Wal-Mart Paying for Store Traffic
- Wal-Mart to offer discounts for orders picked up in store.
- Marc Lore (Founder of Jet.com), head of Wal-Mart’s e-commerce operations, told Reuters on Tuesday he expects the move to boost transactions online and improve in-store foot traffic — and take market share from Amazon in the process.
- Starting April 19, Wal-Mart will offer pickup discounts on 10,000 items and on more than 1 million products by June.
- Online orders picked up in store already qualify for no shipping charges since the retailer saves on shipping fees. The latest discounts come on top of that. For example, a Vizio 70-inch 4K Ultra HD television priced at $1,698 for store pick up will qualify for an additional discount of $50.
- Lore said Wal-Mart is able to offer these discounts as it is able to eliminate delivery costs by leveraging its fleet of more than 6,700 trucks to deliver products from warehouses to stores.
Bed Bath & Below
- Bed Bath & Beyond Inc.’s CEO Steven H. Temares said the company is getting better at digital, adding to its assortment and improving search, content and speed at the backend. But is this cannibalizing the brick-and-mortar store?
- The company is still opening more stores than it’s closing, opening 29 and closing 13 stores in 2016, and planning to open 30 new stores and close 15 to 20 in 2017.
- Gross margin declined to 38% as compared to approximately 38.6% in the prior year period. The decrease was primarily due to shipping expenses, including a change in the company’s free shipping thresholds from $49 to $29 and free shipping promotions.
- “We are leveraging our improved predictive modeling tools to optimize our direct mail and print campaigns, including our newest seasonal home catalog titled Spring Refresh which was mailed a few weeks ago to a select group of customers and prospective customers,” said Temares.
- Bed Bath & Beyond expects fiscal 2017 net sales to increase in the “low to mid single-digit percentage” range. Management likewise expects comparable sales to rise, although the forecasted range is from “relatively flat to slightly positive,” driven primarily from digital channel growth.
- Additionally, gross and operating margins are likely to decline further in fiscal 2017, due to anticipated increases in shipping, coupon, payroll, and technology expenses. In turn, earnings per share are projected to decrease as much as 10% in 2017.
Jeff Bezos and the Book of Secrets
Notable excerpts from his shareholder letter last month:
At Amazon, we’ve been engaged in the practical application of machine learning for many years now. Some of this work is highly visible: our autonomous Prime Air delivery drones; the Amazon Go convenience store that uses machine vision to eliminate checkout lines; and Alexa,1 our cloud-based AI assistant. (We still struggle to keep Echo in stock, despite our best efforts. A high-quality problem, but a problem. We’re working on it.)
But much of what we do with machine learning happens beneath the surface. Machine learning drives our algorithms for demand forecasting, product search ranking, product and deals recommendations, merchandising placements, fraud detection, translations, and much more. Though less visible, much of the impact of machine learning will be of this type – quietly but meaningfully improving core operations.
Put all the pieces together, and Bezos’s key message is that data can be incredibly valuable in filling in the blanks, or in helping companies execute current strategies faster and more effectively. But at the highest levels, the best new products and new strategies can’t emerge from the numbers alone.