Review: Planet Retail’s Report on The Future of Shopping


We lose track of the incremental changes in our culture that digital has wrought. But shopping has really changed.

The core components of shopping — Search and discovery, promotions, prices, inventory, instore browsing, checkout, pickup and delivery, store locations and maps –have each shifted with the rise of Internet access, Wifi, big data and cloud-based payments.

Sometimes, it is hard to keep things in perspective. Amazon and online shopping have certainly had a huge impact on many categories. Most store segments absolutely require online and offline omnichannel strategies.

But did the arrival of “showrooming” – which allow consumers to compare prices on items in store — deeply change shopping habits for most people, most of the time? Will wireless Beacons that help to recognize shoppers and target offers to them change shopping habits for most people, most of the time? Showrooming and beacons are having impacts on shopping, for certain, but fall short of being game changers.

Looking ahead several years, Analyst Natalie Berg at Planet Retail, a UK-based consultancy, has put together her “Future of Retail — 10 Trends of Tomorrow” report. I like the list and report; agree with a lot of it; and wish I had done my own.

Berg notes that shopping trends will mandate fewer locations; more differentiation; specialty stores within big box stores; and – it cannot be underemphasized — WiFi access to not only enable showrooming, but also permit instore mapping, offer targeting, and eventually, click-free checkouts. She goes on to predict the death of card-based loyalty points programs. These efforts will need to fold into new types of mobile- based personalization, including card linked offers and other features – which, to me, are pretty much the same thing but with new skins and capabilities.

She also predicts the death of automatic free shipping, which has made strides towards scaleability, but remains unsustainable. In the future, free shipping should only be applied to incent upsells or promotions.

‘Scheduling: An Anchor for Commerce’ (My New Paper)

Scheduling software programs for SMBs have had their ups and downs since they were initially introduced in the 2008-2009 timeframe. But the emergence of cloud platforms and the use of scheduling as an anchor for loyalty and leads programs suggests the opportunity is ripening. This is the subject of BIA/Kelsey’s latest Insight Paper: Scheduling as an Anchor for Commerce.

Indeed, MindBody, the largest scheduling company, has contracts with more than 42,000 SMBs. It is set to take advantage of its leadership position in a $100 million initial public offering. Opportunities are also suggested by Booker, which claims 90,000 professional users and processes more than 3 million appointments per month across 73 countries and in 11 languages; and by vertically integrated giants such as Intuit.

All in all, more than 75 scheduling programs currently compete for a potential marketplace of 2.6 million SMBs. These include horizontal SaaS scheduling providers; vertical subject specialists; and vertically integrated SMB marketing players that provide a wide range of services.

As the scheduling industry matures, a number of questions are raised:

1. Which types of scheduling platforms are best positioned?
2. Which specific companies will ultimately win in the marketplace?
3. Is scheduling a true SMB anchor, or just one feature in a platform?

We answer these questions in the Insight Paper, including projected business models and best practices. More can be found on the report’s landing page, including the executive summary and information on downloading a copy.

Groupon Joins Food Delivery Wars

Groupon today announced it would join the online food delivery space, acquiring Baltimore-based OrderUp, which has O&O and affiliated delivery service in 40 markets. Most of the markets are college towns, which is a strongpoint for food delivery.

As Crain’s Chicago Business reports, OrderUp — Uber for your Burrito — raised $7 million in 2014 from investors that included former Living Social CEO Tim O’Shaughnessy, who had been an archrival of Groupon. The service was founded in 2009 and has a strong orientation towards buying existing food delivery services, rebranding them and then reselling them as franchises.

Groupon’s move extends its relationships with restaurants and other food providers. It is consistent with its efforts to migrate these advertisers from occaisional deals into its “always on” marketplace, where it enjoys a well-rounded relationship based on the provision of offers, advertising, analytics, payments and Point of Sales.

