Better deliver fast and free or lose the sale!

By Jeff Berman, Group News Editor · March 14, 2018

When it comes to United States-based consumer preferences as they relate to home delivery shopping, one thing is clear: consumers want deliveries reaching their destination faster than they have in the past, and they view free shipping as a major benefit along with other shipping options, too.

Those are some of the takeaways from the recently-released "Home Delivery Shopping Survey" issued this week by global consulting firm AlixPartners. Data for this survey was based on feedback from 1,015 adult US consumers, across all regions, demographics, and income levels, with the survey’s objective being to understand consumers’ behaviors and preferences of ordering products from home for delivery.

Not surprisingly, the report noted that the impact of free shipping has a major impact on purchasing decisions for consumers. And the numbers bear that out, too, with 73% indicating it “greatly” impacts ordering decisions (in line with 75% in 2016 and up from 69% in 2014), with 23% noting it “somewhat” impacts ordering decisions, with another 4% that do not view it as a condsideration.

While the preference for free shipping remains firm, the maximum acceptable delivery time consumers are willing to accept in order to receive free shipping continues to trend down, which is not surprising given the ongoing uptick in e-commerce activity, coupled with consumers continually getting more comfortable shopping from their computer or mobile devices.

In 2018, the maximum allowable delivery time for free shipping was 4.1 days based on the survey’s findings, continuing a downward trend over the past few years, with 2016 at 4.8 days, 2014 at 5.0 days, and 2012 at 5.5 days.

“Back when we started doing this survey in 2012, we did not expect consumer preferences to change as rapidly as they have, and I would argue that maybe executives in the retail sector did not expect that either,” said Marc Iampieri, managing director at Alix Partners, in an interview. “It [the maximum allowable delivery time for free shipping] has gone down half a day every two years, or a quarter of a day every year. If you trend that out a few more years, all of the sudden everybody is expecting free shipping within two days. That poses physical limitations, and you cannot defy the laws of physics or the interstate highway system. What this means is that as consumers are expecting things faster, you have got to provide those products and distribution centers closer to where the population exists.”

That last point, he said, rings especially true as it relates to home delivery in places like the Northeast, he said, considering how that is a region, where, for example, cars and other commodities are not manufactured, but there are a lot of consumers there. And this, in turn, has led to values for commercial real estate facilities continuing to rise, and allows those goods to be close enough for a reasonable transportation costs to fulfill customer demand via last, or final, mile logistics.

What’s more, when global retail and logistics leaders set policies and consumers immediately accept them, which sets the standard for others to follow.

“There have been announcements by some large retail players in the U.S., stating they have changed their policy to more match one of their competitors,” said Iampieri. “It is pretty linear…but you cannot go across the country in two days without a lot of expenses, and that is clearly not built into the model in terms of what the freight costs are, especially for products less than $10. This provides a good opportunity for retailers to say ‘here is what I offer for immediate consumption,' and it is high volume and worth that prime real estate near major metropolitan areas. This is also an ‘endless aisle’ of everything else in retail, where you have to wait longer for things.”

This includes the key items being bought at the highest velocity, which, he said, is akin to the eye-level shelf in stores in the past, with those items able to be substituted for short-term shipping of 1-2 day or same-day, with everything else in more regional or centralized distribution centers. This approach, though, is quickly changing, and as logistics professionals plan out their network models, Iamperi said, adding that these are things that are becoming more important.

Another telling home delivery statistic in the survey highlighted how 58% of respondents completely or mostly agree that available shipping methods drive how they browse products online, which is up from 51% a year ago.

“As long as there are solutions and offerings out there that can satisfy this demand, I think the customer are going to reposition their mindsets to say as long this is standard and available and not cost-prohibitive, they are going to get accustomed to it,” said Iampieri. “How sustainable it is remains a valid question, but until the market leaders decide it is really becoming cost-prohibitive to do so and maybe that means going to one-day shipping, it becomes exponentially more expensive for the entire supply chain to be able to support that, and that is what makes it become a limiting factor.”

Iamperi said he was surprised by those results in that how many people make decisions about what they are going to buy initially based on the product being bough and shipped in a certain way while eliminating products that do not fall into that category.

While many of the items frequently purchased online such as clothing and shoes, books, food, cleaning supplies, and pet supplies, among others, have remained consistent over the years, Alix found that there has been increased interest in larger items like home furnishings and furniture, with the percentages of consumers looking to buy more of those types of goods online in the next 12 months heading up.

“This is a fundamental shift from the past when people said they would only buy things like food, clothes or electronics online and shipped to their homes, which has become the second coming of the milkman,” said Iampieri. “Furniture and white goods typically have always been delivered to homes…but now people are buying these things online sight unseen. The barrier of delivering big and bulky things to homes seems to have been broken.” 

