New Florence. New Renaissance.

As the NRF Big Show kicks off

As the annual show kicks off in New York, the focus is about how technology is reshaping the retail experience but I found as interesting the latest Monthly Economic Review from the NRF’s Chief Economist, Jack Kleinhenz, especially the economic data he summarizes. Inflation, supply chains and COVID continue to muddy the waters but as he summarizes  

"Consumer spending propelled growth in 2021 and will continue to be a bright spot as 2022 unrolls. The current recession recovery cycle is very different from previous ones. Consumers have never been as wealthy as they are today. In fact, consumer wealth grew an additional 18.1 percent year-over-year in the third quarter, keeping well ahead of inflation. If there is one lesson we have learned it is not to underestimate the resilience of the consumer and, therefore, the U.S. economy. With stimulus programs in the rearview mirror, consumer income and spending will instead be fueled by job growth paired with wage gains going forward. That said, the omicron variant could cause households to crunch down. Fed Chairman Jerome Powell recently said “people are learning to live with it” but households have already changed their behavior. Theater performances and concerts are being canceled and universities are returning to remote teaching. Fortunately, we have a lot of tailwind in terms of job growth, spending and production as we turn the calendar to 2022."

Tech to combat shop lifting

The Coalition of Law Enforcement and Retail, a trade association, which Mr. Dugan heads, estimates that organized retail theft accounts for around $45 billion in annual losses for retailers these days, up from $30 billion a decade ago. At CVS, reported thefts have ballooned 30% since the pandemic began.

Mr. Dugan’s team, working with law enforcement, expects to close 73 e-commerce cases this year involving $104 million of goods stolen from multiple retailers and sold on Amazon. That compares with 27 cases in 2020, involving half the total. CVS has doubled its crime team to 17 over the past two years and purchased its own surveillance van with 360-degree cameras and a high-powered telescope.

The corporate investigators charged with tackling the problem are often former police. They tail thieves, compile investigative reports, stalk storefronts for stolen goods and comb through trash outside suspects’ houses. They pore over videos from stores that have been robbed and scour profiles on online marketplaces.

Earlier this year, an e-commerce analyst on Mr. Dugan’s team who looks for sellers hawking high-risk products such as allergy medicine or razor blades identified an Amazon account with over $1 million in suspicious listings. It was linked to a video store in Leominster, Mass. Local law enforcement, working together with CVS and other retailers, arrested the owner of the video store in May.

WSJ (sub required)

Tech in Amazon department stores?

Amazon.com Inc.’s planned department stores will aim to boost its apparel sales by offering shoppers a chance to try on clothes from its own private-label brands in technology-fueled dressing rooms, according to people familiar with the matter.

One idea that has been tested is for customers to scan QR codes of items they want to try on by using a smartphone app and for associates in the store to gather the items and place them in fitting rooms.

Once there, customers could ask for more items using a touch screen, which might be capable of recommending additional clothing based on the pieces shoppers liked. The rooms could use sliding doors for associates to bring more clothes without seeing shoppers, the people said. Robots or other forms of automation could eventually be deployed in the stores, one of the people said.

WSJ (subscription required)

 

SAP Industries - "Shark Month"

Over the last month, on the Deal Architect blog I have run 8 Analyst Cam episodes of SAP Industry leads presenting trends in their sectors and how SAP and startup partners are delivering to those trends

• Direct to Consumer with Paul Smith
• Circular Economy trends with Natasha Pergl
• Automotive/Mobility trends with Hagen Heubach
• Servitization/XaaS with Torsten Welte
• Utilities with Markus Bechmann
• Retail in 2 parts with Achim Schneider
• Life Sciences with Mandar Paralkar

More to come in December, where Rainer Zinow will profile "micro-verticals" that SAP covers with partners for the SMB segment

Competency-based education

So, after months of discussion, the district switched to competency-based education, a form of personalized learning that emphasizes mastery of skills over time spent in class. At Northern Cass, that means that grade point averages no longer exist. In two years, neither will grade levels. Instead, K-12 students get rated on a four-point scale for each skill, receiving about two new ratings per week. In seventh-grade English, that may mean the ability to hold collaborative conversation. Those who are prepared with questions and open to other viewpoints might receive a three. Leading the conversation and keeping it from stalling out would garner a four.

“We kept coming back to the idea that you couldn’t get world class because the system itself wasn’t designed for that. The system itself was designed to sort kids, to rank kids,” says Dr. Steiner.

WSJ (sub required)

A celebration of trade jobs

Mike Rowe talks about his new show "How America Works"

"This is us taking a single topic like logging and saying, "Okay, maybe you've heard some things about logging. Maybe you have formed some opinions about it." Rather than telling you how to think about the industry, we just introduce you to the regular people who put bread on the table by getting us the lumber we need to build the desk you're sitting at right now and the one underneath this glass, right? We just make it as personal as we can. We do the same thing with energy. We do the same thing with electricity. We go to the Hoover Dam and we just spend a day with people who are trying to repair and maintain the turbines, which provide electricity for about a sixth of the country. We do the same thing with waste management, just by hanging out with some garbage people for the better part of a day.

