Innovating With Old Ideas, Managing a BYOD Office, and Selling Luxury Cars on Instagram

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INNOVATION

Is Amazon’s most revolutionary strategy its willingness to recycle old ideas? “Amazon, of course, is the Sears Roebuck of our time, but it’s more than that. Amazon is systematically going through every branch of the idea tree around what retail is, and doing it without any pride. It’s trying everything that anyone has ever tried before, and anything else that it can think of that might make sense, as well. There is no one saying ‘that’s a good idea, but we’re a website so we wouldn’t do that.’

The clearest place to see this is in Amazon’s moves into physical retail. This is the opposite of pride or ‘principle.’ Amazon’s job is ‘to get you the thing,’ not ‘to be a website,’ so what are the best ways to do it? What else might work? The project to make a convenience store with no human checkout process is an obvious experiment, now that machine learning and computer vision offer a route to make it work. (There are a number of startups pursuing all the possible vectors to doing this.)

“More interesting, though, are the Amazon Four-Star stores, physical retail stores—currently in New York and Berkeley, California—that only sell products rated highly by users on its site. I joked on Twitter that they feel as though they were designed by very clever people who have seen shops in Google Street View but have never actually been inside one. There’s a sense of cognitive dissonance: The selection of products appears to be completely random. There’s a rice cooker, a Harry Potter Lego set, a cushion, a Roomba, a mixing bowl, a book about trees … It makes no sense. … Of course, sometimes ‘it makes no sense’ is the right reaction (remember the Fire Phone after all). But when clever people do things that make no sense, it can be worth looking twice. Is this a new discovery model? A different way to change how people think about purchasing? Well, it’s another experiment.”

RETAIL

Walmart and Nordstrom are building stores where you can’t buy anything: “The two retailers are creating small hubs in big cities and dense suburban areas for shoppers to retrieve their online grocery and clothing orders. These new locations give them access to shoppers who want their stuff in a hurry without schlepping out to regular big-box stores or waiting around for home delivery. Earlier this month, Walmart opened Walmart Pickup Point, a 40,000 square-foot prototype store outside of Chicago in Lincolnwood, Illinois, to cater to customers’ online pickups and deliveries. Customers drive up to the site to designated parking spots, and a Walmart worker will load up their trunk with their order. … 

“Nordstrom Local hubs are smaller than its traditional department stores. They give customers a place to make pickups and returns and take advantage of Nordstrom’s alteration and tailoring services. Nordstrom has three Local stores in Los Angeles and is slated to open its first two in New York City in September.”

THE ECONOMY

Businesses were more cautious in the second quarter, prompting a still-growing but slowed economic report: “Consumer spending, which accounts for more than two-thirds of the economy, rose at an inflation-adjusted annualized rate of 4.3 percent in the second quarter, up from its first-quarter pace of 1.1 percent and marking the strongest reading since late 2017. ‘The simple proposition is that the trade war made manufacturing weaker and the tax cut made consumer spending stronger,’  said Ian Shepherdson, chief economist at Pantheon Macroeconomics.”

Last year saw a freight boom and trucking companies expanded capacities, but this year demand has been falling: “Now shippers have the upper hand. The results have been especially dramatic on the spot market, where companies book last-minute transportation and prices are more volatile than the contract rates truckers negotiate with customers. The average spot market price to hire a big rig was off 18.5 percent in June from the same month a year ago, to $1.89 per mile, according to online freight marketplace DAT Solutions LLC. Last month on DAT’s platform there were about three loads for every available truck, compared with six loads per truck in June 2018.”

TECHNOLOGY

Here’s a guide to managing a bring-your-own-device office: “For your policy to be effective, you should have a certain level of control over personal devices that are used on the job. While you can’t mandate everything, you can set certain expectations. Make it clear that employees can use their own smartphone, computer, etc., on the condition that your expectations are met. Rules you might consider include the following: All company-related assets must be password-protected. …Devices must be equipped with (and registered) a ‘Find my Device’ service. Not only can this service track down a missing device, but some can wipe a device remotely. All operating systems, applications, and software must be updated regularly. … Data must be backed up regularly. … Devices must have antivirus protection installed.”

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MARKETING

RD Whittington and others are using Instagram as a hub for selling luxury cars: “A partner in the Luxury Auto Collection of Scottsdale, Ariz., [Whittington] has moved millions more dollars worth of metal through his Instagram account, which has, since it was started in 2015, become the go-to place for celebrities and CEOs with the faith to make a wire transfer on the spot. Exotic cars (expensive, high-horsepower cars typically imported from Europe in limited quantities) are his specialty … more dealers are turning to social media to combat a contracting market and meet younger customers in their familiar milieu. …

“Arya Omidvar, the marketing director of Porsche Fresno, said he has sold about 10 cars from his personal Instagram account, @aryadrives, ranging in price from high five figures to $230,000 for a Porsche GT3 RS. ‘So many people are just straight-up addicted to their Instagram account,’ Mr. Omidvar said. ‘They’re spending so many hours on it that if you put it out there, something will stick.’”

