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Amazon Almost Killed Target. Then, Target Did the Impossible

In 2017, everyone was laughing at Target.

Sales had continued to slide. Stores were in disrepair. And company leaders were struggling to adapt to the changing behavior of consumers–many of whom were shopping more and more with online retailers like Amazon.

As fellow retailers Macy’s, J.C. Penney, and Gap collectively shuttered hundreds of stores because of similar struggles, analysts said Target should do the same.

But Target executives, led by CEO Brian Cornell, had a different idea. The key to revitalizing Target, they said, was to go on the offensive.

So, in March 2017, Target made a huge announcement: It planned to invest over $7 billion in a turnaround strategy that would include:

  • remodeling existing stores (and opening smaller ones in urban areas);
  • introducing new, private label brands; and,
  • enhancing its digital shopping experience.

Wall Street thought the plan was a disaster. On the day of the announcement, Target suffered its largest stock plunge in almost a decade.

But fast-forward to today, and Target is thriving. First-quarter results for 2019 beat analysts’ expectations. The store’s private-label lines are exploding. And as comparable store sales continue to rise, the stock price is trading at an all-time high.

How did Target do it?

A close look at the company’s brilliant turnaround strategy reveals some major lessons for businesses of any size.

Here are some highlights:

Think long term.

When Target announced its turnaround plan, Cornell expected backlash. He knew investors would hate the idea of stuttering profits for the foreseeable future.

But he held fast to his plan. “We’re investing in our business with a long-term view of years and decades, not months and quarters,” Cornell said at the time.

Cornell knew this reset was necessary because so many Target stores had fallen into disrepair over the years. And while the company was making efforts in e-commerce, it simply didn’t have the infrastructure to deliver.

Contrast that with today. Target has remodeled hundreds of stores, and it has built a hundred “mini-stores” in urban areas like New York and on college campuses (with plans to open dozens more of these every year for the foreseeable future). The company also invested heavily in its e-commerce operations to great benefit. (More on this in a minute.)

By focusing on the long-term health of the company instead of short-term financial performance, Cornell took a page out of Jeff Bezos’s playbook–and it clearly worked.

Leverage your strengths.

Target’s e-commerce infrastructure needed a complete revamp. But could the company really compete with Amazon and Walmart, which were years ahead of the curve?

It could–by doing things a little differently.

Target execs knew that as popular as e-commerce has become, the majority of retail shopping still takes place in physical stores–especially when it comes to clothing.

So Target chose to focus on a model that would maximize its strengths. Known as “ship-to-store,” Target’s e-commerce platform turns physical stores into mini warehouses for online customers. That makes it possible for customers to order a product online, and then pick it up in a store on the same day.

Ship-to-store reduces Target’s shipping and handling costs, and takes advantage of already existing space in physical stores. And if a customer decides to do some shopping while already there at Target, the benefit is two-fold.

Fill a gap.

Consumers had once affectionately referred to Target as “Tarzhay,” an ode to products and style that were affordable yet a step above those offered by competitors like Walmart. Over time, though, Target had created too many labels that were clear misses.

“Tarzhay” had lost its cachet.

But nobody had stepped up to fill that gap of stylish, exclusive clothing for lower prices. So, in an effort to rebuild its reputation, Target doubled down on its exclusive brands. The company has launched 20 private-label lines over the past three years, including brands for modern furniture, kids’ clothes, electronics, and home goods.

The investment paid off: Six of Target’s private-labels each do more than a billion dollars in annual sales. These labels, together with other brands sold exclusively at Target,  contribute nearly a third of the company’s overall revenue (and an even greater percentage of profits).

In addition, Target has worked hard to fill gaps left by unsuccessful competitors. For example, when stores like Toys “R” Us and the Sports Authority went bankrupt, Target saw this as opportunity: market share begging to be gobbled up.

Yes, Target has definitely gotten its groove back. It did so by bucking analysts’ advice, and instead returning to basics:

Thinking long-term. Leveraging strengths. Filling gaps.

I guess Target got the last laugh after all.

By: Justin Bariso Author, EQ Applied

Source: Amazon Almost Killed Target. Then, Target Did the Impossible

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How Leading Enterprises Are Building Blockchain Innovation On AWS

Blockchain hype—led by cryptocurrency headlines—obscures powerful enterprise applications of the technology. We aim to change that. In this series, we’ll bring you insights from Amazon Web Services customers and partners who are using blockchain to change the world.

