How a Swedish Grocery Store Beat Amazon Go to the Punch

The Internet is buzzing about Amazon Go, Amazon’s new self-service grocery store. At the flagship Amazon Go in Seattle, opening in January 2017, anyone with an Amazon account, a supported smartphone, and the Amazon Go app will simply take what they want from the store and leave with no check-out required. Customers will then receive a bill from Amazon, which uses a technology called Just Walk Out to detect when products are taken or returned to a shelf. The excitement over the disruptive potential of Amazon Go is justified. But a small grocery store in Sweden named Naraffar beat Amazon to the punch nearly a year ago. Naraffar’s story illustrates how small businesses can innovate quickly — but how big brands like Amazon can refine an innovation and make it mainstream.

Since January 2016, Naraffar, located in the small town of Viken, near the southern tip of Sweden, has been providing unstaffed 24-hour self-service. Customers use a smartphone app to unlock the store’s entrance, take groceries, and leave. Customers receive a bill later. Customers can also influence how Naraffar stocks its inventory by requesting items not in stock.

An enterprising Viken resident named Robert Illijason opened Naraffar after he noticed an unmet customer need: his own. After dropping his last bottle of baby food by accident, he needed to replenish his supply pronto. But the accident occurred when all stores were closed in the 4,200-town of Viken. Only after driving miles to another town did he find a store open.

In the aftermath of the experience, he wondered: why not open a 24-hour store in Viken? But the cost of hiring people to operate the store around the clock turned out to be prohibitive. So he designed a store that requires no people — not even to open or close the front door.

So far, Naraffar has succeeded as a small-scale, 7-11 type convenience store that offers staple items on demand, such as diapers and milk. Ilijason reports no issues with shoplifting. Customers need to identify themselves through Sweden’s BankID system. Security cameras monitor the store, and if for some reason the front door remains open for longer than 8 seconds, Ilijason receives an alert.

As noted by Tarunika Tolani of the Harvard Business School, Naraffar is a natural progression from click-and-collect buying, in which customers order what they want online and pick up goods in brick-and-mortar stores. The number of click-and-collect points in Europe grew by 20 percent in 2015, especially in the United Kingdom, where London alone can accommodate several collection points. Whether he realized it, Ilijason was tapping into a larger trend in consumer behavior by opening a store that removes a layer of friction from an increasingly popular click-and-collect approach.

But Naraffar lacks scale. Amazon possesses the scale, brand strength, and resources to make the Amazon Go model a mainstream experience. As is so often the case, start-ups can experiment and innovate. But the big brands such as Amazon can take innovation to another level. Amazon can test, learn, and refine an idea, whether its own or someone else’s. For instance, Naraffar requires shoppers to scan items with their smartphones and then confirm purchases — a two-step process. Amazon Go customers literally pick up their inventory and leave without any scanning their devices.

Naraffar offers limited inventory in a small location. Amazon Go’s flagship facility resembles a convenience store (with 1,800 feet), but already Amazon is exploring multiple grocery store formats, including much larger facilities, according to The Wall Street Journal.

Even Naraffar required the cooperation of a big brand to launch: Apple needed to approve its app for the smartphone technology to work.

In the United States, retailers are experimenting with several models that might exist alongside each other, including self-service stores of various sizes; variations of click-and-collect (see Walmart’s Pickup and Fuel concept stores, where customers order online and then drive to Walmart to have their groceries loaded into their cars by employees); and delivery on demand (which Walmart has been famously piloting with Lyft and Uber). An independent self-service store relying completely on an app might be a better fit for a remote small town that requires fewer goods and exists. But I could see Amazon building larger Amazon Go stores (certainly larger than 1,800 square feet) in cities where a critical mass of shoppers and infrastructure exists to support a bigger store.

Retailers such as Walmart and Amazon will continue to experiment with different store formats. 2017 is already shaping up to be an exciting year.

Lead image source: geeksnewslab.com

Related:

Business Insider, “This 24-Hour Convenience Store in Sweden Doesn’t Have a Single Employee — Here’s How,” by Chris Weller, 29 February 2016.

The Huffington Post Canada, “Naraffar, Unmanned Swedish Grocery Store, Open 24 Hours,” by Emma Prestwich, 16 March 2016.

Reuters, “Broken Baby Food Jar Leads to Sweden’s First Unstaffed Grocery Store,” by Ilze Filks, 14 March 2016.

