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Amazon’s one-two punch: How traditional retailers can fight back

Posted by on Apr 18, 2019 in 6 River Systems, Amazon, Artificial Intelligence, Column, E-Commerce, eCommerce, getvu, IBM, jeff bezos, Kiva Systems, locus robotics, magazino, merchandising, online retail, online shopping, physical retail, Retail, retailers, siemens, TC, whole foods | 0 comments

If you think physical retail is dead, you couldn’t be more wrong. Despite the explosion in e-commerce, we’re still buying plenty of stuff in offline stores. In 2017, U.S. retail sales totaled $3.49 trillion, of which only 13 percent (about $435 billion) were e-commerce sales. True, e-commerce is growing at a much faster annual pace. But we’re still very far from the tipping point.

Amazon, the e-commerce giant, is playing an even longer game than everyone thinks. The company already dominates online retail — Amazon accounted for almost 50 percent of all U.S. e-commerce dollars spent in 2018. But now Amazon is eyeing the much bigger prize: modernizing and dominating retail sales in physical locations, mainly through the use of sophisticated data analysis. The recent reports of Amazon launching its own chain of grocery stores in several U.S. cities — separate from its recent Whole Foods acquisition — is just one example of how this could play out.

You can think of this as the Amazon one-two punch: The company’s vast power in e-commerce is only the initial, quick jab to an opponent’s face. Data-focused innovations in offline retail will be Amazon’s second, much heavier cross. Traditional retailers too focused on the jab aren’t seeing the cross coming. But we think canny retailers can fight back — and avoid getting KO’d. Here’s how.

The e-commerce jab starts with warehousing

Physical storage of goods has long been crucial to advances in commerce. Innovations here range from Henry Ford’s conveyor belt assembly line in 1910, to IBM’s universal product code (the “barcode”) in the early 1970s, to J.C. Penney’s implementation of the first warehouse management system in 1975. Intelligrated (Honeywell), Dematic (KION), Unitronics, Siemens and others further optimized and modernized the traditional warehouse. But then came Amazon.

After expanding from books to a multi-product offering, Amazon Prime launched in 2005. Then, the company’s operational focus turned to enabling scalable two-day shipping. With hundreds of millions of product SKUs, the challenge was how to get your pocket 3-layer suture pad (to cite a super-specific product Amazon now sells) from the back of the warehouse and into the shippers’ hands as quickly as possible.

Make no mistake: Amazon’s one-two retail punch will be formidable.

Amazon met this challenge at a time when automated warehouses still had massive physical footprints and capital-intensive costs. Amazon bought Kiva Systems in 2012, which ushered in the era of Autonomous Guided Vehicles (AGVs), or robots that quickly ferried products from the warehouse’s depths to static human packers.

Since the Kiva acquisition, retailers have scrambled to adopt technology to match Amazon’s warehouse efficiencies.  These technologies range from warehouse management software (made by LogFire, acquired by Oracle; other companies here include Fishbowl and Temando) to warehouse robotics (Locus Robotics, 6 River Systems, Magazino). Some of these companies’ technologies even incorporate wearables (e.g. ProGlove, GetVu) for warehouse workers. We’ve also seen more general-purpose projects in this area, such as Google Robotics. The main adopters of these new technologies are those companies that feel Amazon’s burn most harshly, namely operators of fulfillment centers serving e-commerce.

The schematic below gives a broad picture of their operations and a partial list of warehouse/inventory management technologies they can adopt:

It’s impossible to say what optimizations Amazon will bring to warehousing beyond these, but that may be less important to predict than retailers realize.

The cross: Modernizing the physical retail environment

Amazon has made several recent forays into offline shopping. These range from Amazon Books (physical book stores), Amazon Go (fast retail where consumers skip the cashier entirely) and Amazon 4-Star (stores featuring only products ranked four-stars or higher). Amazon Live is even bringing brick-and-mortar-style shopping streaming to your phone with a home-shopping concept à la QVC. Perhaps most prominently, Amazon’s 2017 purchase of Whole Foods gave the company an entrée into grocery shopping and a nationwide chain of physical stores.

Most retail-watchers have dismissed these projects as dabbling, or — in the case of Whole Foods — focused too narrowly on a particular vertical. But we think they’re missing Bezos’ longer-term strategic aim. Watch that cross: Amazon is mastering how physical retail works today, so it can do offline what it already does incredibly well online, which is harness data to help retailers sell much more intelligently. Amazon recognizes certain products lend themselves better to offline shopping — groceries and children’s clothing are just a few examples.

How can traditional retailers fight back? Get more proactive.

Those shopping experiences are unlikely to disappear. But traditional retailers (and Amazon offline) can understand much, much more about the data points between shopping and purchase. Which path did shoppers take through the store? Which products did they touch and which did they put into a cart? Which items did they try on, and which products did they abandon? Did they ask for different sizes? How does product location within the store influence consumers’ willingness to buy? What product correlations can inform timely marketing offers — for instance, if women often buy hats and sunglasses together in springtime, can a well-timed coupon prompt an additional purchase? Amazon already knows answers to most of these questions online. They want to bring that same intelligence to offline retail.

Obviously, customer privacy will be a crucial concern in this brave new future. But customers have come to expect online data-tracking and now often welcome the more informed recommendations and the convenience this data can bring. Why couldn’t a similar mindset-shift happen in offline retail?

How can retailers fight back?

Make no mistake: Amazon’s one-two retail punch will be formidable. But remember how important the element of surprise is. Too many venture capitalists underestimate physical retail’s importance and pooh-pooh startups focused on this sector. That’s extremely short-sighted.

Does the fact that Amazon is developing computer vision for Amazon Go mean that alternative self-checkout companies (e.g. Trigo, AiFi) are at a disadvantage? I’d argue that this validation is actually an accelerant as traditional retail struggles to keep up.

How can traditional retailers fight back? Get more proactive. Don’t wait for Amazon to show you what the next best-practice in retail should be. There’s plenty of exciting technology you can adopt today to beat Jeff Bezos to the punch. Take Relex, a Finnish startup using AI and machine learning to help brick-and-mortar and e-commerce companies make better forecasts of how products will sell. Or companies like Memomi or Mirow that are creating solutions for a more immersive and interactive offline shopping experience.

Amazon’s one-two punch strategy seems to be working. Traditional retailers are largely blinded by the behemoth’s warehousing innovations, just as they are about to be hit with an in-store innovation blow. New technologies are emerging to help traditional retail rally. The only question is whether they’ll implement the solutions fast enough to stay relevant.


Source: The Tech Crunch

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Kids on 45th just raised millions in seed funding to sell lightly used kids clothes — sight unseen

Posted by on Apr 17, 2019 in eCommerce, maveron ventures, Yes VC | 0 comments

A seemingly endless number of startups has attracted funding in recent years to make life easier for people with money to spend. They’re sold sell nice clothes, chic shoes, cool office space, on-demand car services, on-demand laundry services, on-demand cleaning services, anti-aging therapies. It goes on and on.

