Focus on Drone delivery: The next disruption in grocery
Pizzas could arrive from the sky in New Zealand and perhaps soon in Europe. This is not science fiction but reality. Indeed, Domino’s Pizza Enterprises has announced its partnership with Flirtey, leader in drone deliveries, to launch the first pizza deliveries drone service in the world. The two companies celebrated their alliance by organizing a demo in Auckland, New Zealand on 25 August 2016.
This event marks the end of the approval process by Flirtey and the beginning of this experiment from a Domino’s restaurant in New Zealand.
Pizza delivery drone becomes a reality in New Zealand
New Zealand was chosen for this experiment because of its regulation, which allows companies to use delivery drones. According to Don Meij, Domino’s Group CEO, the company’s growth in recent years has increased significantly the number of deliveries and Domino is constantly seeking to innovate in pizza home delivery. The use of drones as a means of delivery is designed to complement Domino’s current fleet in the field.
They will include control systems and GPS online. The Pizza chain invested heavily to equip their restaurants with various delivery vehicles, such as electric scooters, electric bikes and even pizza delivery robots (DRU), the latest innovation.
For supplier it doesn’t make sense to have a 2-tonne machine delivering a 2-kilogram order. The DRU DRONE is the next step in Domino’s expansion in artificial intelligence field. It will enable them to acquire new knowledge and adopt new technologies in the business..Drone delivery allows to expand their supply zone by removing barriers such as traffic or accessibility and to provide faster and reliable delivery system.
Drone delivery could be soon possible in Europe
The first test flights will take place this year after summer in New Zealand. Domino’s will offer discounts on shipments by drone in the early stage of the test to perform later more substantial deliveries in terms of size, weight and distance, depending on the initial results and the Customer feedback. The group announced the possibility of extending the experiment to its six markets, namely: Australia, Belgium, France, the Netherlands, Japan and Germany.
Drone Delivery: The next disruption?
Except for security matters, we think Drone delivery allows companies to reach more rural customers and to reach urban customers in a much more efficient time. Moreover delivery cost would be cheaper and eco-friendly. This year, we saw many companies investing in drone delivery, among them, retailers such as:
- Amazon in UK: The government permitted them to conduct drone delivery tests
- 7-Eleven in U.S: The convenience store chain managed a trial with drone delivery for the first time in the country
- Google in Australia: Delivery drone has been tested in order to reach consumers in rural area
Did you know?
Domino’s Pizza is ready for the disruption
Domino’s Pizza makes your local pizzeria a loser, half of the company’s U.S. orders are digital. Its stock hit an all-time high in 2016 because Domino’s Pizza has aggressively courted Millennial stomachs by upping its online game and allowing young people to order via texts, voice recognition, connected voice and also tweets. Traditional pizzerias lost 21% Market share during the past decade.
Health tech received a major boost, as manufacturers unveiled a slew of snackable wellness solutions and advanced trackers that keep the whole body under surveillance. Consumers’ continuing pursuit of wellness is taking a new turn: the wellness digital. As they seek to create wellness cocoons that can protect them from threats to their health, environment and emotional state – wherever they are. These 12 innovations will be use in the future by the grocery industry. Indeed, nowadays the consumers are paying attention to the wellness and their wish is to improve the quality and well being of their daily life. In this article you will see how modern technologies and can improve the consumer’s sleep, sportings activities or even mental health !
Fitness and sportswear
Example: Activity listener– Misfit Specter
Benefit: Tracks activity and sleep, and syncs with Misfit’s mobile app over Bluetooth
How it works: Details of pricing and availability have not yet been confirmed.
Example: Ombra by Canadian sportswear startup OmSignal
Benefit: Measures and reports back on fitness metrics such as distance, heart rate and calories via the company’s OmRun platform
How it works: The OmBra gives instant feedback to the user via the accompanying app, allowing them to measure the effects of their training and workouts
Pocket health check/monitor
Example: Refit Card
Benefit: Lets users check their pulse and stress levels when the card is behind their smartphone.
How it works: The batteryless, near-field-communication based ECG monitor – a world first. It is developed by by South Korean health-tech company Solmitech. Price: $49
Example: San Francisco-based Sproutling, has developed a health sensing wearable device for babies. The device retails for $299, but the site currently shows that its sold out. Users area able to put their name in for a device on the waitlist.
Benefits: Designed to give insight into a baby’s wellbeing and predict sleeping patterns.
How it works: It tracks a baby’s heart rate, skin temperature, motion and sleep position. This is possible thanks to a wearable sensor in the form of a hypoallergenic anklet. Besides, it monitors room temperature, humidity, sound and light. Then it provides clear indicators of the optimum environment for sleep, as well as sending real-time updates to smartphone app.
Treatment and therapy
Example: Quell, a wearable band. Lets users check their pulse and stress levels when the card is behind their smartphone.