It had been reported in April that Groupon was seeking to divest its Breadcrumb analytics, payments and Point of Sales business to a competitor such as Square. The acquisition of OrderUp could be less synergistic if Breadcrumb was actually divested.

With the OrderUp acquisition, Groupon will compete against other, more established food delivery companies, including Grubhub/Seamless, Yelp’s Eat24 and Delivery.com. Rather than focusing on winning market share against these players, it seems more likely that Groupon will initially seek incremental sales that support its broader initiatives.

Centro: Boost Demand Side Ads With Full Program, Not Just Programmatic

Chicago-based Centro, which helps provide targeted ad solutions to 13,000 publishers – 4,000 at any given time — says it is refocusing on providing publishers with complete Demand Side solutions that integrate first party data targeting, hyperlocal mobile tools, digital extensions and cross-channel capabilities.

Publishers increasingly want to provide greater reach for their advertisers than they can provide from their own-and-operated (O&O) properties, said Centro SVP Katie Risch and VP John Hyland in a discussion with BIA/Kelsey. “O & O solutions are becoming a smaller share of the mix.”

Centro DSP for Publishers, the new product offering, provides a wide range of mobile, display, video and social campaigns directly through Centro’s platform. An increasing amount of these efforts are automated. “Revenue is going towards self -serve,” said Risch and Hyland. “People don’t go back after they start with self-serve.”

To be sure, programmatic – an automated process of planning and placing ads on the platform – represents a big part of Centro’s evolution. Centro has committed 18 buyers specifically to support programmatic. But programmatic needs to be supported with other pieces.

“We are in an early iteration of programmatic,” said Risch and Hyland. It helps to “close the loop.” But “it doesn’t do enough to support the demand side of the business, which is critical for local targeting. The biggest challenge is how to drive demand. There has to be a human layer; a set of KPIs.”

Centro’s Brand Exchange, for instance, has enlisted 1,400 publishers. It allows auto dealers and other SMBs to call on the company to meet their needs for local inventory. With such services, “we are providing a cohesive media strategy, along with first party data.”

Benzing’s MyNeighbor Provides Household Items for On Demand Rentals

The last player standing in the hyperlocal neighbor wars might be considered NextDoor, which has raised over $210 million from several major VCs on the basis of converting a mountain of neighborhoods and neighbors to targeted advertising dollars. We’d like to see an update on Next Door’s volume and frequency of usage — it is a little befuddling to us –but assume the VCs think they are on to something. There is also the sense that it could be developing an entirely new ecosystem.

Now hoping to tap into a NextDoor-like ecosystem is a Local On Demand Economy (LODE) service named MyNeighbor, which enables people to rent and pay for items from enrolled neighbors. THe items conceiveably range from baking equipment to strollers to power tools. The service is the brainchild of local vet Brendan Benzing, who has led a number of local initiatives for AOL Digital City and InfoSpace before a more recent tenure in the music business with Rhapsody.

Benzing tells us the Seattle-based service is primed for millennials who don’t want to own things and expect to be able to rent on demand on the same basis as AirBnB, ZipCar, Lyft and other LODE services. “They represent the power of true peer-to-peer,” he says.

If services like MyNeighbbor are going to be successful, “they must first compete on the basis of cost and supply,” adds Benzing. And that will depend on getting a high penetration in specific neighborhoods, hence an initial, highly-concentrated effort on community-oriented neighborhoods of Seattle. “A digital presence within a neighborhood is a welcome sign for MyNeighbor, whether it is Nextdoor, a Facebook/Yahoo Group, or even List-serve,” says Benzing. “The fact that neighbors are connected digitally indicates the neighborhood is likely a more fertile place for MyNeighbor to grow and prosper.”

On Demand is New Focus for Some Home Service Providers

Competition in the home services leads space has been heating up – and so are the tensions. Just this week, Angie’s List has filed suit against Amazon, contending that Amazon Home Services has been egregiously signing up for the member’s- only service around the U.S., and grabbing proprietary service recommendations.