The world grows more interconnected every day. Businesses collaborate across the globe. Transactions increase in volume and intricacy. Organizations that share sensitive information across public networks risk information leaks and the possibility of sophisticated cyber attacks.

Traditional methods of storing, verifying, and securing transactions struggle to keep pace with this rising complexity. Massive inefficiency results from the need to process and verify information spread across entities. Entire industries exist only to serve as trusted intermediaries between parties. Attempts at automation create fragile webs of APIs.

Blockchain and digital ledger technologies solve these problems by storing transactions in ways that are transparent, immutable, and verifiable. And they allow multiple parties to transact in a trustworthy and efficient manner, with or without a centralized authority.

Many exciting use cases are possible. Manufacturers could build track and trace ledgers that unify data from multiple systems, enabling faster identification of the reasons for product defects. Consumers could see the history of goods from raw materials to last-mile delivery. Insurers could pay claims in seconds. The time it takes to issue a bond through a securities exchange could shrink from months to minutes.

Companies are working to reap the benefits of blockchain, such as greater speed, efficiency, and reduced risk. For example, Gartner calls blockchain one of the top 10 strategic technologies of 2019. Eighty-five percent of enterprises in a Deloitte survey said they invest $500,000 or more annually in blockchain technologies.

Yet few have deployed these systems to production. Significant challenges hamper the transformative potential of blockchain. Businesses cite regulatory issues, technical barriers, security threats, uncertain ROI, and lack of in-house skills as the biggest barriers.

Many of our own customers, such as Nestlé and Singapore Exchange, have told us about the complexity of building scalable enterprise applications on blockchain. Setting up the hardware, networking, and software can be daunting, even before getting to the experimentation phase. This delays potentially life-changing innovations.

Amazon Web Services (AWS) solves these issues in two major ways. First, we built Blockchain on AWS—a set of massively scalable blockchain and distributed ledger services in the cloud. If all you need is a centralized ledger that immutably records all application data changes, there’s Amazon Quantum Ledger Database (Amazon QLDB). If you need to build a distributed application with ledger capabilities and the ability for multiple parties to transact without a trusted central authority, there’s Amazon Managed Blockchain.

Second, we collaborate closely with leading enterprises to speed innovation. From global manufacturers to finance-industry cornerstones, these companies are creating a more scalable, secure, efficient future. For example, they’ve demonstrated that blockchain delivers throughput to handle U.S. securities trading. Others have built solutions to connect small-scale farmers with consumers thousands of miles away.

We’ll highlight these and many other exciting use cases in the coming weeks. We’re thrilled to bring you along on the journey.

For 13 years, Amazon Web Services has been the world’s most comprehensive and broadly adopted cloud platform. AWS offers over 165 fully featured services for compute, storage, databases, networking, analytics, robotics, machine learning and artificial intelligence (AI), Internet of Things (IoT), mobile, security, hybrid, virtual and augmented reality (VR and AR), media, and application development, deployment, and management from 66 Availability Zones (AZs) within 21 geographic regions, spanning the U.S., Australia, Brazil, Canada, China, France, Germany, Hong Kong Special Administrative Region, India, Ireland, Japan, Korea, Singapore, Sweden, and the UK. Millions of customers—including the fastest-growing startups, largest enterprises, and leading government agencies—trust AWS to power their infrastructure, become more agile, and lower costs. To learn more about AWS, visit aws.amazon.com.

Source: How Leading Enterprises Are Building Blockchain Innovation On AWS

 

Amazon Is Launching a New Program to Donate Unsold Products, After Reports That Millions Were Being Destroyed

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Amazon wants its third-party sellers to make better use of their unsold or unwanted products that often get dumped — by giving them away to charity.

Amazon is launching a new donations program, called Fulfillment by Amazon (FBA) Donations, for third-party sellers that store their inventory in Amazon’s warehouses in the U.S. and UK, CNBC has learned. Starting on September 1, the donation program will become the default option for all sellers when they choose to dispose of their unsold or unwanted products stored in Amazon warehouses across those two countries. Sellers can opt out of the program, if they want.

The donations will be distributed to a network of U.S. nonprofits through a group called Good360 and UK charities such as Newlife and Barnardo’s. After this story was published, Amazon announced the program via a blog post on Wednesday afternoon.