Overlooked in the process is the overwhelmingly majority of Americans. In 2015, the top 1 percent of U.S. made more than 25 times what families in the bottom 99 percent did, a gap that has been growing. Most families aren’t spending money on making life easier or more glamorous for themselves because they can’t afford it. More, they’re often too busy to think much about it.

There are rare exceptions to startups that cater to more affluent populations. One company that comes to mind is Propel, a New York-based startup whose app helps food stamp recipients improve their financial health. Another is Yenko, a for-profit outfit committed to improving graduation outcomes.

Now, an even newer player has entered onto the scene whose proposition makes all the sense in the world for the many harried, overworked, and budget-conscious families out there. Called Kids on 45th, the nearly two-year-old, Seattle-based startup bundles up what it describes as nearly new clothing that suits the current season, and it sends it to customers sight unseen for far less than they would pay elsewhere, and requiring a lot less of their time.

The company ties back to a Seattle consignment store of the same name that’s been up and running since 1989. Entrepreneur Elise Worthy describes it as a “cornerstone” of the local parenting community, and she would know. She decided to buy the business two year ago, not only to save it when it teetered on the brink of closure, but to better understand how she might turn it to a scalable enterprise.  She learned plenty, too, including that when moms came into the store because their children had outgrown their clothes, they weren’t looking for anything specific. “They were just trying to solve a problem. They didn’t care if it was this pair or that pair; they just needed pants.”

The observation led to a revelation that Worthy could build an online business without creating an elaborate website with photos and clothing descriptions. In fact, she decided to build an anti-browsing experience that allows a shopper to say what sizes are needed, and what types of items (coats, pants, shirts), one sentence about his her kid’s style, and that’s it. It’s highly counterintuitive for today’s e-commerce landscape. But a customer mostly clicks a few boxes, then waits for however many items were ordered to arrive. Because each item is priced at between $3 and $4, what that shopper doesn’t like, he or she can just donate.

Indeed, part of what makes Kids on 45th work as a business is that it’s saving on a lot of fronts. Aside from not creating and maintaining a sophisticated, content-rich website, the company doesn’t accept returns, which can prove a crushing expense for other e-commerce concerns. According to the National Retail Federation, return rates on clothing are close to 40 percent when the merchandise is bought online.

The startup, which is bundling clothes for newborns to kids up to age 16, also has systems in place that should enable it to scale, including an exclusive fulfillment relationship with one of the country’s few aggregators of thrift clothing. After paying for clothes that this partner deems to be in high-quality condition — it has plenty of options, thanks to the more than 20 billion pounds of clothing that Americans donate each year — Kids on 45th puts its staff of 15 stylists to work. “We optimize for the mom who is holding both her cell phone and her kid,” explains Worthy. “We want her to be able to check out in less than two minutes, then hand over that hunting experience to us.”

Kids on 45th has a few other things going for it, as well. First, it doesn’t charge on a subscription basis, unlike some other startups boxing up kids’ clothing, like Rockets of Awesome and Kidbox, and it insists that it doesn’t need to. “We don’t want to trap moms,” says Worthy. “We’ll send them reminder emails,” she says, and they come right back. “Our retention is on a par with companies that charge subscriptions. Moms return at the same rate on their own.”

The idea of ordering bundles of kids clothing is also catching on fast. Just yesterday, Walmart announced that it’s partnering with Kidbox to enable shoppers to purchase up to six different boxes from Walmart each year. Each will include four to five items and cost $48, said the company. That’s roughly the same average order size at Kids on 45th, says Worthy — though the startup sends off between 12 to 15 items for the same amount.

Not last, while Kids on 45th is decidedly unflashy, it’s capitalizing on one of of the biggest trends in the world right now: growing awareness about landfills throughout the U.S. that are teeming with textiles that could easily be recycled, if only there were more places for it to go.

Certainly, the young company has momentum. It says has already shipped more than half a million items just a year after launching its online business. It also just raised $3.3 million in seed funding. Its backers include Yes VC, Maveron, SoGal Ventures, Sesame Street Ventures & Collaborative Fund, Liquid 2 VC, and Brand Foundry Ventures. No doubt they’re looking for returns, as VCs do. But it’s also an investment about which they can feel good. After all, if Kids on 45th can intercept more of the lightly used goods in the world and put them to smart use, more power to it.


Source: The Tech Crunch

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The danger of ‘I already pay for Apple News+’

Posted by on Mar 26, 2019 in Apple, apple news, Apps, eCommerce, Facebook, Media, Mobile, Opinion, TC | 0 comments

Apple doesn’t care about news, it cares about recurring revenue. That’s why publishers are crazy to jump into bed with Apple News+. They’re rendering their own subscription options unnecessary in exchange for a sliver of what Apple pays out from the mere $10 per month it charges for unlimited reading.

The unfathomable platform risk here makes Facebook’s exploitative Instant Articles program seem toothless in comparison. On Facebook, publishers became generic providers of dumb content for the social network’s smart pipe that stole the customer relationship from content creators. But at least publishers were only giving away their free content.

Apple News+ threatens to open a massive hole in news site paywalls, allowing their best premium articles to escape. Publishers hope they’ll get exposure to new audiences. But any potential new or existing direct subscriber to a publisher will no longer be willing to pay a healthy monthly fee to occasionally access that top content while supporting the rest of the newsroom. They’ll just cherry pick what they want via News+, and Apple will shave off a few cents for the publisher while owning all the data, customer relationship, and power.

“Why subscribe to that publisher? I already pay for Apple News+” should be the question haunting journalists’ nightmares. For readers, $10 per month all-you-can-eat from 300-plus publishers sounds like a great deal today. But it could accelerate the demise of some of those outlets, leaving society with fewer watchdogs and storytellers. If publishers agree to the shake hands with the devil, the dark lord will just garner more followers, making its ruinous offer more tempting.

There are so many horrifying aspects of Apple News+ for publishers, it’s best just to list each and break them down.

No relationship with the reader

To succeed, publishers need attention, data, and revenue, and Apple News+ gets in the way of all three. Readers visit Apple’s app, not the outlet’s site that gives it free rein to promote conference tickets, merchandise, research reports, and other money-makers. Publishers don’t get their Apple News+ readers’ email addresses for follow-up marketing, cookies for ad targeting and content personalization, or their credit card info to speed up future purchases.

At the bottom of articles, Apple News+ recommends posts by an outlet’s competitors. Readers end up without a publisher’s bookmark in their browser toolbar, app on their phone, or even easy access to them from News+’s default tab. They won’t see the outlet’s curation that highlights its most important content, or develop a connection with its home screen layout. They’ll miss call outs to follow individual reporters and chances to interact with innovative new interactive formats.