Benefit: That relieves pain, measure sleep duration and quality
How it works: Relieves pain by stimulating the user’s nerves, has been updated with an Overnight Therapy mode that will measure sleep duration and quality
Example: Fineck by Beijing studio Veari, is a wearable for the neck that tracks subtle movements via an app.
Benefit: Targeting people who experience neck strain and discomfort, tracks the neck activity and warn consumer when they are in a bad posture for too long. It also encourages consumer to adjust and exercise their neck muscles via app-based games and prompts.
How it works: Based on motion sensing.
Smart sleeper thanks to wellness digital
Example: Sleep Number’s bed mattress
Benefit: Track your heart rate, breathing and movement during sleep, and recommend when to go to bed and when to wake up to gain the most benefit
How it works: It Bed features sensors that track movement, heart rate and breathing, and then suggests ways to improve the user’s rest patterns – such as improved levels of firmness, comfort and support for their mattress
Example: A San Diego-based startup company, Hush, consists of 3 engineers have create the smart noise cancelling ear buds.
Benefit: To help deliver a peaceful sleep regardless of our surroundings.
How it works: Hush reduces sound in two ways: The sound eliminating foam provides passive noise reduction as a first sound barrier. The in-ear speaker plays a track to mask any residual sound that the earplugs do not block out.
Mood and mental health
Example: Brain-sensing headbands –Muse, created by Canadian tech company InteraXon
Benefit: The brain sensing headband helps you get the most out of your meditation practice by giving you real time biofeedback of what’s going on in your mind.
How it works: The headband uses brain-sensing technology to measure whether your mind is calm or active, and translates those signals into guiding sounds. Use the app to monitor your progress.
Example: Simi hormone-tracking
Benefit: Help women predict their future moods and fertility.
How it works: A saliva-based monitor and app analytics, through its calendar interface, the prototype can issue a warning when the user might be grumpy – handy for important meetings.
Example: Oxie – the first, smart, neck-worn air purifier
Benefit: It purifies the surrounding air from smoke, microorganisms and allergens.
How it works: Sleek enough to fit under your shirt collar, it places you in an “invisible bubble“
Example: The coiled Fervent Carpet rug, Dyson
Benefit: Fight Allergy, Mitest kill, bacteria kill
How it works: The rug is fitted with hydraulic connections that plug into domestic radiators, allowing it to heat up to 60⁰C every few month to kill off dust mitest. Soon to be released in Japan, British brand Dyson’s latest humidifier combines its bladeless technology with ultraviolet light to kill off 99.9% of waterborne bacteria.
So, the disruption in terms of wellness is everywhere and the digital is definitely the future of the grocery market !
The Power of Private labels: The channel
As most of you already know within the FMCG industry, retailers show a greater power. This high power reflects in a growing bargaining power that might be explained in different ways. Firstly in the distribution power both offline and online; retailers, owning thousands and thousands stores with different formats and warehouses, are a sort of “mandatory choice” for manufacturers in order to access to the final market. Secondly in the size. Indeed many retailers, nowadays, show a larger size than manufacturers. In this way they can spread their fixed costs over a greater range of outputs. Thirdly they have a higher financial power than manufacturers, since they can get fresh cash from consumers and use that cash to grow their business (e.g. investing to open new stores, to improve their online presence, to make more efficient their logistics, etc.). This “cash surplus” is explained by the fact that retailers get cash for final consumers in the last stage of the distribution channel and pay suppliers with an upstream extended payment with longer and more convenient terms (typically 90 days). This situation is a sort of a particular way of sourcing fund which facilitates retailers.
In addition they have access to million of data generated by consumers visits (offline and/or online) by getting access to million of data regarding their buying behavior that they can use to create their own product and selling strategies. Last but not least they launched their own “brands” (i.e. private labels) increasing, in this way, their distribution power. Moreover, regarding private labels over the years they modified their strategies, increasingly focusing on premium products and targets, especially on foods items (e.g. pasta sauces, fresh fruits, vegetables and snacking like Amazon did).
Indeed, if in the past private labels showed a very good price/quality ratio being around 30% cheaper than brands and 10/20% more expensive than discounters labels, nowadays, especially among traditional retailers, they show higher prices, differentiating their products claiming freshness, country of origin and taste (all essential attributes for food and beverage items as seen in the top 10 food trends).
Carrefour private label Reflets de France is local, fresh and premium oriented
The Power of brands: Innovation
The situation is different for other categories as personal care and home care, where brands seem still having a higher power. It is no coincidence that the two biggest worldwide conglomerate companies (P&G and Unilever) are increasingly divesting from food and beverage. P&G recently sold all its food business and Unilever shows more growth perspective within the Personal Care and the Home Care categories than the Food one. In a Nielsen (2014) report are listed the main reasons that might help to figure out the relationship between brands and private labels across different categories.
Below, it is explained why brands are still stronger than private labels in the personal care category:
- High innovation rate: product in personal care (but i would also include home care) require higher investments than food and beverages. This makes harder for private labels being competitive, since most of their suppliers are still small and medium companies which don’t have access to the same assets and resources of manufacturers.