The new donations program is designed to reduce the amount of inventory that must be dumped from Amazon’s warehouses, helping the environment and putting otherwise wasted products to some use. Recent reports found that Amazon routinely discards unsold inventory, with one French TV documentary estimating Amazon to have destroyed over 3 million products in France last year. Given that Amazon generates the bulk of its sales in the U.S., the number of destroyed inventory in its U.S. warehouses is likely much larger than those found in other countries.

“This program will reduce the number of products sent to landfills and instead help those in need,” Amazon wrote in the email to sellers announcing the launch.

Sellers who spoke to CNBC said the new program makes it cheaper to donate their unwanted inventory. Amazon charges 50 cents to return unsold inventory to sellers, much more than the 15 cents charged for disposal. Sellers destroy their inventory for a variety of reasons, including returns that are no longer usable or for safety issues.

In an email statement to CNBC, Amazon’s spokesperson confirmed the launch of the new program, adding it’s “working hard” to bring the number of destroyed products to zero.

“At Amazon, the vast majority of returned products are resold to other customers or liquidators, returned to suppliers, or donated to charitable organizations, depending on their condition,” Amazon said.

By: Eugene Kim

Source: https://www.cnbc.com/

 

Jeff Bezos Sells About $1.8 Billion Worth Of Amazon Shares In Three Days

Amazon founder and CEO, Jeff Bezos.

On Wednesday evening, hours after the stock markets had closed, Amazon founder and chief executive Jeff Bezos filed paperwork with the Securities Exchange Commission which showed he had sold $1.8 billion worth of Amazon shares over the final three days of July. After taxes, he will net about $1.4 billion.

Bezos sold slightly more than 900,000 shares of Amazon between July 29 and July 31, when the e-commerce behometh’s stock price was around $1,900 a share. His net worth is now $115 billion, using Wednesday’s closing share price.

The last time that Bezos sold Amazon shares was in October 2018.

The new filings appear to show that Bezos has given his ex-wife MacKenzie 25% of his Amazon stake, or 19.7 million shares. In April, as the couple announced they were getting divorced, Mackenzie tweeted that Jeff would keep 75% of his Amazon stake. Jeff Bezos will continue to exercise voting control over the 19.7 million shares of Amazon he transferred to his wife, according to an SEC filing in April. Her Amazon shares are worth nearly $36.8 billion, making her the third richest woman in the world.

A spokesman for Amazon has not responded to requests for comment.

Jeff Bezos has sold large chunks of Amazon stock before, but this appears to be the largest sale, measured in dollars. Bezos sold Amazon stock worth $1.7 billion in 2017 in two separate transactions in May and November of that year. It was reported that Bezos planned to sell $1 billion worth of stock every year to fund Blue Origin, his space exploration company.

Bezos has done little in terms of philanthropy so far. In September 2018, he announced the Bezos Day One Fund, a $2 billion pledge for two causes: helping homeless families find shelter and creating Montessori-inspired preschools in the U.S.

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Angel Au-Yeung has been a reporter on staff at Forbes Magazine since 2017. She covers the world’s wealthiest entrepreneurs and tracks how they use their money and power.

 

Source: Jeff Bezos Sells About $1.8 Billion Worth Of Amazon Shares In Three Days

DoorDash And Amazon Won’t Change Tipping Policy After Instacart Controversy; If You’re Worried, Carry Cash

The tipping controversy that prompted Instacart to reverse a compensation plan to its contract workers isn’t likely to go away: Rivals DoorDash and Amazon Flex are continuing to adjust driver pay based on how much they get tipped, saying doing so ensures a minimum payout. The practice, which has its roots in the way brick-and-mortar restaurants pay waitstaff, has been adapted to suit the needs of app-based delivery companies…………

Source: DoorDash And Amazon Won’t Change Tipping Policy After Instacart Controversy; If You’re Worried, Carry Cash

Amazon Becomes World’s Most Valuable Company for the First Time Ever With a Market Value of $797billion – Surpassing Microsoft — BCNN1 WP

Amazon has become the world’s most valuable company for the first time, surpassing Microsoft. The shift occurred Monday after Amazon’s shares rose 3 per cent to close at $1,629.51 and lifted the e-commerce leader’s market value to $797billion. Meanwhile, Microsoft’s stock edged up by less than 1 percent to finish at $102.06, leaving the computer […]

via Amazon Becomes World’s Most Valuable Company for the First Time Ever With a Market Value of $797billion – Surpassing Microsoft — BCNN1 WP

