‘Amazon Charts’ Re-Define ‘Best Seller’

The New York Times: Amazon now tracks “not only the top-selling digital and print books on Amazon, but the ones that customers spend the most time reading … With its lists, Amazon aims to redefine the notion of a best seller, expanding it to include books that are ‘borrowed’ from its e-book subscription service, and ones that are streamed on Audible. As a result, the lists give increased visibility to books that might not typically appear on other best-seller lists.”

“All of Amazon’s acquisitions and new features are having a cumulative effect, allowing the company to draw on its vast customer base and troves of data to discover what is popular, and return that information to customers, creating a lucrative feedback loop … Crowdsourcing and data mining are also driving the company’s approach to its bookstores, which act as showcases for books popular with customers on the site. While the stores have traditional categories, like fiction, nonfiction and travel, the most eye-catching shelves feature categories culled from Amazon’s customer data.”

“The first thing customers see when they walk into the store is a large display table, labeled Highly Rated, which includes books with an average rating of 4.8 stars or higher on a scale of 5 … Another display case, labeled Page-Turners, features books that people finish reading on their Kindle in fewer than three days … Another section features the most ‘wished for’ books from Amazon’s website … The books are all displayed face out. Under each book is a card with the average customer rating, the number of reviews and a featured review from an Amazon reader. Displaying the full cover of each book mimics the visual look of Amazon’s website, and might lure customers to unfamiliar titles.”

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Google Eyes: Watch While You Shop

The Washington Post: “Google executives say they are using complex, patent-pending mathematical formulas to protect the privacy of consumers when they match a Google user with a shopper who makes a purchase in a brick-and-mortar store. The mathematical formulas convert people’s names and other personal information into anonymous strings of numbers.”

“The formulas make it impossible for Google to know the identity of the real-world shoppers, and for the retailers to know the identities of Google’s users, Google executives said. The companies know only that a match has been made. In addition, Google does not get a detailed description of the individual transactions, just the amount spent.”

“Google would not say how merchants had obtained consent from consumers to pass along their credit card information. In the past, both Google and Facebook have obtained purchase data for a more limited set of consumers who participate in loyalty programs. Consumers that participate in loyalty programs are more heavily tracked by retailers, and often give consent to share their data with third parties as a condition of signing up. (Not all consumers may realize they have given such consent, according to the digital privacy advocacy group Electronic Frontier Foundation).”

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The Stitch Fix Secret: Make Shopping Easy

The New York Times: Stitch Fix is a mail-order clothing service that offers customers little choice in what garments they receive, and shies away from discounts for brand name dresses, pants and accessories. Despite a business model that seems to defy conventional wisdom, Stitch Fix continues to grow … To the company’s founder, Katrina Lake, success comes down to delivering what consumers want: making it easier to shop … In her view, what was important was helping customers find clothing they liked without taking lengthy shopping trips and returning dozens of items.”

“At the company’s warehouse, Eric Colson, formerly a top data scientist at Netflix, spoke to the role that data science — once the province of high-tech giants — plays in nearly every aspect of the Stitch Fix business. Mr. Colson excitedly illustrated on whiteboards how the company’s systems can narrow down a broad range of women’s pants to a relative few that each individual customer is statistically likely to keep … Algorithms have even cut the number of steps needed for workers to pick out clothes for individual clients.”

“Yet the question remains whether customers who are initially thrilled by receiving a customized box of clothing will remain customers for months or even years … Stitch Fix executives declined to share their retention statistics, but claim that they are above industry averages.”

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Jet.com Tells Fresh Story In Real Life

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Business Insider: “Jet.com — the online retailer that Walmart bought in 2016 for $3 billion — is now selling some of its products IRL. From May 10 to June 18, Jet will have a food-themed concept shop in Manhattan which showcases artisanal accessories, cookbooks, and kitchen appliances. Most of the items are pretty quirky, like face masks made from tomatoes, kale-flavored chocolate bars, socks with ice cream prints, and banana-shaped flasks.”

“The Jet experience comes to life at Story, a 5-year-old retail space that changes its products, decor, and events programming about every month based on its particular sponsor. For the next six weeks, the sponsor is Jet, where people can also find most of the store’s items. The larger goal of the temporary store is to raise awareness around Jet’s grocery delivery service.”

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Greats Sneakers Pop-Ups: All You Need is Wi-Fi

Wall Street Journal: “Greats, an online sneaker brand founded in 2013, plans to open at least 10 locations over the next two years by signing short-term leases ranging from three months to one year … The Brooklyn-based brand, which sells sneakers ranging from $50 to $200, manufactures most products in Italy and markets them directly to consumers online. It has tested three temporary stores since 2014, most recently a location in Williamsburg, Brooklyn, that was open for one year.”

“Greats is targeting locations between 700 to 1,000 square feet—about the size of a coffee shop—primarily in urban areas. One challenge for online brands is to ensure that new locations increase sales, rather than cannibalize existing business.” However: “Online apparel brands are finding that they don’t need much to set up a store. The evolution of point-of-sales technology means that transactions can now be made on phones and tablets. Some newer retailers don’t even keep much inventory.”

“Greats sells eight core styles of shoes in different colors and materials, making its business more mobile than that of a traditional retailer. At its new locations, the company plans to bring its own interior elements such as shelving, greenery and lighting.” Rachel Ulman of Greats comments: “You can do a lot within four walls. All we really need is some Wi-Fi.”