It’s getting easier to target consumers with television advertising: “Early this year, Cars.com made a move that gives a glimpse of where the ad business may be heading. Cars.com used to do the lion’s share of its marketing through TV ads aimed at any and all consumers, including running commercials during the Super Bowl. But early this year, the automotive-recommendation company tried a new approach—pausing all traditional TV ads and running commercials on streaming-TV platforms like Roku and Amazon Fire TV. On those platforms, Cars.com could use heaps of audience information to advertise only to those people who were in the market for cars.

“Targeting ads so precisely is a choice that many companies are making. And it’s beginning to have big effects on the advertising industry. Driving this trend: a combination of factors that are finally coming together to make precise targeting of a wide audience possible. The streaming platforms, traditional pay-TV providers and third-party firms are giving advertisers access to robust technology and granular data about viewers, such as income levels, purchase history and web-browsing behavior. At the same time, unlike earlier stabs at targeted TV, marketers can use the streaming platforms to reach a larger and more geographically diverse group of people across the US.”

PRICING

Uber is testing a monthly subscription pass that combines rides, Eats, bikes and scooters: “In this pilot phase, Uber is testing a few different iterations in San Francisco and Chicago, but each version includes a fixed discount on every ride, free Uber Eats  delivery and free JUMP (bikes and scooters) rides. The pass costs $24.99 per month. In other cities, Uber is testing lower-priced passes that offer discounted rides and free delivery on Eats orders above a certain amount.”

SUSTAINABILITY

Zara, which built an empire on fast, disposable fashion, just announced a plan to transition to using more sustainable fabrics: “The entire supply chain is designed to churn out the latest looks, and the nature of fashion is that it quickly becomes obsolete … right now, it is being deployed to create hot new looks that may not be in style in a few weeks or months. This is directly contributing to our overconsumption of clothes. Even if Inditex manages to make most of its clothes out of more sustainable materials, it will not be a truly sustainable brand if consumers buy products because they are in style and expect to discard them within a year. And should [parent company] Inditex be able to implement recycling technology quickly, it will still require energy and resources to pulp old garments, recover fibers, and turn those fibers into new clothes.”

STARTUPS

San Francisco-based Hipcamp is a tech startup that helps users find the perfect camping spot: “[Hipcamp] provides a ‘people-powered platform’ that unlocks access to private land for camping, glamping or just a beautiful spot to park your RV, as described by Alyssa Ravasio, founder and chief executive officer. Amid explosive growth in emerging markets, including Florida and Texas, the company has attracted a $25 million Series B investment at a valuation of $127 million. … In 2013, Ravasio learned to code and built the first iteration of the Hipcamp platform, a comprehensive database of campsites that earns money by taking a commission made from each booking it facilitates. Today, the company has grown to 40 employees, with campsites in 300,000 sites across the US and plans to expand internationally soon.”

The founders of Mayvenn created a new business model for selling hair extensions to black women: “Stylists sign up with Mayvenn for free and the platform creates an individual web page for them. The page features information about the stylist and directs shoppers to the company’s online store, where they can buy extensions or other products ahead of salon visits. ‘If a client buys Mayvenn’s products through the stylist’s page, the stylist earns 15 percent commission per sale,’ said [Co-founder Diishan] Imira , adding that stylists can sometimes earn up to a 30 percent commission, which is paid in either cash or store credit or both. … ‘Hair stylists are only ever paid for their styling services, even though they are the ones routinely telling customers about what hair products and brands to buy,’ said Imira. ‘Yet they don’t have a way to cash in on this free advice. So we gave them the ability to do so.’ In the seven years since the business launched, Mayvenn has logged $80 million in sales and built a network of 50,000 stylists nationwide on its platform.”

OXFORD STRATEGIC ADVISORY DEAL OF THE DAY

VMWare, a cloud computing and virtualization software and services company, has acquired Uhana, Inc., a developer of a mobile network operation platform designed to create a distributed, cloud-scale data center. “Specifically, [Uhana] plans to integrate the software into VMware Smart Assurance and VMware Smart Experience, which enable carriers to detect technical issues and analyze the efficiency of their operations.”

And that’s what’s ahead.

Please send comments and suggestions to mattg@oxfordcenter.com and lfeldman@oxfordcenter.com

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