Among its final conclusions in the report, Alix noted that retailers and logistics providers that can accommodate customer home delivery shipping preferences will be better positioned to retain and gain market share of the fastest growing segment in retail commerce.

“The first thing to accept is that you cannot be everything to everyone,” said Iampieri. “You have got to be segmented in what you are offering so if you have something that has to be immediately replaced or you forgot about something you needed to buy and are short on time, you need something that is available now. That is one solution needed. There is also a solution needed for people who have become accustomed to very fast free shipping, with a limited selection for that and a logistics network that can support it. There is also the strategy of offering a very broad assortment or slow-moving items, which can be a different strategy with a longer lead time that allows people to match the selection you are going to offer to the service level and match appropriate costs for that, where it is all profitable business. Trying to offer everything to everyone at the very rapid two day or less free shipping is not a very profitable proposition. That is where the different players come in. Other than traditional parcel delivery, which is limited by size and weight, the final mile larger delivery has been challenging from a profitability standpoint. There are lots of different providers out there doing it, and there has been a changing of hands of different pieces of business doing home delivery of larger goods and it is tough. But it is a growing piece of the business and as this becomes more commonplace and customers embrace it where there becomes more density, you will find that those that make a commitment to being a player in that space have more market share in key regions and will start to move pricing up to where it can become more profitable. It is a fragmented industry now and it is tough to make money in it.”  

E-Commerce is surging ahead at a fast pace..be there now

By MMH Staff · May 7, 2019

According to a new report from global consulting firm AlixPartners, consumer-products (CP) companies are grappling with disruption as online sales are forecast to quadruple in the span five years.

The report highlights an ongoing fundamental consumer shift to e-commerce in all its forms, including increasing demand for direct-to-consumer (D2C) sales, resulting in online sales of consumer products in the US growing to 15% of all industry sales, or $175 billion, by 2022—3.6 times more than 2017 levels.

The reports suggest that CP companies in many cases lag other industries in digital transformation, including in e-commerce capabilities.

“Long gone are the days when consumer-products companies could rely exclusively on the power of their brands and their relationships with retailers to drive sales,” said David Garfield, global co-leader of the consumer products practice at AlixPartners and a managing director at the firm. “Companies that don’t act quickly and decisively to implement the right digital strategies, including direct-to-consumer strategies where appropriate, will likely find themselves falling far behind.”

The report also finds that many if not most CP companies aren’t sufficiently focused on both the opportunity and threat a digital future represents. The report analyzes the earnings calls of the 102 largest public CP companies in the US made during the four months leading up to Jan. 24, searching for terms such as “e-commerce,” “direct-to-consumer,” “online,” “Amazon,” and other words suggesting that digital strategies were being discussed. Fully one-third (or 34) of these companies made no reference to these terms in their calls with investors. And middle-market companies with less than $1 billion in revenues were the least likely to talk about digital strategies, with 55% (11 out of 20 companies) failing to discuss this topic in their earnings calls.

The report also notes the e-commerce sales rate of CP companies is currently only about half that of retailers in the US, and that recent combined e-commerce rates in countries like the United Kingdom (19% of all sales in 2017) and China (23% of sales) dwarf US rates—suggesting that the future for US companies is either digitization or decline.

“The fact that many CP companies aren’t even incorporating e-commerce as a key part of their strategic narrative on their earnings calls is very telling,” said Andrew Csicsila a managing director in the consumer products practice at AlixPartners and one of the authors of the report. “A fundamental shift in CP companies’ relationships with their consumers is already underway, and a strategic realignment inside companies is necessary to position themselves for this digitally-oriented future.”

The AlixPartners report goes on to recommend that the key issues CP companies should be focusing on today are: assortment (including product innovation), consumer experience (including timely delivery), supply-chain optimization, opportunistic M&A (including to gain digital capabilities), and organization capability.

More to come soon!

More about robots and industry

TM Robotics recently authored a report investigating which nations are leading the way in the race for automated production. Statistics from the International Federation of Robotics (IFR) show that the number of industrial robots used in production activities is increasing rapidly. However, three-quarters of total robot sales are currently attributed to just five countries — China, the Republic of Korea, Japan, the United States, and Germany.

Asia has long remained the strongest market for robotics. Of the record-breaking 380,550 robot units sold globally in 2017, a significant percentage of these are deployed to Asian factories. In fact, the region has reported record-breaking robot sales for the past four years in a row, rising by 19% in 2017. Asia has pulled out all the stops to remain at the forefront in this area. In 2015, for instance, the Chinese government announced Made in China 2025 (MiC2015), a national initiative that aims to reboot the country’s manufacturing sector, with the objective of China becoming the world’s largest user of robots.