- High product differentiation: brands still show a better level of differentiation than private labels. They still spend more money on marketing research than retailers. This implies that usually private labels tend to copy a branded item as soon as it will be rolled-out in the market.
- Stronger brand awareness and equity: this elements still represent a point of differentiation with private labels. Indeed, consumers say in Nielsen (2014) researches that they are willing to spend an extra and premium price for shampoos because “it’s worth paying extra (Nielsen, 2014).”
- Longer purchase and heavy promotional activity: the buying process for personal care and home care products (although specific and sporadic differences) is longer than other FMCG categories (e.g. edible products). Moreover, it is frequent and heavy the promotional activies and as a result lower the price difference between brands and private labels.
DIW econ Economic Bulletin (2011), The Power of Retailers, No 3
Nielsen (2014), “The state of Private Label around the world”, November
Smart beauty is on the Move with patch
Nowadays the terms “smart beauty” and “smart makeup” usually refers to multi-benefits products, such as BB and CC creams or all in one shower gels.
Therefore, those terms are quickly becoming linked with “connected beauty” – in other words, the mix of beauty and technology. The market leader, L’Oréal, is quickly adapting to this new trend and being a pioneer in smart and connected beauty products.
L’Oréal’s My UV patch is a pioneer
When you’re lying on the beach and enjoying your summer it’s always difficult to know when you need to apply more sunscreen. You follow the guidelines on the bottle, but you still wonder whether if SPF 30, 45 is enough for your skin type and the current weather. This is where connected beauty is stepping in. L’Oréal has created the My UV Patch, designed to monitor UV radiation exposure and advice you when to apply more sunscreen.
It has been developed by a team of 25 scientists
When you take a picture of the patch with your smartphone, you’ll see exactly how much UV exposure you’ve had and whether you should apply more sunscreen or not. The patch is designed to give you advice and recommendations depending on your skin tone, color, and type. Therefore the patches are only meant to be worn for up to five days, you then throw the patch away and start a new one. My UV Patch is a major first step into smart skincare and will be soon implemented for La Roche Posay sun cream products. The company has confirmed that it is planning to launch 10 more wearables in the near future.
Walmart & Five elements robotics to develop shopping carts
According to information from Bloomberg, the American giant of supermarkets Walmart carry on innovation while they are working with the “Five Elements Robotics” company for testing a robotic shopping carts prototype for supermarkets. Walking the aisles of a supermarket, slalom between the carriages, the rolling baskets and pallets, squint, clear the shelves to find the desired product, queuing and pushing his heavy cart to the parking lot. And if the chore of grocery shopping disappeared, not through the e -commerce box ? This is an option that Walmart could offer its customers.
A way to compete with e-commerce players
Allow customers to more easily find the products from their shopping list and avoid pushing heavy loads. Rival the comfort of online business At a conference organized by Bloomberg, Wendy Roberts, founder and CEO of the company Five Elements Robotics, said that this kind of technology was a real opportunity for physical stores to compete with the comfort that offer the giants of commerce line. According to a person familiar with the Walmart, which has not yet officially communicated on this project would currently testing in its laboratory prototype.
Listing, mapping, paying and following you to your truck!
According to the website of Five Elements Robotics, Dash would be able to save the shopping list, map the store and navigate autonomously to bring the as soon as possible the desired product customer to scan items, record the payment and follow the customer in the parking lot to his car. The gain provided by a robotic cart in 2017 seem obvious, however the feasibility of such a service is not. Indeed, supermarkets are an unstructured environment littered with obstacles of all kinds (pallets, shopping carts, customers, staff, etc.).
Based on 3D camera and sensors
A 3D camera and ultrasound sensors will really be sufficient to allow the robot to navigate safely and effectively? To perceive their environment correctly and learn how to avoid the dangers, the robot will probably rely on powerful deep learning algorithms to cope with all kinds of situations. It seems that the robotics company has made huge progress on these issues as it says on its roadmap that Dash will enter in production phase from the beginning of 2017.
Click and Collect will be ready for June 2016 in Tokyo subway
In Japan, according the Ministry of Transport, 20% of home deliveries fail. In order to improve the quality of service, Yamato Transport, Japan’s leading transportation announced in May, 2016, having partnered with Neopost Shipping, a subsidiary of the Neopost group. The two partners decided to create Packcity Japan, a joint venture 51% owned by Neopost and 49% Yamato Transport. The objective of this joint venture is to deploy an open network of automatized and safe parcel click and collect solution in the subway of Tokyo from June 2016. By 2022, Packcity Japan targets 5000 Click&Collect points.
Click and collect enabled by a specific environment
The solution of the lockers, where everyone gets his package whenever he wants, answers to the delivery needs of the Japanese consumer. A first experiment late 2015 on 1000 customers has reduced the failure rate of deliveries by 2% using click and collect. Japanese metro stations of Tokyo have the advantage of being a must, with their shops and restaurants.