And people will be surprised by the degree of sophistication that informs all of these vocations. They'll be surprised by the passion that these workers feel for their jobs.

People are very confused about energy in general. And look, this is headline news, right? And the show doesn't try to be political or polemic, but you can't help but make the point: When it comes to energy, a lot of people think about electricity as being fundamentally clean, whereas maybe coal or oil they might think of as fundamentally dirty. What most people don't really understand though, is that their Tesla or their Prius that they plug in and feel great about plugging in, uses electricity and that electricity doesn't come from the electricity tree. It comes from a turbine and that turbine is spinning, and in the vast majority of cases, the energy that's being used to spin that turbine is being provided by natural gas or oil. And so what I hope we learn from the series is the way that we all are truly interconnected. You can't just arbitrage the part of the workforce that makes you uncomfortable in the equation."

Here is an excerpt from his episode on loggers

goTRG's dominance of reverse retail logistics

“Reverse logistics”—the process of handling returned merchandise—has become increasingly complex. Retailers have to determine whether each returned item is fit to go back on shelves, can be refurbished, or must be scrapped. Stores have used disparate technologies and even manual systems to do this, to little effect: Some 5 billion pounds of merchandise go to waste annually. goTRG oversees more than 45 million returned items per year for Amazon, Home Depot, Walmart, and others, using sophisticated software and a fleet of massive warehouses. After integrating specifics about each retailer’s catalogs, goTRG’s artificial intelligence determines the most profitable outcome for every item. Products may be refurbished, donated, recycled, or used for parts—all within goTRG facilities. “Our goal,” says cofounder and CEO Sender Shamiss, “is to convince retailers to give products a second life.”

FastCompany

 

Lennar: reimagining residential real estate

"These days Miller oversees LenX which amounts to a private equity arm within Lennar that makes investments in real estate tech. The I.ennar-backed platform Opendoor—which uses AI to value and make almost instantaneous often on any home—went public in December bringing Lennar a $470 million gain in its first quarter. Other LenX startups provide fully digital insurance underwriting for most Lennar buyers, are developing a digital title insurance and escrow platform; and are honing technology that conserves water and channels the earth’s energy to heat and cool homes."

What's interesting is its not just about fancy smart homes. The pandemic has changed what people want from a home.

"For him, as for tens of millions of Americans, the home of the future isn’t filled with futuristic gadgets, it’s a principal workplace, a gym, a homeschooling center, an entertainment hub, and refuge where everything from pandemic-ready leisure wardrobes to gourmet cuisine can be delivered to their doorstep while they spend quality time bonding instead of fighting traffic and roaming stores, “The pandemic’s rewired the way people think about their homes,” says Miller, “As a result, they’re rethinking the amount of their paycheck to spend on housing. We have a front—row seat seeing in real time the enthusiasm for the home growing.”"

Fortune (sub required)

 

Amazon Brick and Mortar

WSJ report

"The plan to launch large stores will mark a new expansion for the online-shopping pioneer into bricks-and-mortar retail, an area Amazon has long disrupted.

Some of the first Amazon department stores are expected to be located in Ohio and California, the people said. The new retail spaces will be around 30,000 square feet, smaller than most department stores, which typically occupy about 100,000 square feet, and will offer items from top consumer brands. The Amazon stores will dwarf many of the company’s other physical retail spaces and will have a footprint similar to scaled-down formats that Bloomingdale’s Inc., Nordstrom Inc. and other department-store chains have begun opening, the people said."

 

Amazon Fulfillment Center Tour 2.0

Exactly two years ago, I had an opportunity to visit the 855,000 sq ft, 4 level N. Jacksonville Amazon fulfillment center (JAX2). I wrote about my experience here. 

Due to the pandemic, Amazon had stopped doing those tours. However, it has restarted them in virtual mode (you can register here) , and I attended one today. I asked for a recording, and they sent me one from a few days ago, which covered similar ground.

In many ways, the virtual tour is better than going to one in person. They did not allow me to take any photos when I visited. The tour today profiled 4 US centers, and a new one outside of Venice, Italy.  Mine obviously only covered one. Today's tour took us into many corners of the center like the shipping dock which I did not see during my visit. I learned new stuff like the sensor filled vest Amazon employees wear when they have to go into the path of one of the robots. They also provided updates on Amazon's COVID related investments and their growing Prime transportation fleet including big plans for their EV trucks.

Very nicely done. Highly recommend you spend an hour and see the amazing blend of man and machine. Kiva robots, miles of conveyor belts, and thousands of scanners, cameras, printers that allow a couple of thousand Amazon employees at each center to process a million packages a day.