NRF 2018 highlights
Ice-cold NYC, red-hot NRF 2018. Thirty thousand delegates assembled in New York's Javits Center in mid-January to discuss what’s new and next in retail. The message was clear: Retail isn't dead - it's simply changing - and new winners and losers are emerging as it transforms.
One big winner - Alibaba. In a particularly interesting session, VP Lee McCabe outlined how Alibaba reimagines retail by focusing on three pillars; Context, convergence, and contact.
Context is about using data for smarter decisions. Alibaba uses its data prowess not only to help companies target the right consumers but also to inform their product development. An example is their deal with Mattel. Alibaba advises Mattel on what its next products should look like based on its expansive view of Chinese eCommerce and what’s happening.
Convergence is the interplay between online and offline and how they work together - bridging the functionality and efficiency of online with the effectiveness of offline.
Contact is about making shopping easy, fun and memorable.
The online luxury battle
Luxury conglomerate Richemont paid EUR2.7 Billion to buy the shares of Yoox-net-a-porter (YNAP) it doesn’t already own. It’s a crucial move to help Richemont compete online. And competition is fierce! In 2017, rival LVMH set up their own multi-brand luxury site Le Bon Marche, a daring move that displays their famed brands like Louis Vuitton against rivals such as Gucci and Prada. In parallel, YNAP’s public ‘battle of the business models’ with established rival Farfetch rages on.
Online luxury sales are booming. Currently, they represent 9% of total luxury sales, but Bain&Co expects that figure to swell to 25% by 2025.
Just what Dr. Amazon ordered
Is health-care Amazon’s next big win? The titan caused its usual media frenzy when it announced it will join forces with Berkshire Hathaway and JP Morgan to launch a new healthcare company. It’s unclear whether the company will provide services solely for the trio’s employees or extend to other employees as well.
The goal is to provide a tech-focused healthcare provider that offers affordable, high-quality care. Both Bezos and Buffett have argued that the excessive cost of healthcare is a heavy load to the economy and society at large. It’s a thunderclap move symbolizing corporate America’s frustration with the perilous state of the nation’s healthcare system. The trio wish to create a company 'free from profit-making incentives and constraints'. Other major employers from Walmart to Caterpillar have also tried to untangle the complexity and high costs in recent years.
Markets responded as they usually do when Amazon decides to enter an industry. Shares in Express Scripts, UnitedHealth and Aetna fell 5%, 4% and 2% respectively.
Top 5: What we’re reading
1. How Yoox's mobile app is driving more than 50% of sales. Link
2. Carrefour unveils its vision for 2022. Link
3. With Nyden, H&M tests a brand designed to attract millennials. Link
4. Turning strategy into results. Link
5. WeChat: Mega ambitions for mini apps. Link