Brian Solis (via LinkedIn), “Amazon Go Brings Retail Experience into 21st Century,” 6 December 2016.

The Wall Street Journal, “Amazon Working on Several Grocery-Store Formats, Could Open More Than 2,000 Locations,” by Laura Stevens and Khadeeja Safdar, 5 December 2016.

Content Master: The Morton Arboretum

img_1715

As the leaves of autumn give way to the bare branches of winter, the Morton Arboretum is a place of both refuge and inspiration. The preserve west of Chicago has a well-deserved reputation as a destination for hiking and bicycling amid the trees, ponds, and fields that comprise the 1,700-acre grounds. But the arboretum doesn’t assume that its reputation alone will attract visitors. To ensure that the natural playground remains top of mind amid the many digital and offline distractions vying for its patrons’ attention, the Morton Arboretum also happens to be a powerful content machine.

The arboretum’s content strategy is twofold: use digital to attract visitors, and offline content to support the organization’s mission of protecting and appreciating the natural world.

Visual Storytelling the Digital Way

The Morton Arboretum creates awareness and engagement by sharing content across the digital world where its patrons share their own content, on social spaces ranging from Facebook to Instagram, thus demonstrating that if you want to attract an audience, you need to be present where they live and search for things to do.

And the arboretum speaks the language of its audience: imagery. For instance, in October and November, the arboretum’s Instagram account offered an explosion of fall colors enticing the Instagram community to experience the bright red leaves of a sour gum or a golden yellow cork tree. The arboretum’s growing Pinterest community takes advantage of Pinterest’s organizational tools, with images organized under boards ranging from Gardening Ideas to Winter Trees. On YouTube, the arboretum offers more immersive tours that give potential visitors a taste of what they’ll find if they stop by. For instance, the arboretum recently posted a video tour of Illuminations, during which the grounds come alive with a festive light show at night. But YouTube is also a learning destination, offering how-to videos on topics such as tree pruning and watering plants and trees.

On Facebook, the arboretum also includes user-generated images, thus drawing from a broader palette of images and creating more engagement from its Facebook followers. Facebook and Twitter also act as sources of updates on the events that the arboretum offers around the year. In fact, its Facebook page is a textbook example of a how an organization can use a local page to generate awareness where people conduct searches for things to do nearby. The arboretum makes it easy for visitors to learn about events such as its Boo Breakfast for children, and the arboretum cross-promotes content on other social spaces, including TripAdvisor reviews. By being transparent and informative, the arboretum makes Facebook an important digital touch point that complements its website, which serves as its hub for learning more about things to do there. Patrons can also sign up for an email newsletter that curates content as frequently as needed.

A Learning Experience

The arboretum’s not-so-secret weapon for engaging its audience is educational content. Its website modestly claims that we engage students, families, teachers, and life-long learners to dig a little deeper into the science of trees,” which is putting things mildly. The arboretum is practically a year-round school, offering lectures, classes on topics such as nature art and photography, and opportunities to get involved in conservation. The arboretum does a masterful job segmenting educational content for different audiences. Here are just a few examples:

  • School groups: for grades PreK-5, the arboretum hosts classroom visits in which educational leaders provide courses such as plant investigation and the basics of trees. Its half- and full-day field trips offer deeper dives into nature for ages ranging from kindergarten to high school. Kindergarteners might learn about using the five senses to explore nature, whereas high schoolers can get involved into the maintenance of the park by acting as restoration stewards during their field trips.
  • Adult programs: the arboretum empowers adult visitors to enrich their understanding of nature and discover their inner artists. During chilly winter Saturday mornings, visitors can take winter bird walks, in which small groups discover the habits of the birds who winter at the arboretum. The Nature Artists’ Guild encourages patrons to express their artistic sides through paintings, drawings, and other creative endeavors — really a form of user generated content.

screen-shot-2016-11-21-at-10-07-25-am

Image source: The Morton Arboretum

One of my favorite arboretum activities is to immerse myself in learning at the Sterling Morton Library. The curved shelves full of neatly arranged books, comfortable chairs, and high ceiling create a welcoming environment to learn the old-school way: by burying your nose in books about the natural world the arboretum has vowed to protect. The library reminds me that a location need not provide blinking lights, video, and pulsating music to be immersive. The silence that invites quiet exploration of the mind is as immersive as sound.

