Profits Eat the App-etite for Delivery Services

The New Yorker: “In 2016, delivery transactions made up about seven per cent of total U.S. restaurant sales. In a research report published last June, analysts at Morgan Stanley predicted that that number could eventually reach forty per cent of all restaurant sales, and an even higher percentage in urban areas and among casual restaurants, where delivery is concentrated. Companies like GrubHub maintain that the revenue they bring restaurants is ‘incremental’—the cherry on top, so to speak, of whatever sales the place would have done on its own.”

“They also argue that delivery orders are a form of marketing, exposing potential new customers who might convert to lucrative in-restaurant patrons. The problem is that as consumers use services like Uber Eats and Seamless for a greater share of their meals, delivery orders are beginning to replace some restaurants’ core business instead of complementing it … And, as delivery orders replace profitable takeout or sit-down sales with less profitable ones—ostensibly giving restaurants business but effectively taking it away—the ‘incremental’ argument no longer holds.”

“DoorDash, an Uber Eats competitor, has started to experiment with leasing remote kitchen space to restaurants so that they can expand their delivery radii. If such practices catch on, it’s easy to imagine a segment of the restaurant economy that looks a lot like, well, Uber, with an army of individual restaurants designed to serve the needs of middle-man platforms but struggling to make a living themselves.”

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Retail Theater: The Shellfish Spa

Supermarket News: “Retailers say making the shopping trip an experience is one way they can drive traffic into their stores. And a little theater in the seafood department is actually helping to drive sales, according to one Northeast retailer, Shoprite, which has added the Shellfish Spa. The device preserves live product such as clams, oysters, mussels, steamers and cockles while presenting them in an eye-catching display. The container bathes shellfish in a continuous stream of saltwater and maintains an ocean-like environment for peak freshness.”

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Drone Promo: The Kentucky Flying Object

The Verge: KFC’s “new, India-only Smoky Grilled Wings will come packaged in a box with detachable drone parts. Although customers will have to look up instructions online, they can eventually assemble the box and its parts to turn it into a Bluetooth-connected drone.”

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‘Stealing’ at the Amazon Go

Nick Wingfield: “There were a little over 3.5 million cashiers in the United States in 2016 — and some of their jobs may be in jeopardy if the technology behind Amazon Go eventually spreads. For now, Amazon says its technology simply changes the role of employees — the same way it describes the impact of automation on its warehouse workers … Store employees mill about ready to help customers find items, and there is a kitchen next door with chefs preparing meals for sale in the store. Because there are no cashiers, an employee sits in the wine and beer section of the store, checking I.D.s before customers can take alcohol off the shelves.”

“At Amazon Go, checking out feels like — there’s no other way to put it — shoplifting. It is only a few minutes after walking out of the store, when Amazon sends an electronic receipt for purchases, that the feeling goes away.”

“A big unanswered question is where Amazon plans to take the technology. It won’t say whether it plans to open more Amazon Go stores, or leave this as a one-of-a-kind novelty. A more intriguing possibility is that it could use the technology inside Whole Foods stores … There’s even speculation that Amazon could sell the system to other retailers, much as it sells its cloud computing services to other companies. For now, visitors to Amazon Go may want to watch their purchases: Without a register staring them in the face at checkout, it’s easy to overspend.”

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Are You Smarter Than a Kohler Toilet?

The Wall Street Journal: “For some innovators, the next frontier is the room in your house most likely to have a lock on the door: the bathroom. Showcasing their goods at this year’s CES tech show, these companies acknowledge a need for privacy in that inner sanctum—then proceed to show off cameras, microphones and other sensors they’d like you to install there … consider a mirror that turns on motion-activated lights when you get up in the middle of the night, or tells you the weather in the morning. Consider setting the shower on to the perfect temperature just by asking, before you climb in. There are even ‘intelligent’ toilets in the works though how intelligent they’ll be remains to be seen.”

“Some startups see the bathroom the way others now look at the automobile: ready for an open-platform operating system of its own. CareOS—a subsidiary of a French firm which also owns connected toothbrush maker Kolibree—designed an entire health and beauty hub … While a camera in the bathroom sounds like something you’d want to cover with duct tape, CareOS chief technology officer Ali Mouizina says all of your data is stored locally. The system won’t even share it with any other smart home or media hubs in your house, unless you want it to. After all, he said, the bathroom is ‘a private place, a very special place’.”

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Ling Shou Tong: How Alibaba Helps Mom-and-Pops

Quartz: “Alibaba has its sights set on a new goal: to bring its cloud-computing technology to all of China’s 6 million mom-and-pop convenience stores. In the process, it’s building out its physical footprint to tap into the 85% of the country’s retail sales that don’t yet happen online. Alibaba is using a retail-management platform called Ling Shou Tong (which roughly translates to ‘retail-integrated’) to help store owners optimize product procurement and boost sales.”