Similarly, Japan launched its own transformation project in 2017, called Society 5.0. This initiative aims to go beyond Germany’s 2011 Industry 4.0 initiative by considering the challenges that these new technologies will bring to society, rather than focusing solely on their use in manufacturing. 

According to the World Robot Statistics, the world’s average robot density is 74 robots per 10,000 employees. The United States sits comfortably above this, at 189 robots per 10,000 employees. In 2016, the country began to climb the robot-density ranks, and today comes in at seventh in the world, behind South Korea, Singapore, Germany, Japan, Sweden, and Denmark.

This figure has been significantly boosted by the modernization of U.S. production facilities, as well as the growing demand for products made in the United States. What’s more, robot sales in the U.S. are expected to increase by at least 15% per year between now and 2020.

Europe, the world’s second-largest market for industrial robot sales, has also increased its volume of robot deployment. Purchasing 56,000 units in total, the continent reached a new peak for robot sales for the third year in a row. That said, much of this deployment was attributed to Germany, currently the fifth-largest robot market in the world. Much of Europe’s deployment of robotic technology is related to the automotive industry. It’s therefore no surprise that the greatest champions for robotics in Europe are those with a strong automotive presence — Germany, Italy, and Sweden.

Automotive manufacturers have long used six-axis robots throughout production. Looking to the future, increasing the volume of robot deployment will rely on the small- to medium-sized companies also investing in automation.

To reach this market, industrial robots must become more accessible, in relation to both cost and user experience. The results of TM Robotics’ "Global Robotics Report," which will be released in 2019, stated that simple programming was one of the most important features when choosing a SCARA, Cartesian, or six-axis model, with 79% of respondents naming this as a top-five consideration.

Easy robot programming is not only an attractive feature for new users, but also provides established users with reduced programming time. Growing demand for easily programmable robots is also evident in the rapid increase in sales of collaborative models — robots that can work without protective barriers between machine and employee.

Collaborative robots, or co-bots, currently account for 3% of the total robotics market, but this figure is expected to reach 34% by 2025. Although these machines have been marketed as easy to program, they should not be considered a complete alternative to traditional industrial robots.

While co-bots do boast some impressive responsive features, these machines generally cannot tackle the dangerous, repetitive, and heavy-duty tasks usually associated with industrial robots — and respondents to the "Global Robotics Report" agree, with 55% saying that they do not believe co-bot technology is advanced enough to deliver the performance required for manufacturing, and a further 25% saying that they are unsure of these co-bots' capabilities.

There is no one-size-fits-all solution for automating a facility. While growth in the co-bot market shows that co-bots may indeed be an ideal first step toward automation, there’s more than one route to deploying robotics in an industrial facility.

Unlike the first industrial revolution, today’s manufacturing industry is fiercely competitive. Not only are nations aiming to increase the volume of robots they deploy in their facilities, but new types of robotic technologies are emerging every day to take on new tasks and operations. The IFR predicts that the industry will experience another boom in 2019, with an estimated 2.6 million robot units set to be deployed. There’s no denying that Asia is currently dominating the robotics market, but with such rapid changes happening in a relatively short period of time, there’s good opportunity for other nations to catch up.

Image credit: PopTika / Shutterstock.com

Interesting facts

Solid-state batteries have long been heralded as The Next Big Thing after lithium-ion, with companies from all quarters racing to get them into high-volume production. Dyson, BMW and car manufacturer Fisker are just a few names that have been working on the tech for the last few years, but now, reports suggest a Chinese start-up might be the first to have cracked it.

According to Chinese media, Qing Tao Energy Development Co, a startup out of the technical Tsinghua University, has deployed a solid-state battery production line in Kunshan, East China. Reports claim the line has a capacity of 100MWh per year -- which is planned to increase to 700MWh by 2020 -- and that the company has achieved an energy density of more than 400Wh/kg, compared to new generation lithium-ion batteries that boast a capacity of around 250-300Wh/kg.

Details beyond this are sparse. The headline news here, if accurate, would be that the company has managed to put solid-state batteries into high volume production, but it's not clear how Qing Tao Energy Development has achieved this, nor what price points are involved. Furthermore, while a capacity of 100MWh is not to be sneezed at, it still only equates to fewer than 2,000 long-range EVs per year. Nonetheless, the news demonstrates that progress is happening in the solid-state battery arena. We might not feasibly yet be at high volume production, but we're on our way.

Via: Electrek

Your data security

This is a nice article and is very serious:

In the age of digital technology, the biggest asset any company has is its data. But despite hearing that fact repeated over and over, organizations often haven’t a clue what their data is worth. That’s no surprise, considering how difficult it is to measure the value of enterprise data without generally accepted accounting principles.

