In what has been a bit of a shotgun wedding, Nike has finally agreed to sell its products directly to Amazon. With hordes of third party sellers offering up Nike footwear and apparel on the giant e-commerce site, Nike was losing control of pricing, and leaving itself open to fake goods. Laura Stevens and Sara Germano write: One reason for their capitulation is the collapse of a retail distribution network they could better control, as malls flounder and chains like Sports Authority Holdings Inc. shutter. A company’s power to dictate who could sell its products and how, penalizing … [Read more...]
Amazon Prime Wardrobe vs. Traditional Retail: The Hits Just Keep Coming
Apparel is something that intuition says people want to buy at the store, not online. It's easier to make clothing choices when you can try something on, examine its features, and make sure the size is right for you. But Amazon is attacking that perception with a new service called Amazon Prime Wardrobe. The service sends Amazon Prime members a box of eligible apparel items, which they then have seven days to try on, shipping back what they don't want, for free. The Wall Street Journal's Suzanne Kapner explains: Customers aren’t charged for the purchase during the trial period and they are … [Read more...]
Nike Sees the Future-Sells Shoes to Amazon Directly
After holding out as long as possible, Nike will now sell shoes directly to Amazon.com. With traditional retail flailing, Nike doesn't have much choice, it needs to sell where the customers are, and that's online. Sara Germano and Laura Stevens report: Nike Inc. NKE -1.23% has agreed to sell some of its products directly to Amazon.com Inc.,AMZN +0.66% a person familiar with the matter said, a concession by the sneaker giant that it can no longer afford to ignore the online retailing behemoth. While Nike sells its shoes and sportswear through department stores and specialty retailers, it … [Read more...]
Amazon/Whole Foods Deal Will Force Grocers to Upgrade Their Digital Efforts
Once Amazon gets its hands on Whole Foods, expect the company's engineers to be tasked with creating new ways to insert technology into the grocery business. Meanwhile, competitors like Wal-Mart, Kroger, and Costco will be trying to improve their digital efforts to keep customers satisfied. Angus Loten writes for The Wall Street Journal: “Whole Foods will soon become Amazon’s experimental playground for developing more sophisticated big-data marketing strategies,” Stephen DiFranco, a former vice president at Hewlett-Packard and Lenovo, who founded big-data strategy firm IoT Advisory Group, … [Read more...]
Amazon: Bankruptcy in Groceries Happens
This is why Amazon will need to keep unions out of its grocery business. The Chicago Tribune explains the bankruptcy of Central Grocers: After almost 100 years of doing business, Joliet-based Central Grocers filed for Chapter 11 bankruptcy Thursday and will lay off about 550 employees at the company's Joliet warehouse. Central Grocers is a grocery cooperative that has long operated as wholesaler for more than 400 independent grocery stores in the Chicago area — including chains like Treasure Island, Pete's Fresh Market, Angelo Caputo's Fresh Market and Sunset Foods — distributing … [Read more...]
Amazon’s Purchase of Whole Foods: the Investment Implications
You need food to survive. And as it turns out, so does Amazon. With the purchase of Whole Foods, Amazon has determined how it will get into a customer’s home. More important, it has figured out a way to welcome customers into its home. Whole Foods is Amazon’s “Welcome Home” mat. Obviously the purchase is great news for Whole Foods with its 30% increase in stock value Friday. I love the move for Amazon too. But to me, this is a beautiful move for retail in general. Retailers have been put on notice: You’re in play. Getting into customers’ homes is the future. It’s what Amazon, Apple, … [Read more...]
Wal-Mart Employs Guerrilla Tactics in Retail War
Last week Amazon announced the purchase of Whole Foods, diving into the brick and mortar grocery business. Grocery has been the one bright spot in retail lately, and obviously Amazon wants in. Meanwhile big companies like Wal-Mart and Target have been trying to catch up to Amazon. Wal-Mart is taking an unusual step by asking store workers to deliver packages on their way home. The Wall Street Journal reports: Wal-Mart Stores Inc. WMT -4.63% is testing a program in which store workers deliver some orders placed on Walmart.com or Jet.com, a sign of how the retailer hopes to use its 4,700 U.S. … [Read more...]
The Rules of the Retail Game Have Changed
Mickey Drexler, famed Gap and J. Crew fashion genius, has found that in the digital era, the rules of retail have changed. Rather than surviving on high priced signature looks, retailers must focus on price, speed, and accessibility. Drexler told The Wall Street Journal “We became a little too elitist in our attitude.” Khadeeja Safdar reports: Many visionaries focus on doing what they do best, even when the ground shifts beneath them. From newspapers to television, successful companies have been upended by disruptive technologies. Facebook Inc. is now the world’s largest publisher; Netflix … [Read more...]
Is There Some Life Left in Retail?
Perhaps brick and mortar stores can learn to compete with Amazon in a new age for retail. Wal-Mart's online business surged last quarter. As Amazon attempts to build out its footprint in physical stores, and Wal-Mart expands online, maybe a combination of brick and mortar and e-commerce sales will be the key to retail longevity. In the U.S., which accounts for two-thirds of Wal-Mart’s sales, foot traffic rose 1.5% in the quarter ended April 30. That rise was supported in part by strong sales of groceries and household goods. Wal-Mart has been lowering some prices in those categories, in part … [Read more...]
Target: “We’re not trying to be the catalog of everything”
In a time when it seems Amazon and Wal-Mart are attempting to beat each other to offering the absolute widest selection of products available at the lowest possible cost, Target is taking a different track. Target's digital chief, Mike McNamara tells the Wall Street Journal “We aren’t going to add products to our website and stores just because they exist.” Khadeeja Safdar writes that instead of barreling headlong into the acquisition of any available online retailer, Target has taken a more cautious approach. It remained on the sidelines when Wal-Mart paid $3.3 billion for discount retailer … [Read more...]