On Demand home services is something that several of the companies are hoping to differentiate themselves with. We saw it with HomeJoy at our LODE event a couple of weeks ago in San Francisco. Home Advisor has also been rolling out its Instant Booking on demand service.

Mizamin, an Israeli Startup with international ambitions, also hopes to get ahead with on demand home services. Its mobile app has gotten 200,000 downloads in Israel, mostly generated from a small social media ad campaign and word of mouth. CEO Yuval Aronov told us that providing home services on an on demand basis has some quirks to it. Many home pros resist keeping to real schedules and are eager to take jobs as they come up. On the other hand, certain types of jobs, such as pest control, need to be scheduled in advance.

Mizamin has built an App that enables multiple providers to receive queries in real time. When a plumbing assignment goes out to Mizamin’s roster of 40 plumbers in Tel Aviv, three-to-six usually answer, he says. The biggest channel for most plumbers have been SMS. “Some don’t use their smartphones professionally,” he says. “They are afraid to drop them in the toilet.”

eBay Sells Off Craigslist Stake

eBay’s one-time dream of anchoring its large classifieds/marketplace business with Craigslist as now officially ended. Last week, eBay accepted a cash buyout from Craigslist for its 28.4 percent stake, allowing eBay to focus on splitting off its multi-billion dollar PayPal division as a separate company.

eBay isn’t disclosing what it received for its stake, but it is likely to be at least 10x what it sunk to buy into Craigslist, or $320 million. Aim Group analyst Peter Zollman notes that Craigslist has plenty of cash in the bank to pay for those shares, with estimated profits of $304 million in 2015, or nearly 2.5x more than its $130-140 million profit in 2013. The surge in profits occurred as Craigslist started charging auto dealers for used auto ads, in addition to its fees for apartment, recruitment and escort listings in certain markets. Other parts of the site remain free.

eBay had purchased its stake in 2004 for $16 million from one of the Craigslist’s early employees. It initially sought a friendly relationship with the Craigslist leadership, paying founder Craig Newmark and CEO Jim Buckmaster $16 million for goodwill. In exchange, it was awarded a board seat.

In theory, the relationship could have worked. eBay was one of the only dotcoms to successfully build community into its business model . Publicly, it remained a company that was dedicated to “community first.” In reality, however, that may have been an earlier version of eBay. At the time of the deal, eBay had already begun focusing on hyper-efficient services – unlike Craigslist’s avowedly lowtech, small revenue approach. It had also started charging higher fees on most items, and focusing more on profits than on building a viral, Craigslist-like community. It also was focused on a number of big dollar paid classifieds and vertical areas, especially eBay Motors.

By 2008, relations between the two companies dissippated into a number of lawsuits and counter-lawsuits, as eBay set in motion a plan to launch its Kijiiji classifieds as a Craigslist clone – apparently as a hedge in case it wasn’t able to assume control over Craigslist. Later, in court documents, it was revealed that eBay had passed along confidential board information to the Kijiiji team.

Ultimately, Kijiiji – now eBay Classifieds in the U.S. — never broke out as a person to person classifieds success, although it is the leading classifieds site in Canada and has a good presence in many countries. Even if does not serve as an effective P2P anchor for classifieds, eBay has become one of the leading online classifieds sites in the world, with major international properties such as eBay Kleinenzeigen, Marketplaats, Gumtree and LaQUo.

While eBay may ultimately be more focused on its enterprise businesses, former CEO Meg Whitman’s 2006 description of classifieds as eBay’s “lead generation, advertising based model” still holds true. As for the future of Craigslist, we’ve noted press reports in The Wall Street Journal and others suggesting that Craigslist has been made obsolete by the emergence of smart phones and lost its chance to become a major ecommerce player. The latter part may be true – Craigslist is hardly poised to compete in the goods value chain against Amazon, Google, eBay and others. But it remains the global leader in person-to-person online classifieds, and there is no reason to suggest that it won’t remain the leader.