Retail Disruption Watch (May 2019)
CHICAGO — “The definition of frictionless is going to be changing almost daily,” Gray Taylor, executive director of tech standards group Conexxus, said during the recent Connexus Annual Conference in Nashville.
Taylor likened the convenience-store industry to a castle fortified by a moat of its core business of gas, Cokes and smokes. He said this castle is also guarded by the near-instant consumption of most c-store items sold, whether from foodservice or store shelves.
But as industry experts met to discuss strategies to meet the future of retail, tech companies, restaurants and other disruptors—even governments—continued to innovate and find ways to breach that moat.
Click through for recent examples of disruption beyond convenience stores …
Waymo in Detroit
While Ford and other legacy car companies flounder in their efforts to launch self-driving cars, Mountain View, Calif.-based Waymo is preparing to mass produce them, according to TechCrunch.
Google’s autonomous-vehicle (AV) arm recently announced plans to open a Detroit factory by mid-2019 to begin manufacturing Level 4 autonomous vehicles. The Level 4 designation signifies the car can handle all driving functions under specific conditions, including clear weather and roads.
The factory will produce the electric Jaguar I-Pace and the Chrysler Pacifica Hybrid Minivan, both outfitted with Waymo’s AV technology. The announcement comes months after Waymo launched Waymo One, a robo-taxi service in the Phoenix area limited to a small set of customers.
Postmates is coming
Postmates, a San Francisco-based food delivery company, officially serves more than 3,500 cities throughout the United States, giving the firm access to 70% of U.S. households. Customers can place orders from convenience stores, grocery stores and restaurants through Postmates online or through a mobile app with a minimum order of $10.
Musk talks big
Elon Musk, CEO of Tesla, recently made a series of bold claims concerning the company’s upcoming AV capabilities during an investor presentation. “Probably two years from now we’ll make a car with no steering wheels or pedals,” he said. During the meeting, he also claimed that San Francisco-based Tesla has built “the best chip in the world,” and described lidar, a remote sensing method used by many AV companies, as “a fool’s errand.”
He did not stop there. “A year from now, we’ll have over a million cars with full self-driving, software, everything,” said Musk. Bold claims for a man who has become infamous for overpromising and underdelivering.
McDonald's gets smart
Chicago-based McDonald’s is leveraging technology to improve operations and speed up orders during breakfast and at the drive-thru. Restaurant Business reports that some global markets have reduced drive-thru times by 20 to 40 seconds, helped along by the recent $300 million acquisition of decision-logic technology company Dynamic Yield. On a recent earnings call, McDonald's CEO Steve Easterbrook said that the technology is in place in 700 domestic drive-thrus.
Credit to the EU
While U.S. c-stores paid more in swipe fees than they received in profits in 2018, the European Union seems to be making headway against growing interchange charges.
The EU accepted an offer from Visa and Mastercard to cut interchange fees on payments made by European tourists making purchases outside of the EU by 40% on average. The agreement comes after Visa and Mastercard proposed a 0.2% fee on debit card payments and a 0.3% fee on credit card payments made by EU citizens making purchases outside the bloc.