3 Tech Nightmares That Could Affect Retail

By 
Jackson Lewis, Associate Editor

technology

CHICAGO -- Last week was filled with bad news for the technology world, and there are plenty of implications for convenience retail. While companies such as Facebook, Uber and Amazon may seem distant to convenience stores, the size and scope of these companies means their ups and downs can have far-reaching effects.

Some of these tech nightmares, including a potential sign of weakness in Amazon’s online sales, have the potential to be a boon for convenience retailers. Others, such as a recent loss of public trust in Facebook, could hinder c-store social-media teams trying to get their brand’s message to customers.

Click through for three recent tech nightmares and their potential effect on convenience stores …

1. Facebook's fall from grace

facebook

Facebook is taking worldwide criticism for its mishandling of user data in its dealings with Cambridge Analytica, a data firm that sells insights into consumer voting behavior.

Cambridge Analytica allegedly took the personal data of 50 million Facebook users without permission from the social network. The stolen data was then analyzed by Cambridge Analytica and put to use by the Trump 2016 presidential campaign and for the Brexit referendum in the United Kingdom, according to The New York Times.

The scandal caused Facebook’s stock price to plummet as U.S., British and E.U. regulators launched investigations into the matter. Britain’s Parliament has asked Facebook CEO Mark Zuckerberg to appear in person to explain what happened, Business Insider reported. As a U.S. citizen, Parliament cannot force Zuckerberg to appear, but not doing so may signal an unwillingness to confront the issue.

The hashtag #DeleteFacebook was trending on Twitter on March 19. Articles explaining how to delete a Facebook profile are popping up everywhere from USA Today to Newsweek.

Retailers who depend on Facebook for marketing should keep this news in mind if they notice a decline in engagement. This scandal also provides a valuable lesson in customer data security. Customers may give personal information freely at first, but once that data is stolen or misused, customer trust can easily disappear.

2. Autonomous vehicle tragedy

uber

A self-driving Uber vehicle struck a pedestrian in what is believed to be the first instance of a pedestrian death involving an autonomous vehicle. Since the incident, Uber has taken its self-driving cars off the road for the time being.

The victim, Elaine Herzburg, was struck while walking her bike near a crosswalk. An Uber spokesperson said it is investigating the accident and cooperating with law enforcement.

Tesla faced a similar situation in May 2016 when a driver using the Model S car’s autopilot died after colliding with a truck on a Florida highway.

Recent police reports indicate the Uber vehicle was not at fault for the incident, according to the Wall Street Journal, but many people following the story will undoubtedly tie the incident to the safety of autonomous cars overall.

This incident was reported as Bloomberg wrote that rival ride-hailing company Lyft grew revenue more than $1 billion in 2017 and beat Uber's fourth-quarter growth by 2.75 times.

The day when self-driving cars make up the majority of vehicles on the road is still far away. It may never arrive. And it is still unclear exactly how the rise of self-driving vehicles will affect convenience stores, and incidents such as this will not help autonomous vehicles gain traction.

3. Amazon burdens suppliers

amazon

Amazon’s price war with Walmart and other large retailers has led the e-commerce giant to raise transportation fees for companies supplying beverages, diapers and other heavy products that are expensive to ship, according to Bloomberg.

While Amazon is well-known for its quick and convenient delivery, its fulfillment expenses rose 43% in 2017 to $25 billion, swallowing the company’s 31% growth in revenue.

The online retailer is also limiting the number of single, low-price items customers can purchase to keep shipping costs low. These items can include toothbrushes, soap, lipstick and other inexpensive items. Many of these items do not result in a profit for Amazon when bought alone.

Amazon already sold select health and personal care items as part of a packaged-deal-only order of at least $25 for several years. This recent move means that list will now encompass more items. The move could lead to fewer sales of less expensive health products, which could in turn hurt suppliers such as Kimberly-Clark, Johnson & Johnson and Procter & Gamble, Bloomberg reports.

The full implications of the move are still unclear, but it does prove that Amazon’s resources are not unlimited. If Amazon customers find it more difficult to buy cheap health items online, c-stores may see those consumers more willing to purchase them in-store.