Perhaps worst of all, publishers will be thrown right back into the coliseum of attention. They’ll need to debase their voice and amp up the sensationalism of their headlines or risk their users straying an inch over to someone else. But they’ll have no control of how they’re surfaced…

At the mercy of the algorithm

Which outlets earn money on Apple News+ will be largely determined by what Apple decides to show in those first few curatorial slots on screen. At any time, Apple could decide it wants more visual photo-based content or less serious world news because it placates users even if they’re less informed. It could suddenly preference shorter takes because they keep people from bouncing out of the app, or more generic shallow-dives that won’t scare off casual readers who don’t even care about that outlet. What if Apple signs up a publisher’s biggest competitor and sends them all the attention, decimating the first outlet’s discovery while still exposing its top paywalled content for cheap access?

Remember when Facebook wanted to build the world’s personalized newspaper and delivered tons of referral traffic, then abruptly decided to favor “friends and family content” while leaving publishers to starve? Now outlets are giving Apple News+ the same iron grip on their businesses. They might hire a ton of talent to give Apple what it wants, only for the strategy to change. The Wall Street Journal says it’s hiring 50 staffers to make content specifically for Apple News+. Those sound like some of the most precarious jobs in the business right now.

Remember when Facebook got the WSJ, Guardian, and more to build “social reader apps” and then one day just shut off the virality and then shut down the whole platform? News+ revenue will be a drop in bucket of iPhone sales, and Apple could at any time decide it’s not thirsty any more and let News+ rot. That and the eventual realization of platform risk and loss of relationship with the reader led the majority of Facebook’s Instant Articles launch partners like the New York Times, Washington Post, and Vox to drop the format. Publishers would be wise to come to that same conclusion now before they drive any more eyeballs to News+.

News+ isn’t built for news

Apple acquired the magazine industry’s self-distribution app Texture a year ago. Now it’s trying to cram in traditional text-based news with minimal work to adapt the product. That means National Geographic and Sports Illustrated get featured billing with animated magazine covers and ways to browse the latest ‘issue’. News outlets get demoted far below, with no intuitive or productive way to skim between articles beyond swiping through a chronological stack.

I only see WSJ’s content below My Magazines, a massive At Home feature from Architectural Digest, a random Gadgets & Gear section of magazine articles, another huge call out for the new issue of The Cut plus four pieces inside of it, and one more giant look at Bloomberg’s profile of Dow Chemical. That means those magazines are likely to absorb a ton of taps and engagement time before users even make it to the WSJ, which will then only score few cents per reader.

Magazines often publish big standalone features that don’t need a ton of context. News articles are part of a continuum of information that can be laid out on a publisher’s own site where they have control but not on Apple News+. And to make articles more visually appealing, Apple strips out some of the cross-promotional recirculation, sign-up forms, and commerce opportunities depend on.

Shattered subscriptions

The whole situation feels like the music industry stumbling into the disastrous iTunes download era. Musicians earned solid revenue when someone bought their whole physical album for $16 to listen to the single, then fell in love with the other songs and ended up buying merchandise or concert tickets. Then suddenly, fans could just buy the digital single for $0.99 from iTunes, form a bond with Apple instead of the artist, and the whole music business fell into a depression.

Apple News+’s onerous revenue sharing deal puts publishers in the same pickle. That occasional flagship article that’s a breakout success no longer serves as a tentpole for the rest of the subscription.

Formerly, people would need to pay $30 per month for a WSJ subscription to read that article, with the price covering the research, reporting, and production of the whole newspaper. Readers felt justified paying the price since the got access to the other content, and the WSJ got to keep all the money even if people didn’t read much else or declined to even visit during the month. Now someone can pop in, read the WSJ’s best or most resource-intensive article, and the publisher effectively gets paid a la carte like with an iTunes single. Publishers will be scrounging for a cut of readers’ $10 per month, which will reportedly be divided in half by Apple’s oppressive 50 percent cut, then split between all the publishers someone reads — which will be heavily skewed towards the magazines that get the spotlight.

I’ve already had friends ask why they should keep paying if most of the WSJ is in Apple News along with tons of other publishers for a third of the price. Hardcore business news addicts that want unlimited access to the finance content that’s only available for three days in Apple News+ might keep their WSJ subscription. But anyone just in it for the highlights is likely to stop paying WSJ directly or never start.

I’m personally concerned because TechCrunch has agreed to put its new Extra Crunch $15 per month subscription content inside Apple News+ despite all the warning signs. We’re saving some perks like access to conference calls just for direct Extra Crunch subscribers, and perhaps a taste of EC’s written content might convince people they want the bonus features. But even more likely seems the possibility that readers would balk at paying again for just some extra perks when they already get the rest from Apple News, and many newsrooms aren’t set up to do anything but write articles.

It’s the “good enough” strategy we see across tech products playing out in news. When Instagram first launched Stories, it lacked a ton of Snapchat’s features, but it was good enough and conveniently located where people already spent their time and had their social graph. Snapchat didn’t suddenly lose all its users, but there was little reason for new users to sign up and growth plummetted.

Apple News is pre-loaded on your device, where you already have a credit card set up, and it’s bundled with lots of content, at a cheaper price that most individual news outlets. Even if it doesn’t offer unlimited, permanent access to every WSJ Pro story, Apple News+ will be good enough. And it gets better with each outlet that allies with this Borg.

But this time, good enough won’t just determine which tech giant wins. Apple News+ could decimate the revenue of a fundamental pillar of society we rely on to hold the powerful accountable. Yet to the journalists that surrender their content, Apple will have no accountability.


Source: The Tech Crunch

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Flipkart ranked highly for ‘fairness’ of working conditions in India gig platform study

Posted by on Mar 26, 2019 in Apps, Asia, business models, Deliveroo, eCommerce, Europe, Flipkart, Germany, gig economy, India, Ola, online platforms, Oxford Internet Institute, South Africa, TC, Uber, United Kingdom, university of Manchester, workers rights | 0 comments

The Oxford Internet Institute has published what it bills as the world’s first rating system for working conditions on gig economy platforms.

The Fairwork academic research project is a collaboration with the International Institute of Information Technology Bangalore, the University of Cape Town, the University of Manchester, and the University of the Western Cape.

As the name suggests, the project focuses on conditions for workers who are being remotely managed by online platforms and their algorithms — creating a framework to score tech firms on factors like whether they pay gig economy workers the minimum wage and ensure their health and safety at work.

The two initial markets selected for piloting the rating system are India and South Africa, and the first batch of gig economy firms ranked includes a mix of delivery, ride-hailing and freelance work platforms, among others.

The plan is to update the rating yearly, and to also add gig economy platforms operating in the UK and Germany next year.

Fairness, rated

Fairwork’s gig platform scoring system measures performance per market across five standards — which are neatly condensed as: Fair pay, fair conditions, fair contracts, fair management, and fair representation.