img_2361

All the content has a purpose: to support the arboretum’s self-proclaimed role as “the champion of trees.” The exhibits, the classes, and the tours all ladder up to a mission to get everyday people involved in protecting the natural world. And the arboretum supports its mission in obvious ways, such as the Vanishing Acts traveling exhibit. Vanishing Acts: Trees Under Threat was developed with the Global Trees Campaign to raise awareness for threatened and endangered trees. What makes Vanishing Acts special is that you can take the exhibition with you. The exhibition is designed to be set up in public spaces appropriate for learning about tree conservation. As such, the arboretum offers a program to help others set up the exhibition, including a how-to guide for constructing the exhibit. Consider Vanishing Acts an old-school way of creating sharable content.

 Questions for Brands

  • Are you creating content that will engage your audience at a location level?
  • How well do you employ visual storytelling to share your brand?
  • Are you distributing that content where your customers are going to find it?
  • How well does your content support your mission?
  • How well do you involve your audience in the branded content you create?

Other Brands to Examine

  • Nordstrom, for its mastery of content on platforms such as Pinterest.
  • Starbucks, for capitalizing on social spaces to generate awareness for its stores.
  • Bass Pro Shops for providing activities such as 3D Archery
  • Weber Grill Restaurants for offering grilling classes and special events

For brick-and-mortar businesses, sharing meaningful content is increasingly essential to combat the ever-present threat of such as video games, Netflix, and apps that make it all too easy to remain planted on our sofas in the comfort of our homes. The Morton Arboretum can teach any brick-and-mortar business the power of immersive content.

Portions of this blog were adapted from a post I wrote for SIM Partners.

 

How Uber Feeds an Appetite for Disruption

150122_EM_UberDriverPay

The news about Uber rolling out self-driving cars later in August underscores the reason why Uber has become a multi-billion dollar brand within seven years: Uber’s core competence is not ride-sharing — it’s disruption.

Uber has consistently developed and modified its business model to either drive or participate in disruption. Consider these examples:

  • In 2009, Uber initially upended the auto transportation industry by launching a ride-sharing service that liberated consumers from the tyranny of taxicabs that dictated terms and pick-up schedules to passengers. The launch of Uber was the big bang, which ushered in an era of on-demand, peer-to-peer services in multiple industries.
  • Uber set its sights on home delivery with the launch of UberRUSH in 2015 and UberEATS in 2016. UberRUSH delivers goods for retailers ranging from Nordstrom to boutique florists. UberEATS focuses on food delivery for restaurants. The service is moving its way across the United States by forming relationships with dining establishments in major cities such as Philadelphia, where more than 100 restaurants partnered with UberEATS on the first day of its launch.
  • The deployment of self-driving automobiles is part of a broader disruption of the automotive industry, which has involved an interesting partnership between automakers such as Ford and Silicon Valley titans such as Google, as car manufacturers seek to change their own industry with autonomous vehicles before someone else does. Self-driving vehicles, following their initial use in Pittsburgh, will permeate both transportation and delivery, potentially outmuscling the use of drones that other businesses are adopting.

How does the company continue to ride waves of disruption, even challenging the very service it launched in 2009? Three factors play a role:

  • A knack for wedding technology with an understanding of human behavior. Uber initially succeeded not because it provided a cool app but because the company understood that people ordering taxicabs require responsiveness, ease of use, and transparency in pricing — needs that were unmet by the status quo. The Uber app filled the void by making it ridiculously easy to order a ride when you want it and where you want it. No longer was it necessary to navigate clunky phone trees to request a cab and then wait around wondering when your ride was going to show up.
  • Creation of partnerships with like-minded brands. Uber doesn’t go it alone. For ride-sharing services, Uber has created relationships with businesses such as Foursquare to make it even easier to order an Uber. The success of UberRUSH and UberEATS relies on Uber’s ability to partner with retailers and restaurants. It’s no accident that one of UberRUSH’s delivery partners is Nordstrom — a company known for its innovations in customer service. (I expect Uber will expand its relationship to go beyond delivery and offer customer service options akin to a Nordstrom town car, shuttling loyal customers around for a day of shopping and in-car entertainment as an exclusive service.) Similarly, Uber is partnering with Volvo with self-driving cars.Uber finds not just any partner, but the right fit for Uber.
  • A willingness to adapt. UberEATS initially rolled out in 2014 as a feature on the Uber ride-sharing app. But the experience was wonky. Uber realized that people are in two different frames of mind when we order rides and food: when we want a ride, we want to get from point A to point B. We don’t want to bother with ordering food delivery. So Uber decoupled the feature as a standalone app. Uber has also constantly changed its ride-sharing app, introducing greater levels of information transparency. Now Uber is revised its business model with a driverless service. Uber also recently introduced UberPOOL, which encourages passengers to share rides and split their transportation costs. UberPOOL could cut down on congestion and pollution by combining multiple rides in one car. UberPOOL has reportedly taken 7.9 million miles off the roads and 1,400 metric tons of carbon dioxide out of the air in Los Angeles within its first eight months of use.