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Who Will Win The Retail Race?

The Wall Street Journal: “Can physical retailers build intimate digital relationships with their customers—and use that data to update their stores—faster than online-first retailers can learn how to lease property, handle inventory and manage retail workers?”

“It isn’t hard to picture today’s e-commerce companies becoming brick-and-mortar retailers. It’s harder to bet on traditional retailers becoming as tech savvy as their e-competition.”

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Facebook Chatbots Test ‘Conversational Commerce’

The Washington Post: Mastercard “has partnered with Subway and two other major merchants to launch ‘chatbots,’ which are robots that simulate human conversation. The Subway iteration allows you to order a custom sandwich for pickup, something of a digital version of walking down the chain’s sandwich assembly line.” Cheesecake Factory “allows shoppers to purchase and send out gift cards.” FreshDirect lets shoppers “place orders for groceries and meal kits. The bots will be found within Facebook’s popular Messenger app, and will be powered by Masterpass, the credit card giant’s digital wallet.”

“The debut of the bots will provide a fresh test of shoppers’ appetite for what the industry has dubbed ‘conversational commerce,’ the idea of making a purchase or other customer service transaction through A.I.-powered messaging … Consumers are spending more time online, and yet they are concentrating those minutes in a very limited number of apps. Retailers … are realizing that the best way to snare your interest online might not be with a killer app of their own, but by creating bots that live in the apps that you already use.”

“Facebook has said that more than 33,000 bots have been created for its Messenger app so far. This latest batch demonstrates how differently businesses are approaching the technology at this early stage of the game.”

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Neiman Markups: Out of Fashion

The Wall Street Journal: “Once upon a time, all Neiman needed to do to lift profits was raise prices. That model has since fallen out of fashion … competition from startups like Farfetch.com and Matchesfashion.com are forcing more discounts. Over a recent 24 hours, Farfetch’s prices averaged 2% lower and Matchesfashion’s 15% lower than Neimanmarcus.com’s prices on 32 identical items, according to price-tracking firm Market Track LLC.”

“While brands still exert control, particularly over the newest and most popular items, it is harder for them to police prices that change rapidly across websites and fluctuate with shifting exchange rates, industry executives said … The explosion of discount chains, led by T.J. Maxx , that sell designer brands at cut-rate prices also made consumers rethink the need to pay full price. To compete, high-end department stores rushed in with their own off-price chains—Neiman’s Last Call, Saks Off 5th and Nordstrom Rack.”

“Neiman’s Chief Executive Karen Katz … championed a line of specialty stores called Cusp, which Neiman opened a decade ago, that feature lower-priced clothing and accessories. Neiman stores also have added relatively less expensive goods, such as $700 Prada handbags … Ms. Katz reduced snob appeal by allowing Neiman shoppers to use Visa and Mastercard … Neiman has invested heavily in e-commerce … Not all the moves have worked. After building six Cusp stores, Neiman closed two and stopped development of the chain in 2012.”

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Disconnect: What Do Shoppers Want From Digital?

Quartz: “To determine if brands have a handle on what shoppers want from digital interaction, IBM’s Institute for Business Value surveyed upwards of 600 executives from a range of global businesses currently introducing new digital customer-experience (CX) tools. It also surveyed more than 6,000 consumers about their attitudes and experiences with digital interactions. It then compared the responses of the two groups to see how well they aligned. The result: They didn’t match up well at all.”

“Executives, for instance, believed the top two factors driving people to use digital customer-experience technologies were a desire for more control over the interaction and a general increase in digital savvy. The top two driving factors consumers identified, however, were speed and convenience. At least according to IBM’s survey, consumers want their online experience to make things easier for them, and aren’t much interested in technology for its own sake.”

“Many also just aren’t impressing shoppers. For instance, about 70% of consumers surveyed who had used virtual reality to explore products, mobile apps that work in a company’s physical store, or voice commands through a computer or phone to engage with a business felt disappointed with the experience and decided not to use these technologies regularly. Many found them inconvenient, confusing, or hard to use.”

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Concept Stores: Retail in Real Life

Quartz: “From Story in New York to Merci in Paris, the well-curated “concept store” has become the shopper’s favourite around the world, blurring the lines between the retail space and the cafe, with elements of an art gallery or a design studio in between. In these stores, customers are invited to spend time in the space, beyond just buying a product, and that approach is gradually spreading through India, too.”

“Take Nicobar, the breezy apparel and home decor offshoot of Good Earth that launched last year … Inside, the customer is greeted with a breath of fresh air and an island vibe, fitting with the brand’s design ethos, as well as a small collection of seasonally-appropriate minimalist clothing, alternating with quirky accessories and home decor items … A giant communal table dominates the upper level of the space, where customers are encouraged to take a seat to work, chat or just read a book from the curated selection on the shelve … A small desk lined with postcards and stationery sits next to a working postbox, so you can send friends a little note while shopping. And there’s also a photo booth, equipped with funky backdrops, for visitors to pose with the clothing of their choice.”

Nappa Dori “operates six stores, including a 1,200-square feet space in Mumbai’s Colaba neighbourhood. Here, pop-coloured trunks, leather satchels, and travel accessories are artfully arranged front and centre, but the space also has a coffee corner serving fresh brews, and a spot for customers to sit and peruse the selection of books and indie magazines on offer … While Nappa Dori’s products are available for sale on its website, Sinha says 90% of its business comes from its stores.”

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