Platforms are scored on each performance measure with a basic point and an advanced point, culminating in an overall score. (There’s more on the scoring methodology here.)

Most of the measures are self explanatory but the emphasis on fair contracts is for T&Cs to be “transparent, concise, and provided to workers in an accessible form”, with the contacting party subject to local law and identified in the contract.

While, in instances of what those behind the project dub “genuine” self-employment, terms of service must be free of clauses that “unreasonably exclude liability” on the part of the platform.

For fair management, a good rating demands a documented process and clear channel of communication through which workers can be heard; decisions can be appealed; and workers be informed of the reasons behind the decisions.

The use of any decision-making algorithms must also be transparent and result in “equitable outcomes for workers”. And there must also be identified and document policy to ensure equity in areas such as hiring and firing, while any data collection must be documented with a clear purpose and explicit informed consent.

Fair representation calls for platforms to allow workers to organize in collective bodies regardless of their employment status and be prepared to negotiate and co-operate with them.

Critical attention

Criticism of the so called ‘gig economy’ has dialled up in recent years, in Western markets especially, as the ‘flexible’ working claims platforms trumpet have attracted closer and more critical scrutiny.

Policymakers are acting on concerns that demand for casual labor is being exploited by increasingly powerful tech firms which are applying algorithms at scale while using self-serving employment classifications designed to workaround traditional labor rights so they can micromanage large-scale workforces remotely while sidestepping the costs of actually employing so many people.

Trenchant critics liken the result to a kind of modern day slavery — arguing that rights-denuded platform workers are part of a wider beaten down ‘precariat’.

A report last year by a UK MP was more nuanced but still likened the casual labor practices on UK startup Deliveroo’s food delivery platform to the kind of dual market seen in 20th century dockyards, suggesting that while the platform could work well for some gigging riders this was at the exploitative expense of others who were not preferred for jobs in the same way — with a risk of unpredictable and unstable earnings. 

In recent years a number of unions have stepped up activity to support contract and casual workers used by the sector, as the number of platform workers has grown. Even as gig platforms have generally continued to deny granting collective bargaining to their ‘self-employed’ workers.

Against this backdrop there have also been a number of wildcat style ‘strikes’ by gig economy workers in the UK triggered by sudden changes to pricing policies and/or conditions, or focused more broadly on trying to move the needle on pay and working conditions.

A UK union-backed attempt to use European human rights law to challenge Deliveroo’s refusal to grant collective bargaining rights for couriers was dismissed by the High Court at the end of last year. Though the union vowed to appeal.

Regardless of that particular set-back, pressure from policymakers and the publicity from legal challenges attached to workers rights have yielded a number of improvements for gig workers in Europe, with — for example — Uber announcing it would expand free insurance products for drivers across much of the region last year. And it’s clear that scrutiny of platforms is an important lever for improving conditions for workers.

It’s with that in mind that the researchers behind Fairwork have launched their rating system.

“The Fairwork rating system shines a light on best and worst practice in the platform economy,” said Mark Graham, professor of Internet geography at the University of Oxford, commenting in a statement. “This is an area in which for too long, very few regulations have been in place to protect workers. These ratings will enable consumers to make informed choices about the platforms and services they need when ordering a cab, a takeaway or outsourcing a simple task.”

“Our hope is that our five areas of fairness will take a life of their own, and that workers, platforms and other advocates will start using them to improve the working conditions across the platform economy,” he added.

And now to those first year scores in India and South Africa…

Best and worst performers

In India, ecommerce giant Flipkart came out on top of the companies ranked, with its delivery and logistics arm eKart scoring 7/10.

Though — if it wants to get a perfect 10 — it’s still got work to do on contracts, to improve clarity and ensure they reflect the true nature of the relationship, according to the researchers’ assessment.

Flipkart also does not recognize a body that could support collective bargaining for its workers.

Three tech platforms shared the wooden spoon for the worst conditions for Indian gig workers, according to the researchers’ assessment — namely: Food delivery platform Foodpanda and ride-hailing giants Ola and Uber which scored just 2/10 apiece, fulfilling only the minimum wage criteria and failing on every other measure.

UberEats, Uber’s food delivery operation, did slightly better — scoring 3/10 in India, thanks to also offering a due process for decisions affecting workers.

While in South Africa the top scorer was white collar work platform NoSweat, which got 8/10. On the improvements front, it also could do a little more work to make its contracts fairer, and also doesn’t recognize collective bargaining.

Bottom of the list in the country is ride-hailing firm Bolt (Taxify) — which scored 4/10, hitting targets on pay and some conditions (mitigating task-specific risks), while also offering a due process for decisions affecting workers, but failing on other performance measures.

Uber didn’t do much better in South Africa either — coming in second to last, with 5/10. Though it’s notable the company does offer more protections for workers there vs those grafting on its platform in India, including mitigating task-specific risks and actively seeking to improve conditions (such as by offering insurance).

Reached for comment on its Fairwork ratings, an Uber spokesperson sent this statement:

Uber wouldn’t be what it is without drivers — they are at the heart of the Uber experience. Over the past years we have made a number of changes to offer a better experience with more support and more protection, including our Partner Injury Protection programme, new safety features and access to quality and affordable private healthcare coverage for driver-partners and their families. We will continue to work hard to earn our partners trust and ensure that their voices are heard as we take Uber forward together.

There’s clearly no one universal standard for Uber’s business where working conditions are concerned. Instead the company tunes its standard to the local regulatory climate — offering workers less where it believes it can get away with it.

That too suggests a stronger spotlight on conditions offered by gig economy platforms can help improve workers’ lot and raise standards globally.

On the improvements front the Fairwork researchers claim the project has already led to positive impacts in the two pilot markets — claiming discussions are “ongoing” with platforms in India about implementing changes in line with the principles, including with a platform that has some 450,000 workers.

Though they also point out the first-year ranking show the overwhelming majority of India’s platform workers are engaged on platforms that score below their Fairwork basic standards (with scores <5/10) — which covers more than a million gig economy workers.

In South Africa another positive development they point to is alcohol delivery platform Bottles committing to supporting the emergence of fair workers’ representation on its platform, after collaborating with the project.

The local NoSweat freelance work platform has also introduced what the researchers couch as “significant changes” in all five areas of fairness — now having a formal policy to pay over the minimum wage after workers’ costs are taken into account; a clear process to ensure clients on the platform agree to protect workers’ health and safety; and a channel and process for workers to lodge grievance about conditions.

Commenting in a statement, Wilfred Greyling, co-founder of NoSweat said the project had helped the company “formalise” the principles and incorporate them into its systems. “NoSweat Work believes firmly in a fair deal for all parties involved in any work we put out,” he said, adding that the platform is “built on people and relationships; we never hide behind faceless technology”.