What’s next for Uber? What industries might the company upend? Here are some candidates:

  • Entertainment. Uber can become an entertainment brand in a number of ways. Live Nation and Uber already have a basic ride service partnership for people to order rides to events, but I think Uber is capable of much more, especially by bundling entertainment with ticketing and transportation. Uber is big enough to offer the entertainment itself through partnerships with artists. Uber already hosts private concerts for customers. Uber may also capitalize on the car itself as a source of entertainment. The company already offers ad-free streaming via apps such as Pandora, which just hints at the kind of in-car entertainment options Uber could provide, ranging from music to streaming movies for longer rides. Cars provide much more than transportation. They’re already mobile content machines.
  • Healthcare, by bringing medical providers to patients (and vice versa) and by managing the delivery of pharmaceutical products. Companies such as Pager exist already to bring physicians to patients’ locations on demand. But Uber has the scale to pull off on-demand medical care nationwide. Already Uber has a relationship with Relatient to offer transportation services to patients. More to come here.

Uber could also expand payment, customer loyalty, and advertising services through partnerships with other companies, becoming an all-purpose customer acquisition and service platform based on the data the company collects on its customers.

Uber will also go beyond the app interface if it needs to do so. If the economics make sense, Uber could penetrate wearables to provide even more frictionless, on-demand services.

What do you think Uber will do next?

Augmented Reality at Cedar Point: First Impressions

CP

Virtual reality is grabbing the headlines right now, but augmented reality has a bigger near-term future. My recent experience with a new AR-based game at Cedar Point Amusement Park illustrates how AR can make an already excellent customer experience better.

The Augmented Reality Boom

By 2020, augmented reality is expected to be a $120 billion market, versus $30 billion for virtual reality, according to Manatt Digital Media. And it’s easy to see why businesses ranging from retail stores to theme parks are creating AR experiences. VR usually requires headsets to transport users into make-believe worlds and demands more of a person’s time and attention. On the other hand, AR, while being less immersive than VR, integrates virtual content into real-world settings (e.g., projecting an interactive map on your table top at home).

In June, Cedar Point Amusement Park in Sandusky, Ohio, launched an experience that shows how AR can use immersive gaming to take a fun day at a theme park to another level. As my buddy John Hensler and I discovered when we tried out the new Battle for Cedar Point game June 16, AR in a theme park works best when it enhances a natural part of your visit, such as turning a queue line into an opportunity to score an achievement.

About Cedar Point

Cedar Point bills itself as the roller coaster capital of the world and for good reason. The 365-acre park (nearly four times the size of Disney World’s Magic Kingdom) boasts 18 roller coasters, including the recently opened Valravn, billed as the “tallest, fastest, and longest dive coaster in the world.” John and I have been to the park several times with family and friends, and we keep going back because the rides are flat-out terrifyingly fun. But when you’re not losing your stomach on a thrill ride, you spend a lot of time doing things that happen in all theme parks, such as walking around and waiting in lines (unless you have the budget for a Fast Lane pass). With Battle for Cedar Point, the Cedar Fair Entertainment Company has turned downtime and park navigating into game time.

The Battle for Cedar Point Continue reading

This Is the World Uber Has Made

394440-69a0d832ed17f2d3a4c8b26b473f05beed63b178

Uber has become so pervasive that the company is changing our vocabulary.

