Similar to the comments above, I too am skeptical regarding Mars’ real reason for this push for sustainability, as well as whether the business and economic rationale are truly there. I do not believe the PR / marketing benefits of this strategy will be significant enough to warrant Mars’ heavy investment. Therefore, they must believe that these actions will have positive impact on their bottom line (perhaps in the long-term). I think the concern that climate change and global warming will affect raw materials production worldwide and drive up costs/decrease output is a valid one, but the timeline and magnitude of these effects are uncertain. How can Mars justify a $1B investment today for something that may not yield gains for decades? Additionally, I believe their biggest challenge may be to get other companies on board. Cross-industry action groups will be key to pushing this movement forward and I’m not sure if the financial argument is compelling enough to encourage other major players to invest so heavily.
This is an interesting article and definitely demonstrates RFID technology’s ability to greatly influence and improve the retail supply chain. However, I wonder to what extent it can truly ‘revolutionize’ retail, especially given the two biggest barriers to customer purchases that you cited – “out-of-stock’ and ‘couldn’t find my item’. Although accurate inventory tracking and management can improve these two issues, isn’t the out of stock problem more widely attributed to incorrect prediction of customer demand? The retail industry is extremely difficult given it requires companies to anticipate future trends and identify months in advance the designs and styles that match future consumer preferences. Retailers still need better technology and processes to more accurately predict these trends, and I’m not sure RFID technology will be revolutionary enough to solve this fundamental problem. You mentioned that Macy’s will implement the technology for 100% of its products by 2018 and is already seeing big improvements to sales and profitability. Once many retailers follow suit, will this just become standard practice wherein the industry attains a new (albeit better) equilibrium that is fraught with other inventory issues?
I wonder if Walmart’s strategy makes sense if they and Amazon are not exactly competing for the same customers. You mentioned that Walmart is trying to innovate and invest more heavily in digital solutions to ‘fight’ Amazon, but Walmart’s average shopper is a 50 year-old female with annual HH income of ~$53K (http://www.businessinsider.com/meet-the-average-wal-mart-shopper-2014-9) while Amazon’s average customer is 37 years old (https://nypost.com/2017/08/19/guess-how-old-the-average-amazon-customer-is/). It makes sense that Amazon’s innovations resonate with the new crop of technology-savvy consumers but perhaps digital solutions such as cashless payments are too early and not the right fit for Walmart’s typical shopper. Therefore, how much should Walmart really focus on digital innovations vs. (as Bruno mentioned) potentially more crucial issues such as improving customer service? Maybe Walmart should take a step back, employ some design thinking, and truly understand their target market so they can ensure that they meet the needs of their core customer instead of Amazon’s.
HP’s instant ink program certainly meets consumer needs and solves the biggest and most expensive problem that consumers face regarding their printers (finding and purchasing expensive ink). However, this appears to me to be a shorter term solution in a rapidly maturing industry. The printing industry as a whole seems to be facing greater macro pressures including declining usage due to movements to reduce paper waste (both for sustainability concerns and a mindset/technological shift towards virtual solutions that require decreased use of physical paper). Although big businesses will likely always require printing services, I do believe they will be slowly shifting away from heavy reliance (resulting in less ink usage) and therefore I wonder whether this solution is addressing an overall dying market? Should HP be focused on innovating for other solutions that address a 10-15 year horizon vs. small improvements?
Thanks for the interesting read! The move towards a more transparent supply chain makes a lot of sense though I’m surprised to see food manufacturing pursue this given, as you mention, the complexity and multi-party arrangements coupled with regulatory constraints in this industry. However, I think it’s a very smart move and I wonder what impact this will have on smaller, local producers. There has been a growing trend towards locally sourced meat products (partly due to the call for greater transparency). Will this move reduce the transparency gap and push out local producers or even incorporate them as partners into the supply chain? It’s definitely a great way to innovate and anticipate future trends, though per your point, scalability of this model is still TBD.
Great read! The previous comment from “TOM Challenge 33” regarding Macy’s value proposition of bringing together brands from different designers makes me question whether the transition from a push to pull model will actually be viable for department store retailers in the long-term. Fast fashion retailers have a greater ability to keep limited inventory and produce supply more in line with a just-in-time model because the bulk of their products are private label. Therefore, they have full control from design through production. Macy’s on the other hand pulls supply from a variety of brands, which implies that requesting inventory on a short timeframe will significantly constrain many suppliers’ current operations. To what extent can they ask of this for the hundreds of brands they stock?