This report was updated with comment from Uber


Source: The Tech Crunch

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Wayfair to open its first brick-and-mortar store this fall

Posted by on Mar 26, 2019 in E-Commerce, eCommerce, merchandising, omnichannel, online shopping, Retail, Wayfair | 0 comments

Another major e-commerce brand its expanding its business offline. Wayfair, the Boston-based online furniture retailer whose net revenue topped $2 billion in the fourth quarter, announced this morning it plans to open its first full-service retail store this fall. The store, which will be based in Natick, Mass., will connect the company’s online business to the real world, allowing customers to meet with home design experts, try out the furniture in person and order home delivery of both in-store products and those from Wayfair’s website.

The company had previously operated pop-up shops in Natick, Mass. and Paramus, N.J., and it recently opened an outlet connected to its Florence, Ky. warehouse. However, these are not equivalent to the store it now has planned. But Wayfair will open four other pop-ups this summer, at yet to be announced locations, that will offer curated selections of merchandise.

The larger retail store will be located in the Natick Mall in Natick, Mass. — the same place where Wayfair ran its holiday 2018 pop-up.

Like most other furniture retailers, the new store will offer customers design assistance through complimentary consultations, where the experts may suggest recommendations ranging from home improvement projects to décor selections.

The shoppers will be able to order from the store’s product inventory, or from Wayfair’s website for home delivery.

It’s not unusual these days to see e-commerce brands pursuing an omnichannel experience, where their online site overlaps with a brick-and-mortar presence. Amazon, notably, has recently pursued this path through its Whole Foods acquisition, Amazon Books stores and Amazon Go convenience stores. Walmart and Target and other big-box retailers offer a variety of ways to shop online, pick up at the store or order home delivery with help from in-store associates.

Other e-commerce-first brands — particularly in the fashion and beauty space — also today often launch physical retail stores as a means of attracting new customers who hadn’t yet shopped their site, as well as catering to current customers through a new channel.

For example, Rent the Runway, The RealReal, Glossier, ThredUp, Allbirds, Away, ModCloth, Madison Reed and others have joined older brands like Warby Parker, Zappos and Bonobos in expanding their operations to include brick-and-mortar footprints.

While physical retail increases overhead, it does send a message to shoppers that the company is more stable than some other fly-by-night brands found only through Instagram and Facebook ads.

It also offers a way for customers to physically inspect merchandise they may not feel comfortable buying online — like clothes that require trying on for fit, makeup they want to test or — in the case of Wayfair’s furniture — a way to touch and feel the fabrics, closely inspect the build quality and visualize items alongside other design materials like fabric swatches or paint strips, for example.

“With the opening of our new retail store, we are offering our customers a new way to enjoy Wayfair’s exceptional shopping experience as we continue to transform the way people shop for their homes,” said Niraj Shah, CEO, co-founder and co-chairman, Wayfair, in a statement. “We look forward to inviting our customers further into the world of Wayfair, welcoming them to step inside our newest shopping experience guided by the knowledgeable support and expertise of our in-store design team,” Shah added.

The news comes just after Wayfair posted its biggest year-over-year revenue growth (40 percent) to date in a better than expected Q4 2018. The company also saw its active customer base jump 38 percent to 15.2 million, and orders per customer jump to 1.85 versus 1.77 in the year ago period. However, the retailer reported growing losses attributed to operating expenses, including marketing and advertising, and hiring — factors that have had some questioning the sustainability of Wayfair’s growth.

One single retail store won’t necessarily take the pressure off Wayfair’s high operating expenses, but it allows the retailer to experiment with a more traditional model and measure its impacts.

Wayfair didn’t offer an exact launch date beyond “fall 2019” or other details about the stores, like square footage, for example. It said other details will be shared closer to launch.


Source: The Tech Crunch

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Zeus raises $24M to make you a living-as-a-service landlord

Posted by on Mar 15, 2019 in 2nd Address, Airbnb, Apps, eCommerce, Finance, funding, Fundings & Exits, garry tan, initialized capital, Personnel, Real Estate, Recent Funding, Sonder, Startups, TC, Venture Capital, zeus | 0 comments

Cookie-cutter corporate housing turns people into worker drones. When an employee needs to move to a new city for a few months, they’re either stuck in bland, giant apartment complexes or Airbnbs meant for shorter stays. But Zeus lets any homeowner get paid to host white-collar transient labor. Through its managed ownership model, Zeus takes on all the furnishing, upkeep, and risk of filling the home while its landlords sit back earning cash.

Zeus has quietly risen to a $45 million revenue run rate from renting out 900 homes in 23 cities. That’s up 5X in a year thanks to Zeus’ 150 employees. With a 90 percent occupancy rate, it’s proven employers and their talent want more unique, trustworthy, well-equipped multi-month residences that actually make them feel at home.

Now while Airbnb is distracted with its upcoming IPO, Zeus has raised $24 million to steal the corporate housing market. That includes a previous $2.5 million seed round from Bowery, the new $11.5 million Series A led by Initialized Capital whose partner Garry Tan has joined Zeus’ board, and $10 million in debt to pay fixed costs like furniture. The plan is to roll up more homes, build better landlord portal software, and hammer out partnerships or in-house divisions for cleaning and furnishing.

“In the first decade out of school people used to have two jobs. Now it’s four jobs and it’s trending to five” says Zeus co-founder and CEO Kulveer Taggar. “We think in 10 years, these people won’t be buying furniture.” He imagines they’ll pay a premium for hand-holding in housing, which judging by the explosion in popularity of zero-friction on-demand services, seems like an accurate assessment of our lazy future. Meanwhile, Zeus aims to be “the quantum leap improvement in the experience of trying to rent out your home” where you just punch in your address plus some details and you’re cashing checks 10 days later.

Buying Mom A House Was Step 1

“When I sold my first startup, I bought a home for my mom in Vancouver” Taggar recalls. It was payback for when she let him remortgage her old house while he was in college to buy a condo in Mumbai he’d rent out to earn money. “Despite not having much growing up, my mom was a travel agent and we got to travel a lot” which Taggar says inspired his goal to live nomadically in homes around the world. Zeus could let other live that dream.

Zeus co-founder and CEO Kulveer Taggar

After Oxford and working as an analyst at Deutsche Bank, Taggar built student marketplace Boso before moving to the United States. There, he co-founded auction tool Auctomatic with his cousin Harjeet Taggar and future Stripe co-founder Patrick Collison, went through Y Combinator, and sold it to Live Current Media for $5 million just 10 months later. That gave him the runway to gift a home to his mom and start tinkering on new ideas.

With Y Combinator’s backing again, Taggar started NFC-triggered task launcher Tagstand, which pivoted into app settings configurer Agent, which pivoted into automatic location sharing app Status. But when his co-founder Joe Wong had to move an hour south from San Francisco to Palo Alto, Taggar was dumbfounded by how distracting the process was. Listing and securing a new tenant was difficult, as was finding a medium-term rental without having to deal with exhorbitant prices or sketchy Cragislist. Having seen his former co-founder go on to great success with Stripe’s dead-simple payments integration, Taggar wanted to combine that vision with OpenDoor’s easy home sales to making renting or renting out a place instantaneous. That spawned Zeus.