However, knowing the value of your data is extremely important for determining your cybersecurity measures. Insurance policy estimates also rely on value, so operating in a vacuum where we know only that data is “valuable” can be problematic. How can you calculate how much your company’s data is worth?  

Finding the True Value of Your Data  

There are actually several ways to determine the value of your data in practical terms. For example, you can estimate the costs of replacing all the data that you have; you could try measuring how much data contributes to your organization’s revenue; or you could figure the income made by selling or renting your data if you were to turn it into Data-as-a-Service. However, calculating data value in these ways can be complex if your organization lacks deep analytic capabilities. 

Figuring Data Value by the Costs of a Breach  

One valid and intelligent way to measure the worth of data is by examining the costs of a data breach. According to the Ponemon 2018 Cost of a Data Breach report, the average loss to the company caused by an attack is $148 per compromised record. 

That means for breaches in which more than 50,000 records are compromised, damages could reach $6.9 million. Even that is nowhere near the scale of a truly massive, headline-grabbing  breach: one million compromised records could cost a company up to $39 million!

Securing Data and Its Value to the Company 

The root cause of all this high risk and potentially massive damage is the phishing attack. When you place a quantifiable value on the data that your organization collects and processes, it’s easy to see why cybersecurity must become a top priority. 

Once a phishing attack succeeds in installing malware on your system, your data is threatened by ransomware, theft of vital banking information and corporate credentials, and other crimes.  

This is why Gartner names anti-phishing defense as essential to an overall protection architecture. 

Data breaches are common occurrences, especially when hackers target humans as the weakest link in any cybersecurity system. Gartner notes Verizon’s statistic that phishing and pretexting encompass 98 percent of social incidents and 93 percent of breaches.

Through a phishing attack, a criminal needs for you to make only one miscalculation and click on a malicious link to enable breach of your organization and considerable financial damage. Because of this vulnerability, anti-phishing protection that preempts attacks before they become a threat should be the first course of action and best practice for protecting your organization—far more reliable than trying to train employees.  

Area 1 Security offers the technology-based anti-phishing protection that Gartner recommends as a necessary element of an overall security infrastructure. A dedicated anti-phishing strategy can detect threats in advance and disable them before they reach the inbox. Don’t let a data breach force you to put a costly price tag on your organization’s data—protect that data from phishing and retain its value intact.

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Article by Kim Del Fierro, VP of Marketing for Area 1 Security.

More to coem soon

Joe Rossini

The day of the robot!!!

Here is an interesting yet frighting article about robots and construction!

The HRP-5P is a humanoid robot from Japan’s Advanced Industrial Science and Technology Institute that can perform common construction tasks including – as we see above – install drywall.

While HRP-5P – maybe we can call it Herb? – uses environmental measurement, object detection, and motion planning to perform various tasks. In this video we see it use small hooks to grab the wallboard and slide it off onto the floor. Then, with a bit of maneuvering, it’s able to place the board against the joists and drill them in place.

“By utilizing HRP-5P as a development platform of industry-academia collaboration, it is expected that research and development for practical use of humanoid robots in building construction sites and assembly of large structures such as aircraft and ships will be accelerated,” write the creators.

The researchers see the robot as a replacement for an aging population and a declining birthrate. “It is expected that many industries such as the construction industry will fall into serious manual shortages in the future, and it is urgent to solve this problem by robot technology,” the write. “Also, at work sites assembling very large structures such as building sites and assembling of aircraft/ships, workers are carrying out dangerous heavy work, and it is desired to replace these tasks with robot technology. However, at the assembly site of these large structures, it is difficult to develop a work environment tailored to the robot, and the introduction of robots has not progressed.”

Considering there are 6 million contractors in the US alone, robots like this one could be a boon or a curse. What happens when we can easily replace humans in shipping, logistics, and construction? Let’s just hope Herb here needs a supervisor.

More to come!

Joe

Automation on all levels of life is growing

Automation, it over the centuries has been a dirty word for many. Way back the horse so necessary to go from one place to another or to help farm the land gave way grudgingly to the car. The locomotive gave way to the airplane. The old fashion printing system gave way to the big presses. The mail is or has given way to the Internet. The list goes on and on. Today we see the web being used more and more and we are seeing the rise of driverless cars. Hamburgers are being made automatically and kiosks allow you to buy a burger without a person.  Ok, I have made the point and that is life as we know it is changing. Things and work that used to require people are quickly shrinking. The big key is retraining to be able to program or guide those robots and that, for now, is the job to have.

More to come soon.

Joe