Amazon Partners On New Ethereum Marketplace For Enterprises – Sarah Hansen

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Kaleido, a startup that aims to help enterprises implement blockchain technology, has launched a new platform in collaboration with Amazon Web Services (AWS). Kaleido Marketplace will provide tools and protocols for all the components of new blockchain projects, “from the app all the way to the chain,” founder and CEO Steve Cerveny told Forbes. Commodities platform Komgo, whose network of financial institutions includes Citi, ING, Koch Supply and Trading, MUFG Bank, Societe Generale, Credit Agricole Group, BNP Paribas, and Shell, is a current client…………

 

 

 

 

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Black Friday, Cyber Monday sale: Amazon Selling 120 Million ‘Made in India’ Products Worldwide – Livemint

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New Delhi: This year’s Black Friday sale and Cyber Monday sale in the United States and other parts of the world will have a desi touch as e-commerce giant Amazon has teamed up with over 37,000 Indian exporters to sell more than 120 million ‘Made in India’ products.

In a statement, Amazon said customers shopping on Amazon can avail exclusive deals on ‘Made in India’ products from across categories such as electronics, accessories, cookware, clothing, luxury products, toys, home décor, art & crafts, etc during the Black Friday sale.

The ‘Made in India’ products are being sold to Amazon customers worldwide for the biggest shopping season in the US and some other countries under Amazon’s Global Selling Program.

“I’m very excited for the international holiday season on Amazon, particularly Black Friday and Cyber Monday. Last year, it was our first global sale season on Amazon and we did 2X of our regular sales, which was completely unexpected. This year we’ve invested a lot more in our portfolio of products, added enhanced content, continuing to use FBA, and expect a surge of 3-4X from last year sales,” said Mobashir, owner of Estalon and a seller under Amazon’s Global Selling Program.

Cyber Monday was the single biggest shopping day worldwide for Amazon last year, and the biggest day ever for small businesses and entrepreneurs selling on Amazon. Customers ordered nearly 140 million items from small businesses alone.

Even Indian exporter on Amazon witnessed a revenue growth of over 1.5X year on year during Black Friday and Cyber Monday shopping season in 2017. Products in categories such as home, books, health and personal care, apparel, beauty, and office products were the most popular. In 2018, in addition to the popular categories of 2017, newer products in categories such as checkbook covers, sling bags, Christmas bedding, tool aprons, personalized wallets, aroma oils, etc. will be offered on exclusive deals during the shopping season.

A significant number of products have already been shipped to Amazon Fulfilment Centres worldwide to facilitate one day delivery to Amazon Prime members. Customers shopping on Amazon will have a fast and reliable delivery experience during the upcoming shopping season for ‘Made in India’ products.

Amazon Black Friday Deals Week 2018: Fire Stick And Echo Dot Bundles At Huge Price Cut – Madeline Kaufman

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If you’re looking to buy a Fire Stick and or maybe you want to invest in an Echo Dot, here is your perfect opportunity. Or, if you’re looking for two tech gifts for your Amazon product-lover, we’ve got a treat for you. Today, you can save $40 on either the Fire TV Stick 4k and a 3rd generation Echo Dot or a Fire TV Stick and a 2nd generation Echo Dot……….

Read more: https://www.forbes.com/sites/forbes-finds/2018/11/17/amazon-black-friday-deals-2018-fire-stick-and-echo-dot-bundles-at-huge-price-cut/#35bac176a028

 

 

 

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Bezos Is Right To Worry About Amazon’s Future – Bryce Hoffman

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When word leaked out of Seattle that Jeff Bezos had told employees “Amazon will go bankrupt,” the company’s stock took a nose dive. But those comments shouldn’t worry Amazon.com investors; Bezos’ statement should reassure them. Why? Because Bezos was right when he said, “Amazon is not too big to fail.” And while the same can be said of any large corporation, few CEOs are willing to acknowledge that fact. Yet, those few who do  like Bezos  are the sort of self-aware critical thinkers who will help make sure their companies not only survive, but thrive, in the long run……………

Read more: https://www.forbes.com/sites/brycehoffman/2018/11/17/bezos-is-right-to-worry-about-amazons-future/#84ca0c82dc92

 

 

 

 

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