Stripe Meets OpenDoor To Beat Airbnb

To become a Zeus landlord, you just type in your address, how many bedrooms and bathrooms, and some aesthetic specs, and you get a monthly price quote for what you’ll be paid. Zeus comes in and does a 250-point quality assessment, collects floor plans, furnishes the property, and handles cleaning and maintenance. It works with partners like Helix mattresses, Parachute sheets, and Simple Human trash cans to get bulk rates. “We raised debt because we had these fixed investments into furniture. It’s not as dilutive as selling pure equity” Taggar explains.

Zeus quickly finds a tenant thanks to listings in Airbnb and relationships with employers like Darktrace and ZS Associates with lots of employees moving around. After passing background checks, tenants get digital lock codes and access to 24/7 support in case something doesn’t look right. The goal is to get someone sleeping there in just 10 days. “Traditional corporate housing is $10,000 a month in SF in the summer or at extended stay hotels. Airbnb isn’t well suited [for multi-month stays]. ” Taggar claims. “We’re about half the price of traditional corporate housing for a better product and a better experience.”

Zeus signs minimum two-year leases with landlords and tries to extend them to five years when possible. It gets one free month of rent as is standard for property managers, but doesn’t charge an additional rate. For example, Zeus might lease your home for $4,000 per month but gets the first month free, and rent it out for $5,000 so it earns $60,000 but pays you $44,000. That’s a tidy margin if Zeus can get homes filled fast and hold down its upkeep costs.

“Zeus has been instrumental for my company to start the process of re-location to the Bay Area and to host our visiting employees from abroad now that we are settled” writes Zeus client Meitre’s Luis Caviglia. “I particularly like the ‘hard truths’ featured in every property, and the support we have received when issues arose during our stays.”

At Home, Anywhere

There’s no shortage of competitors chasing this $18 billion market in the US alone. There are the old-school corporations and chains like Oakwood and Barbary Coast that typically rent out apartments from vast, generic complexes at steep rates. Stays over 30 days made up 15 percent of Airbnb’s business last year, but the platform wasn’t designed for peace-of-mind around long-term stays. There are pure marketplaces like UrbanDoor that don’t always take care of everything for the landlord or provide consistent tenant experiences. And then there are direct competitors like $130 million-funded Sonder, $66 million-funded Domio, recently GV-backed 2nd Address, and European entants like MagicStay, AtHomeHotel, and Homelike.

Zeus’ property unit growth

There’s plenty of pie, though. With 330,000 housing units in SF alone, Zeus has plenty of room to grow. The rise of remote work means companies whose employee typically didn’t relocate may now need to bring in distant workers for a multi-month sprint. A recession could make companies more expense-cautious, leading them to rethink putting up staffers in hotels for months on end. Regulatory red tape and taxes could scare landlords away from short-term rentals and towards coprorate housing. And the need to expand into new businesses could tempt the big vacation rental platforms like Airbnb to make acquisitions in the space — or try to crush Zeus.

Winners will be determined in part by who has the widest and cheapest selection of properties, but also by which makes people most comfortable in a new city. That’s why Taggar is taking a cue from WeWork by trying to arrange more community events for its tenants. Often in need of friends, Zeus could become a favorite by helping people feel part of a neighborhood rather than a faceless inmate in a massive apartment block or hotel. That gives Zeus network effect if it can develop density in top markets.

Taggar says the biggest challenge is that “I feels like I’m running five startups at once. Pricing, supply chain, customer service, B2B. We’ve decided to make everything custom — our own property manager software, our own internal CRM. We think these advantages compound, but I could be wrong and they could be wasted effort.”

The benefits of Zeus‘ success would go beyond the founder’s bank account. “I’ve had friends in New York get great opportuntiies in San Francisco but not take them because of the friction of moving” Taggar says. Routing talent where it belongs could get more things built. And easy housing might make people more apt to live abroad temporarily. Taggar concludes, “I think it’s a great way to build empathy.”


Source: The Tech Crunch

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Surging costs send shares of ecommerce challenger Pinduoduo down 17 percent

Posted by on Mar 14, 2019 in alibaba, alibaba group, Amazon, Asia, bytedance, China, e-book, E-Commerce, Earnings, eCommerce, online marketplaces, Qutoutiao, shanghai, supply chain, tiktok | 0 comments

China’s new tech force Pinduoduo is continuing its race to upend the ecommerce space, even at the expense of its finances. The three-year-old startup earmarked some big wins from the 2018 fiscal year, but losses were even greater, dragging its shares down 17 percent on Wednesday after the firm released its latest earnings results.

The Shanghai-based company is famous for offering cheap group deals and it’s able to keep prices down by sourcing directly from manufacturers and farmers, cutting out middleman costs. In 2018, the company saw its gross merchandise value, referring to total sales regardless of whether the items were actually sold, delivered or returned, jump 234 percent to 471.6 billion yuan ($68.6 billion). Fourth-quarter annual active buyers increased 71 percent to 418.5 million, during which monthly active users nearly doubled to 272.6 million.

These figures should have industry pioneers Alibaba and JD sweating. In the twelve months ended December 31, JD fell behind Pinduoduo with a smaller AAU base of 305 million. Alibaba still held a lead over its peers with 636 million AAUs, though its year-over-year growth was a milder 23 percent.

But Pinduoduo also saw heavy financial strain in the past year as it drifted away from becoming profitable. Operating loss soared to 10.8 billion ($1.57 billion), compared to just under 600 million yuan in the year-earlier period. Fourth-quarter operating loss widened a staggering 116 times to 2.64 billion yuan ($384 million), up from 22 million yuan a year ago.

Pinduoduo is presenting a stark contrast to consistently profitable Alibaba, which generates the bulk of its income from charging advertising fees on its marketplaces. This light-asset approach grants Alibaba wider profit margins than its arch-foe JD, which controls most of the supply chain like Amazon and makes money from direct sales. Pinduoduo seeks out a path similar to Alibaba’s and monetizes through marketing services, but its latest financial results showed that mounting costs have tempered a supposedly lucrative model.

Where did the ecommerce challenger spend its money? Pinduoduo’s total operating expenses from 2018 stood at 21 billion yuan ($3 billion), of which 13.4 billion yuan went to sales and marketing expenses such as TV commercials and discounts for users. Administration alongside research and development made up the remaining costs.

Pinduoduo’s spending spree recalls the path of another up-and-coming Chinese tech startup, Qutoutiao . Like Pinduoduo, Qutoutiao has embarked on a cash-intensive journey by burning billions of dollars to acquire users. The scheme worked, and Qutoutiao, which runs a popular news app and a growing e-book service, is effectively challenging ByteDance (TikTok’s parent company) in smaller Chinese cities where many veteran tech giants lack dominance.