“Ling Shou Tong’s app gives store proprietors recommendations, based on sales analytics, on what to buy and how to display goods in their stores. In the background, it uses Alibaba’s cloud-computing and logistics businesses to create a digitally connected inventory-management system. Store owners can also use the app to place orders, fulfilled by Alibaba and shipped directly from its warehouses, eliminating the need for middlemen.”

Mom-and-pops have given mixed reviews about the impact Ling Shou Tong has had on their bottom line so far. Some say the storefront decorations and in-store training accompanying the platform’s adoption provides a cosmetic facelift to their stores and makes running them easier. Others worry that relying on Alibaba’s product selection forces them to directly compete with the convenience of online shopping.” However, Alibaba CEO Daniel Zhang comments: “We’re working to make the net in the sky and the net on the ground. We will cover all consumers seamlessly.”

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Crypto Pop: The Future of Music?

BBC: “The year is 2018. Music is changing fast, but can the humans keep up? Here’s a handful of possible outcomes. 1) Your favourite singer is not real: … One of Japan’s biggest pop stars Hatsune Miku is not a real person. But that small detail didn’t prevent the humanoid singer from releasing another new music video last week.” Roy Orbison “died in 1988 but now his 3D hologram world tour will come to life, alongside the Royal Philharmonic Orchestra, on 8 April in Cardiff.”

“2) The live parameters have shifted: Ben Robinson of Bluedot Festival comments: “Now people can experience being on the stage with the artists. Or the gig could move off the stage.” 3) “The recording studio is in your laptop: Noel Gallagher … never actually met the bass player on his new album Who Built The Moon?” He comments: “Here I am at two in the afternoon talking to a guy on an iPad and for him it’s four in the morning and I can hear the song coming through his speakers and he’s saying ‘What do you think of this? Maybe if I do that?’ And I’m like ‘this is so far out it’s unbelievable’.”

“4) There’s a direct line between you and your favourite act: Jack White’s Third Man Records reward their subscribers with deliveries of exclusive limited edition pressings. DJ Gramatik went a step further last week by becoming the first artist to ‘tokenise’ himself, meaning fans who buy the token using the cryptocurrency Ether can potentially share in his future revenue … 5) But new music technology will not be for everyone:Bass player Peter O’Hanlon says: ‘Our fresh approach will be that we just come and play the gig! Everybody else is flying across the stage and we just stand in front of you and play’.”

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Delta CEO: Technology Builds Relationships

Business Insider: “Some airlines see technology as a potential money maker by turning their planes into flying e-commerce platforms with hundreds of captive customers. Delta Airlines CEO Ed Bastian said he isn’t interested in going down that route. Instead, he wants technology to help his airline better understand and interact with its customers. In turn, improving the flying experience and strengthening Delta’s core business.”

He explains: “We are in the business of building relationships and our technology allows us to build intimate relationships with 180 million customers a year and you can only do that through technology.”

“Bastian’s big tech goal in 2018 is what he calls ‘building a single view of the customer.’ That means unifying all of Delta’s various customer databases to create a more holistic view of and a better understanding of the people who fly with the airline.” He comments: “The real opportunity for us is to get a better view of who you are so that we can better serve you. We can get you what you need before you even realize you need it and be able to better take care of your needs not just from a sales standpoint, but more importantly, from an experience standpoint.”

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AI Machines as Managers

The Wall Street Journal: “There is evidence computers may be better suited to some managerial tasks than people are. Humans are susceptible to cognitive traps like confirmation bias. People using intuition tend to make poor decisions but rate their performance more highly, according to a 2015 University of New England analysis of psychological studies. And in an increasingly quantitative business world, managers are asked to deliver more data-driven decisions—precisely the sort at which machines excel.”

Tomas Chamorro-Premuzic, a professor of business psychology at University College London, comments: “What managers do mostly is identify potential, build teams, assign tasks, measure performance and provide feedback. Generally speaking, humans aren’t very good at these tasks. Someday, we might not need managers anymore.”

“Companies that make and use workforce-management software … say machines are no substitute for human judgment and ability to manage interpersonal relations. Instead, they say their software speeds up administrative work and uses data to help human managers improve decisions they previously made only by drawing upon gut instinct and experience … Sue Siegel, GE’s chief innovation officer, said she wouldn’t rule out one day working for a machine.” She comments: “If the robot has personality and a sense of humor and can understand the human condition, hey, who knows?”

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Merry ModelXmas!

Boing Boing: People who drive Tesla’s Model X have a cool ‘easter egg’ feature built right into their vehicle: a holiday music and light show set to the tune of Trans-Siberian Orchestra’s “Wizards In Winter”! When activated, this all-electric luxury vehicle will display a synchronized show using the car’s headlights, turn signals, and falcon wings.”

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