This Week in Retail Marketing Innovation - June 17, 2019

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Walmart introduces new store-to-fridge food delivery service

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Walmart is taking grocery delivery service to the next level by offering fresh food delivery directly to customers’ fridges. With their new pilot program, InHome Delivery, customers can place their orders online and select a delivery time, even if that delivery time is when they’re not home.

For most shoppers, security would be a main concern. Walmart is combating these concerns by requiring an installed smart lock outside of their homes. When a Walmart employee arrives to make the delivery, they use the smart entry technology and wear a camera so customers can watch the full deliveries, beginning to end, in real time.

The program is very similar to Amazon’s Key by Amazon, which allows their customers to see their packages delivered within their homes via their “Cloud Cam” and smart lock technology.

The main difference between the two programs, besides the specific services they offer, is that Amazon Key can be accessed by third-party delivery services, while Walmart’s program only allows access to vetted and experienced (worked at the local Walmart for at least one year) Walmart employees.

With Walmart and Amazon’s battle for free one-day delivery services in full effect, it’s no surprise that they’re competing for the in-home delivery market as well. But this type of service seems to be the most controversial. The amount of backlash over security concerns that may come from either program could sink the other’s operation entirely.

Walmart is piloting the program this Fall in Pittsburgh, Kansas City and Vero Beach, and is rumored to eventually allow customers to return items by leaving them on the counter. We will have to stay tuned to see if Walmart can top Amazon’s in-home delivery reputation by offering this one-of-a-kind service.

Sporting goods retailer Decathalon creates a “Cash-2-Card” self-service kiosk

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Decathalon, a popular sporting goods retailer in more than 1,500 stores in 49 countries, came to the U.S. with an innovative in-store concept: a “GiftWise Cash-2-Card” self-serve kiosk.

To do this, Decathalon partnered with Self-Service Networks, a company described as an “integral partner” to the brand by Ashley Benson, product manager at Decathalon USA.

The self-service touchscreen kiosk allows customers to put in cash, and get back Decathalon gift cards. While the kiosk only takes cash, the rest of the store allows customers to make payments using mobile apps, Apple watches, or traditional debit/credit cards.

"Our GiftWise Cash-2-Card is our latest iteration of card dispensing innovations that help empower customers preferring to use cash payments to participate in everyday retail," Thomas Smith, president of Self-Service Networks, said in a recent press release.

If the kiosk gains significant popularity, retailers may adopt the trend. It’s likely that customers would see the kiosks appearing in the favorite retail stores within the next few years.

FedEx decides not to renew their express shipping contract with Amazon

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FedEx announced that it will not be renewing its contract with Amazon to provide express shipping services. From an outside view, it may seem unwise to cut any ties with one of the largest retailers in the world, but FedEx is focused “serving the broader e-commerce market,” since Amazon accounts for less than 1.3% of FedEx’s total revenue.

Jonathan Root, Moody’s senior vice president and lead FedEx analyst, explains the reasoning behind the separation beyond revenue: "FedEx will achieve higher margins and better returns on its investments in its Express network by re-deploying capacity to customers other than Amazon.”

But it appears that the real reason behind the break up may be because Amazon continues to build their own ground and air shipping services, which will soon account for 40% holding in Atlas Air Worldwide Holdings and ATSG, making them a direct competitor. Additionally, FedEx is generating a larger portion of their revenue from Walmart, a known rival of Amazon.

It’s important to note that the contract between Amazon and FedEx only covered air deliveries in the US. It’s likely they will continue delivering ground and international shipments.

Regardless, Amazon will feel the sting when it comes to managing the load of their one-day shipping services in the US, since they regularly depend on local carriers (UPS, FedEx, USPS) to fulfill a high volume of orders.

Risking the relationship with a powerful brand like Amazon is a risky move, but FedEx is hoping the other retail giants can cover any losses in shipments. To stay competitive, FedEx will also be launching a Sunday residential delivery service starting in the beginning of 2020.

Sounding Smart by The Retail Water Cooler

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  • The new tariff increases onChina-imported goods are forcing customers of brands like Ugg, Calvin Klein, and Ralph Lauren to pay increased prices for their products, as much as $25 on average according to a new report by data analytics and logistics firm Semantics3.

  • American Eagle Outfitters reported a total net revenue increase of $63 million, up 8% compared to just 6% the year prior. Their sub-brand Aerie saw its 18th consecutive quarter of double-digit comps, according to a company press release.

  • Mountain Hardwear officially launched an AR shopping app to display products in nearby environments, change product colors, or purchase the item on their website. The plan to add snow-sports apparel to the new app in partnership with GORE-TEX.

  • Facial recognition continues to spark up controversy within the U.S. Congress, as critics claim that the technology poses a threat to consumer privacy, and isn’t always accurate. This comes after San Francisco’s use of facial recognition technology by law enforcement.

  • Cheryl Abel-Hodges has been named the new CEO of Calvin Klein. Up until her appointment, she had been serving as group president of Calvin Klein North America and The Underwear Group.

  • CVS is redesigning 1,500 of its top-performing stores to match their new HealthHUB concept by the end of 2021. The HealthHUB design has proven successful for the company in terms of increased store traffic, sales, and prescription volumes.

  • Trent Kruse, senior vice president of J.C. Penny Co., will be exiting the company effective June 14 to pursue other opportunities, leaving another gap the company’s management team.