Offering ultra-cheap items is a smart bet for Pinduoduo to lock in price-intensive consumers in unpenetrated, smaller cities, but it’s way too soon to know whether this kind of expensive growth will hold out long-term.


Source: The Tech Crunch

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African e-commerce startup Jumia files for IPO on NYSE

Posted by on Mar 12, 2019 in africa, eCommerce, Egypt, Fundings & Exits, Ghana, Goldman Sachs, IPO, jumia, kenya, Lagos, morgan stanley, morocco, Naspers, Nigeria, online retail, Rocket Internet, Smartphones, Startup company, Startups, TC, tech startup, travel bookings, U.S. Securities and Exchange Commission, unicorn | 0 comments

Pan-African e-commerce company Jumia filed for an IPO on the New York Stock Exchange today, per SEC documents and confirmation from CEO Sacha Poignonnec to TechCrunch.

The valuation, share price and timeline for public stock sales will be determined over the coming weeks for the Nigeria-headquartered company.

With a smooth filing process, Jumia will become the first African tech startup to list on a major global exchange.

Poignonnec would not pinpoint a date for the actual IPO, but noted the minimum SEC timeline for beginning sales activities (such as road shows) is 15 days after submitting first documents. Lead adviser on the listing is Morgan Stanley .

There have been numerous press reports on an anticipated Jumia IPO, but none of them confirmed by Jumia execs or an actual SEC, S-1 filing until today.

Jumia’s move to go public comes as several notable consumer digital sales startups have faltered in Nigeria — Africa’s most populous nation, largest economy and unofficial bellwether for e-commerce startup development on the continent. Konga.com, an early Jumia competitor in the race to wire African online retail, was sold in a distressed acquisition in 2018.

With the imminent IPO capital, Jumia will double down on its current strategy and regional focus.

“You’ll see in the prospectus that last year Jumia had 4 million consumers in countries that cover the vast majority of Africa. We’re really focused on growing our existing business, leadership position, number of sellers and consumer adoption in those markets,” Poignonnec said.

The pending IPO creates another milestone for Jumia. The venture became the first African startup unicorn in 2016, achieving a $1 billion valuation after a $326 funding round that included Goldman Sachs, AXA and MTN.

Founded in Lagos in 2012 with Rocket Internet backing, Jumia now operates multiple online verticals in 14 African countries, spanning Ghana, Kenya, Ivory Coast, Morocco and Egypt. Goods and services lines include Jumia Food (an online takeout service), Jumia Flights (for travel bookings) and Jumia Deals (for classifieds). Jumia processed more than 13 million packages in 2018, according to company data.

Starting in Nigeria, the company created many of the components for its digital sales operations. This includes its JumiaPay payment platform and a delivery service of trucks and motorbikes that have become ubiquitous with the Lagos landscape.

Jumia has also opened itself up to traders and SMEs by allowing local merchants to harness Jumia to sell online. “There are over 81,000 active sellers on our platform. There’s a dedicated sellers page where they can sign-up and have access to our payment and delivery network, data, and analytic services,” Jumia Nigeria CEO Juliet Anammah told TechCrunch.

The most popular goods on Jumia’s shopping mall site include smartphones (priced in the $80 to $100 range), washing machines, fashion items, women’s hair care products and 32-inch TVs, according to Anammah.

E-commerce ventures, particularly in Nigeria, have captured the attention of VC investors looking to tap into Africa’s growing consumer markets. McKinsey & Company projects consumer spending on the continent to reach $2.1 trillion by 2025, with African e-commerce accounting for up to 10 percent of retail sales.

Jumia has not yet turned a profit, but a snapshot of the company’s performance from shareholder Rocket Internet’s latest annual report shows an improving revenue profile. The company generated €93.8 million in revenues in 2017, up 11 percent from 2016, though its losses widened (with a negative EBITDA of €120 million). Rocket Internet is set to release full 2018 results (with updated Jumia figures) April 4, 2019.

Jumia’s move to list on the NYSE comes during an up and down period for B2C digital commerce in Nigeria. The distressed acquisition of Konga.com, backed by roughly $100 million in VC, created losses for investors, such as South African media, internet and investment company Naspers .

In late 2018, Nigerian online sales platform DealDey shut down. And TechCrunch reported this week that consumer-focused venture Gloo.ng has dropped B2C e-commerce altogether to pivot to e-procurement. The CEO cited better unit economics from B2B sales.

As demonstrated in other global startup markets, consumer-focused online retail can be a game of capital attrition to outpace competitors and reach critical mass before turning a profit. With its unicorn status and pending windfall from an NYSE listing, Jumia could be better positioned than any venture to win on e-commerce at scale in Africa.


Source: The Tech Crunch

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Josh Wood, hair colorist to the stars, gets $6.5M led by Index in its latest D2C bet

Posted by on Mar 10, 2019 in direct to consumer, eCommerce, Europe, Hair, hair color, Index Ventures, Startups, TC | 0 comments

In the age of Amazon, where up to 90 percent of all consumers use it to buy goods and Amazon is accounting for a rapidly-growing percentage of a consumer’s total retail spend (along with other giants like Walmart), direct-to-consumer brands — leveraging social media alongside tech-first apps — are emerging as sometimes surprising, but often effective, competition.

In one of the latest developments, London-based celebrity hair colorist Josh Wood — who has worked with the likes of David Bowie, PJ Harvey, Florence Welch, Saoirse Ronan and Elle Macpherson, as well as with fashion designers Miuccia Prada, Donatella Versace and Marc Jacobs (and, disclaimer, me: I tried out his products before agreeing to write this story) — has raised $6.5 million led by Index Ventures, with JamJar Investments and Venrex also participating, to launch his products into cyberspace with the aim of disrupting the at-home hair color industry.

At-home hair color is a huge market that has largely been untouched in terms of innovation. Some 80 percent of women over 25 color their hair, with 75 percent of those doing it at home, working out to an industry worth $20 billion annually.

As with other direct-to-consumer brands, tech is playing a role on multiple levels at Josh Wood, from how the product is developed through to how it will match with consumers, as well as how it is marketed.

But unlike other direct-to-consumer startups, Josh Wood actually put down roots (heh) first in a very non-tech environment.

If you live in London, you might already recognise the name and logo of Josh Wood. Apart from his star list of clients (and the name check he gets in the media for that work), he has already been running his hair coloring business at some scale.

Wood’s products have been adorning a selection of London buses, in part to promote a partnership he’s had for the last year with Boots, a big UK chain of drugstores, where his coloring kits and other products are sold alongside big names like Revlon and L’Oreal.

