notes of thanks to customers whose gifts arrive later than expected.

The key is to offset late delivery or other inconveniences with an elevated experience — something that marketplace merchants simply can’t offer, but that can be a great option for DTC brands shipping high-value, high-demand items.

4. Pricing 

When supply issues cause order volumes to drop or COGS to rise, the easiest way to make it up is by increasing prices. This is harder to do in marketplaces where competitors’ products are only a click away, or in brick and mortar settings where overhead is higher, but DTC  merchants with strong brand equity are better-placed to command higher prices this holiday season.

If you pursue this strategy, distribute increases across your best-selling items to reduce the effects of price elasticity, and be forthcoming about why prices are going up to preempt sticker shock and underscore your commitment to transparency. Alternatively, consider pursuing a more aggressive bundling and up-selling strategy, including tailored product recommendations and checkout up-selling, to increase AOV without increasing item price.

Control your destiny

Of course, how well these recommendations will work for you depends on your brand and your customer base. The most important thing, though, is to realize that as a direct-to-consumer brand you have far more control over your destiny than pure-play marketplace sellers and traditional retail brands.

If there was ever a time to use the strengths of the direct-to-consumer model to your advantage, it’s now. The global supply chain disruptions will undoubtedly affect sellers of all kinds this holiday season. That makes it all the more important to use every tool in your arsenal to face these challenges head on, and to leverage your brand equity to strengthen customer relationships and drive revenues in the months ahead.

_________________________________________________________________

Remington Tonar is the Chief of Staff at Cart.com, the first end-to-end ecommerce solutions provider delivering a fully integrated and owned suite of software, expert services, and infrastructure to scale businesses online.

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Archives, Commentary, Global Trade Daily

See Line Item in Action with a Live Webinar or Product Demo

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You already know that CPG e-commerce has taken a leap forward during the pandemic—and that business intelligence has become table stakes for success. This is because knowledge is power, and what you don’t know is hurting you. In such a dynamic market, you must monitor changing demand patterns and analyze the risks of CPG e-commerce without business intelligence. We’ve gone beyond analyses and caution, though, to share how the right business intelligence platform can help you sell more on Amazon and Walmart, the giants that control the retail market. And we’ve shared an overview of the good, better, and best tools for e-commerce e-analytics to show how Line Item helps CPG and e-commerce marketers master their market with insights to drive sales growth.

Now to compliment our industry-specific articles, we’re offering live webinars and product demos so you can see Line Item in action.Why watch a live webinar, or tune into an on-demand session? Simply put, a live product tour brings Line Item’s features to life in specific ways for your category or product portfolio. It’s a way for you and your colleagues to understand the power of business intelligence for your business, not just for CPG and e-commerce in general (though of course, that’s important, too).
Here are four reasons to join us for a live Line Item webinar or product demo.#1: Understand value through product attributes.
Line Item’s deep insight into product attributes is what sets it apart from other analytics platforms. With a single tool built specifically for CPG and e-commerce, marketers can improve performance and profitability by understanding exactly what’s driving value. Line Item’s proprietary AI engine can calculate attributes for every item, even across hundreds of items in a category. These include form (like liquid or powder), size, flavor, and packaging (like pouch, box, and more).With a live product demo, you can see how Line Item enables visibility into this granular detail for business intelligence that powers better decision-making. See when competitors are coming out with new items that could threaten your sales. Detect new attributes that drive value. Know what consumers value about your product and your brand.

#2: Learn how to truly optimize your search results.
Search results matter. They can make or break whether your product makes it into customers’ carts, in-store or online. There can be many reasons why your product isn’t getting its share of page one, but if you don’t know them, you can’t address them with a fix. And it’s not enough to look at them as separate. A smart and successful digital strategy is built and optimized across all selling platforms. You need to know if your e-commerce SEO is working across all sites and all search terms.

In a webinar, you can understand the power of Line Item in optimizing SEO strategy across all keywords, retailer websites, and online marketplaces. Line Item provides insight into how your brands and items are ranking and analyzes page share, rank by item, brand, form, and other attributes. You can also ask questions specific to your brand or category on SEO strategy and how Line Item powers it.

#3: Discover how to drive sales with smarter insights.
How do you know if your promotions are performing? Which search terms are working across all retailers and platforms? Which keywords are worth investing in? This level of detail is where the battle for the digital shelf is won, but it’s impossible to access without deep insight. And it’s not actionable without the kind of visibility into your e-analytics that Line Item enables. This is just one example of how smarter insights can drive sales growth in the fiercely competitive e-commerce market.

Here are some others. Are your out-of-stocks hurting revenue? Are they giving competitors the edge if you don’t maintain inventory on Amazon? Optimizing inventory is enough of a challenge without having to second-guess your strategy. Line Item gives you the insights to understand how inventory is affecting your sales and ultimately your profitability. A webinar or live demo can show you how Line Item can be a game-changer for your e-commerce portfolio.

#4: Level up your ability to monitor third-party activity.
Amazon may be the world’s biggest marketplace, but it’s also the world’s most competitive. Keeping tabs on authorized and unauthorized third-party activity is key to success on the platform, but it can be complex even with the right tools. Unless, that is, you’re using Line Item. In a webinar or live product demo, you can see how a deep dive with Line Item can reveal when an unauthorized third-party seller starts selling your product online. With Line Item, you can understand when your items are priced correctly as well as when competitors or third-party sellers are undercutting your price. From pricing to competitor activity, see how Line Item can help you understand more about your market.

Actions speak louder than words. Join us for an upcoming webinar or request a live product demo to see how Line Item can transform your CPG e-commerce. You’ll understand why Line Item is your best option for mastering your market. It’s a single platform with comprehensive capabilities purpose-built for CPG e-commerce. In today’s competitive and uncertain e-commerce market, Line Item is your lifeline to more profitable e-commerce.