AmazonFresh lowers annual subscription via a $15 monthly rate. #Retail #Grocery

“I recall one of my first lessons in grad school, “cash flow is king.” I think that a lot of people feel the same about how they manage their home finances. Though there is only a $20 annual net savings, I think that the $14.99 per month fee will significantly lower the barrier to adoption for many Prime members. I think that this pricing move, and the recently announced push for both AmazonFresh pickup locations and perishables-focused convenience stores will position them to continue to grow their online grocery business and grow share.

Though the online grocery industry is relatively small at $33 billion as compared to the grocery industry as a whole at $795 billion, Amazon currently represents 26 percent of the online share with $8.7 billion in revenue. Convenience and competitive pricing will continue to reign … save me time, save me money.”  ~ Shawn Harris

Read full article: http://www.retailwire.com/discussion/amazonfresh-lowers-annual-subscription-via-a-15-monthly-rate/

Consortium For Operational Excellence In Retailing (COER) @Wharton – Day 1 Quick Recap

About Consortium For Operational Excellence In Retailing (COER)

Consortium for Operational Excellence in Retailing (COER) is focused on advancing retail operations from a combined academic and business perspective. We hold an annual conference in May, alternating between Harvard Business School and The Wharton School, where we present cutting edge academic research for participants to exchange ideas, thoughts, and challenges. COER attracts companies and academics from various parts of the world.

COER began as the Harvard/Wharton Merchandising Effectiveness Project in 1996, started by Marshall Fisher of The Wharton School and Ananth Raman of Harvard Business School. The academics in COER have published dozens of papers in leading journals and many case studies that are taught at top business school. The work produced by COER was summarized recently by Fisher and Raman in the book “The New Science of Retailing,” Harvard Business School Press. COER has facilitated the work of numerous doctoral students, many of whom currently are on the faculties of leading business schools.

COER grew out of the understanding that while the retail industry now has the analytical tools to make merchandising more effective, there are still many areas where academia can help to push the retail industry forward from an operational perspective.

Consortium For Operational Excellence In Retailing (COER) – Day 1 Quick Recap
Session One: Kicking the Growth Addiction
Presentation by Marshall Fisher, Vishal Gaur of Cornell University, and Herb Kleinberger of NYU
Key takeaways:
  • Growth (Open more stores!)
  • Denial (Should we open more stores?)
    • Stop opening stores when they stop providing a return.
  • Mature (We need to get more from existing stores.)
    • Drive out non-productive work.
    • Grow revenues faster than expenses. In business of scale, even a 1% or 2% increase can have significant bottom line impact if expenses are kept in check.
    • Focus on projects that return significant capital returns.

 

Presentation by Donald Ngwe of Harvard Business School and Paulo Campos of Zalora
Key takeaways:
  • Selectively inducing search friction on a retail website can increase margins by as much as 20%, without negatively affecting conversion. Cost neutral chance in selling strategy that promises significant potential returns.
  • Caveats: Increased search friction on a website may drive consumers to the competitors site Long-term performance may be harmed as consumers form expectations about an on-line store.
Presentation by Santiago Gallino of Tuck School of Business and Antonio Moreno of Kellogg School of Management
Key takeaway:
  • Retailers need to optimize on
    • 1) Price competition,
    • 2) Information & ratings,
    • 3) Fulfillment speed,
    • 4) Return policy, and
    • 5) Retailer brand promise.
Presentation by Chloe Kim, Marshall Fisher, and Xuanming Su, all of The Wharton School
Key takeaway:
  • A variant fulfillment model where the delivery trucks are positioned (parked) at optimal locations for customers to self pick-up. This study took at look deeper at what daily repositioning can do to sales. Using a random forest machine learning algorithm the team determined that the firm could realize a 25.6% increase in sales.
Session Five: Managing Customer Compatibility
Presentation by Ryan Buell of Harvard Business School
Key takeaways:
  • Customer satisfaction and loyalty are tightly aligned.
  • Greatest influence on customer satisfaction:
    • 1) The Customer – 94%. That’s right, it’s mostly out of your control.
    • 2) Employee – 2%
    • 3) Locations – 2%
    • 4) Processes – 1%
    • 5) Markets – 1%
  • If you are really good at 1 dimension which is most aligned with your brand promise, customer will typically apply positive attribution to your business’ other dimensions.
Presentation by Amitabh Sinha of Michigan Ross School of Business
Key takeaways:
  • Dynamic warehousing is the acquisition of warehousing space and services on-demand, in small increments, from a large pool of geographically spread warehouses, on a pay-as-you-go basis (OPEX).
  • However,  self-owned/operated networks may be cheaper depending on a number of variables. Lack of cost certainty. Systems integration.
  • There may be a optimal model that leverage both dynamic and self-owned/operated networks.
Session Seven: Data Driven Pricing
Presentation by Kris Ferreira of Harvard Business School
Key takeaways:
  • How can you combine predictive analytics to predict demand with prescriptive analytics to make tactical decisions?
  • There was a ~10% increase in revenue when models where applied.
Session Eight: The Effect of Social Influence on Demand
Presentation by Vishal Gaur of Cornell University
Key takeaways:
  • Two dimensions: Popularity “Share” rankings and Quality rankings.
  • Low quality (low reviews), should push Popularity “Share” rankings with customers.
  • High quality (high reviews), should push Quality rankings with customers.
Session Nine: Case Study—Coca Cola Vietnam
Presentation by Ananth Raman
Key takeaways:
  • Company’s can die from a thousand little cuts, not just one big wound.
  • Drive employee satisfaction
  • Drive lasting relationships with your customers.
  • Deliver what you say you are going to deliver.
Session Ten: A Conversation on Cyber Security
Ananth Raman in conversation with Kent Burnett of Dillard’s, Inc.
Key takeaways:
  • Security is a multi layered effort
  • Employees need to be trained and tested on security policy and procedures
  • It is an industry issue, which takes industry collaboration. Collaboration through organizations such as Retail Cyber Intelligence Sharing Center (R-CISC) – https://r-cisc.org/.

Consortium For Operational Excellence In Retailing (COER) @Wharton – Day 2 Quick Recap