That partnership has been a big boost for both Wood and Boots so far. Some 240,000 products were sold in the first year, contributing to the first growth spike that Boots has seen in the hair coloring category for more than a decade. (One reason also that the startup attracted the likes of Index, which has been behind other companies that have straddled the worlds of women’s consumer goods and tech, such as Farfetch and Glossier.)

The range of products — which includes hair coloring kits, root concealer products, and color-specific shampoo and conditioners — has been marketed from the start as a new take on hair coloring.

Wood has been working as a colorist himself for some 30 years, and while he has worked with some of the biggest names in women’s hair care in that time — he’d once been a global ambassador for Wella and he is currently global color creative director for Redken — he believes that there is a lot of room for improvement in home coloring.

“You get thousands of boxes of hair colors, and women are usually terrified of making the wrong choice,” he said in an interview. And that’s before you consider how prolonged dying at home can fry your hair if you don’t know what you’re doing, or using the products incorrectly.

Wood’s focus up to this point has been mainly on the product itself. Using his learnings from being a leading colorist, and knowing some of the pros and cons of working with brands that already sell mass-produced consumer goods, he has worked with chemists and other product designers on developing new ranges of shades an add-in product, called “Shade Shot Plus,” that extend the range even further and bring in highlights that are unique to each person’s hair; as well as aftercare products.

Shade Shot Plus has been a particularly notable development. Wood said that up to now the main endgame for producers of at-home hair coloring products has been to create standardised colors that will always look the same on each woman, so that it can be sold more consistently and predictably (think of those slightly macabre locks of hair that you sometimes see hanging in the aisles at drug stores showing “the color”). But the product developers couldn’t standardise how the highlights product would look. That roadblock, Wood said, turned out “to be a gift.”

In fact, standardised color runs counter to how professionals work, and what those who go to professionals want. “No two colors are the same,” he said of Shade Shot Plus “One of the big barriers at home is that women feel they have obvious ‘box color’, cookie-cutter lego hair, but this unlocks that, because the tones deposit differently on everyone’s hair.”

That product development is set to continue. With an approach reminiscent of Third Love how it has redefined shopping for bras by vastly extending the range of bra sizes, the idea will be to extend that color range even further down the line.

“This is the tip of the iceberg in terms of the ideas I’ve got,” he said. “There is a lot to learn from base color and foundation matching. This is a category that has had no innovation for decades and this is just the first iteration.”

But now, with the funding, the plan is to complement that product development with technology to help people find colors that best suit their own preferences — whether it’s for a new color that will go with a specific complexion, or to find the tint that most closely matches the color their hair used to be before it turned grey. At the same time, the aim is to deliver at-home dying in an experience that is more reminiscent of what you get if you pay much more (and spend more time) going to a trusted, professional hair colorist.

“We are pressing heavy on being able to deliver an amazing consultation online that will deliver a bespoke hair color that is very natural and covers grey,” he said. “But at our heart, I’d like to think of us as a brand that cares for the condition of your hair.”

Wood said that he is currently hiring and working with technologists to develop color-finding tools, akin to the kind you might come across in online makeup storefronts, to explore both how a woman (or man) looks, and what she or he is looking for.

This is in progress but the idea, it sounds like, will not only involve computer vision but also machine learning to tap into a bigger database of what “lookalike” complexions and people choose for colors, as well as a database created by Josh Wood itself to match those colors, based on the tinting choices that many professionals would make for those people were they sitting in a chair in a salon.

Wood said that he wanted to raise this money and expand the product as a direct-to-consumer offering because he didn’t think he’d be able to achieve this with something that is sold on a shelf — although the idea will be to complement that, too.

“The reason we are approaching this growth phase from a digital perspective is because we want to develop our business” — the market for at-home coloring is much bigger than professional, in-salon coloring — “but also have a best-in-class consultation tool. I’ve been coloring for nearly 30 years and this is the moment for me to democratize my learnings, and I couldn’t do that without digital. There is no other way to connect with so many consumers, and it’s very difficult to get that element right in a brick-and-mortar point of sale.”

I asked Wood if he would also explore the idea of subscriptions, a la Dollar Shave Club, as part of the mix as well, and his answer was actually a little refreshing and I think is a good sign for how this might develop over time.

“We are less keen on subscriptions and more keen that women feel we’re in the bathroom with them every time, monitoring how their hair color changes over time. We want something much deeper than just selling the same thing to them once a month.”


Source: The Tech Crunch

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WSJ: Amazon to open new US grocery chain separate from Whole Foods

Posted by on Mar 1, 2019 in Amazon, AmazonFresh, eCommerce, Grocery store, online grocery, Prime Now, retailers, whole foods | 0 comments

A report from The Wall St. Journal today claims Amazon is preparing to open a new chain of grocery stores across the U.S. that won’t be associated with Whole Foods. The retailer is expected to open the first of these stores in L.A., possibly by the end of 2019, and has signed leases for at least two other locations opening next year, the report claims.

The stores will be separately operated from Whole Foods, but it’s not clear yet how they’ll be branded or even if they’ll carry the Amazon name. The longer-term plan involves opening “dozens” of these stores in major U.S. cities, and Amazon may even consider an acquisition strategy related to this goal, which would see it pick up regional grocery chains with about a dozen stores under operation, the report said. It may also target retail space vacated by Kmart.

Other cities that could be seeing the new stores in the future include San Francisco, Seattle, Chicago, D.C. and Philadelphia.

The stores would carry a different product assortment than Whole Foods, including items at lower price points. They may carry a mix of groceries, health and beauty products, and would include a parking lot area for grocery pickup.

They’ll be smaller than a typical grocery store at 35,000 sq. ft. instead of the usual 60,000 sq. ft., The WSJ said.

The news comes at a time when Amazon’s grocery delivery business is facing steep competition. Its rival Walmart has capitalized on its brick-and-mortar footprint and years of testing. Today, Walmart’s grocery pickup service is available at more than 2,100 locations and delivery is offered at nearly 800. It expects to offer pickup at 3,100 locations and delivery at 1,600 locations by the end of fiscal year 2020. The company even attributed its strong Q4 sales, in part, to the growing online grocery business.

Target, meanwhile, picked up same-day grocery delivery service Shipt for $550 million in 2017, and has been expanding its own drive-up, in-store pickup and next-day delivery services to cater to shoppers’ other household needs.

Amazon also competes on grocery delivery with Instacart, Postmates and services from other grocery chains.

However, its own grocery strategy is a bit mixed. In addition to Whole Foods, which offers grocery pickup and delivery in some locations, Amazon continues to offer delivery service through AmazonFresh and, in select markets, Prime Now.

Meanwhile, it’s simultaneously invested in cashierless, grab-and-go convenience stores, under the Amazon Go brand. For consumers, that means there’s not one single point of access for ordering groceries from Amazon, which can lead to confusion.

Reached for comment about the WSJ report, an Amazon spokesperson said the company doesn’t comment on rumors or speculation.


Source: The Tech Crunch

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