In everyday settings, we use Uber as a verb (as in “I’ll Uber to the ball game tonight”). In business settings, we use the term “uberization” or “uberfication” to refer to companies creating on-demand services such as home delivery of groceries or healthcare on demand. The Uberization of our vocabulary is a perfect example of how technology enables a change in consumer behavior. Thanks especially to the uptake of smartphones and apps, consumers are making purchasing decisions faster, and we’re expecting businesses to respond on our terms. The Uberization of our own consumer behaviors explains why Amazon has been embracing the use of automated drones to deliver goods faster and why brick-and-mortar businesses ranging from Nordstrom to Walmart are partnering with ride-sharing services to offer home delivery as well.

But is an on-demand world a happier one?

Walmart on Demand

On June 2, Walmart’s Chief Operating Officer Michael Bender announced that the $482 billion brand is piloting a grocery delivery program in select markets. Customers using the service will place grocery orders online and designate a delivery window. Walmart personnel will prepare their orders and may have a ride service such as Deliv, Lyft, or Uber deliver the items to the customer’s door. Customers will pay a delivery fee directly to Walmart as part of their online order rather than fuss with paying a driver along with the grocery order. If the process works as Walmart intends, customers will be able to order what they want online once, and all the prep and delivery will occur behind the scenes. As noted on Walmart’s blog, Sam’s Club has been piloting a similar program in Miami since March.

On-Demand Businesses Continue reading

Empathy at Trader Joe’s

TraderJoes

In X: The Experience When Business Meets Design, Brian Solis asserts that experience is the new brand, and he devotes an entire book discussing how companies can create “memorable moments for your customers through every encounter they have with your brand — all day, every day.” He says that customers want empathy, not impersonal treatment, and companies that know how to be empathic enjoy a huge competitive advantage over those that don’t.

Empathy comes from humans, not technology. And empathy happens in everyday moments. Let me give you an example.

As tax day approached April 14, I glumly mailed two checks to the U.S. Treasury and the Illinois Department of Revenue and then decided to overcome the depressing with the mundane: I ran an errand at a Trader Joe’s near my home in Downers Grove, Illinois. Rendering unto Caesar is important; but so is restocking skim milk and coffee.

I filled my cart with the usual assortment of TJ’s bagels, juice, fruit, and other goodies, jumped into a check-out lane, and inserted my debit card for payment. A cashier named Stephan greeted me with a warm smile, like just another dude trying to spread good cheer.

“How you doing?” he asked.

“Ah, well, you know . . . ” I replied with an unhelpful shrug.

While Stephan took care of business behind the counter, my ears detected a sweet funky vibe overhead courtesy of the in-store music play. I thought I recognized the tune from the 1970s playing, but I could not place it. I looked up at the ceiling where the music was coming from. So did Stephan.

“I know that song,” I said. “Kind of like Stevie Wonder’s ‘Superstition . . .'”

“But not quite,” he completed the sentence. “I know what you mean.”

I know what you mean: suddenly I looked at Stephan in a new light, as a member of the universal brotherhood of music.

“The song might be Billy Preston,” I said. “I think the music source is too far away for Shazam to recognize it. But isn’t it a great tune?”

He smiled in agreement, pulled out his own phone, and found the Shazam music discovery app on it.

“Hang on,” he said. “I know I’ve heard this song, too. I think I’m tall enough to get Shazam to pick up the song from the ceiling.”

The app didn’t load right away on his phone. A customer was behind me in line.

“I don’t want to hold you up,” I said.

He nodded his head and smiled. “We got this.”

We got this. Now we were a team on a quest to uncover a funky musical mystery.

He got Shazam to work, held up his phone to the ceiling, waited a moment, and smiled victoriously.

“You’re right! “Outa-Space’ by Billy Preston!”

We smiled and high fived like two guys at a concert, not at a Trader Joe’s checkout line. I even jumped up and down. Man, I had not heard that song for some time.

Little moments of empathy. Like Stephan empathizing with my love of music, and, I think, sensing that perhaps I was not having the best of days. A human connection made.

If you shop at Trader Joe’s, you’re probably not surprised to hear my story. Its stores are more than attractive products with reasonable prices. They’re all about the human experience. The people who work at the Trader Joe’s near me (its address is 122 Ogden Avenue, Downers Grove) always seem like nice folks.

In X, Brian Solis writes, “All business is personal.” It sure is. Trader Joe’s is a $9.4 billion business consisting of hundreds of stores. All it takes is a personal dose of empathy from a cool guy named Stephan to humanize the brand.