Connected washing machines and a robot delivering gin. These were just two of the unexpected things I experienced at last week’s IGD Digital Commerce event.
I attended the second day of this visionary event, and I took away quite a few insights and reflections from the day. You’ll be aware that the IGD Supply Chain Summit is coming soon, and I’m sure that will be just as insightful a day – if you haven’t booked, we still have tickets left!
As you’d expect at an event entitled Digital Commerce, there were plenty of new developments being showcased. Yuguang Han, Senior Product Manager with JD.com highlighted Retail-as-a-Service, which involves the retailer making their technology and infrastructure available to partners. JD.com is increasingly renowned for being one of the most advanced retailers in the world, so this seems like an amazing opportunity for other businesses to leapfrog forward. The speaker described JD.com’s role as follows:
- Co-create value
- Empower partners
- Open ecosystem
Chris Conway, Head of Digital at the Co-op made the very clear point that digital is much more than just ecommerce. He showed how store security cameras are now helping them visualise and analyse shelf layouts, and how their digital team has developed an shift management app to help store managers and staff. We took away that his digital development team is increasingly multi-disciplinary, and focused on delivering a range of small but noticeable improvements for Co-op’s people and customers.
This “test, learn and iteratively improve” approach was echoed by Beth Marchant from Sainsbury’s Instore Digital team. We heard how her team are working to improve shopper experiences offline and online. They are testing an app for customers to use instore to scan, pay and walk out, eliminating the need to queue up. But it was the agile and customer-centred approach which most hit home for me from the session.
Transparency and sustainability
Businesses are working hard to keep up with and lead shoppers’ expectations of more ethical, sustainable and transparent operations. Tom Pickford from P&G described an example of rethinking product formats to reduce emissions and shipping costs. In this case he referred to a fascinating new product called DS3 that P&G has “incubated”. DS3 is a range of 8 different home and body care products sold as small solid single-use swatches which have had all the water removed. Compared to standard liquid-based versions of the products, DS3 removes 80% of the weight and 70% of the space, and they are activated by water when used.
We heard from Rachel Jeans of Amazon about their Frustration-Free Packaging programme, partnering with manufacturers to optimise packaging for ecommerce delivery. The most impactful example was a razor shipped to Amazon in theft-resistant (consumer-resistant?) plastic. The manufacturer redesigned the packaging to use a box which could simply be labelled and shipped by Amazon, reducing the amount of air shipped by 82%. Overall, the programme reduced packaging waste by 16% in 2017, avoiding the need for over 300 million Amazon outer boxes.
Yuguang Han from JD.com outlining how it is using blockchain to increase transparency and confidence in the provenance of its food. JD.com is offering consumers the chance to see key shipping, storage and purchasing information. Beef was highlighted in the presentation but it will no doubt be rolled out to other products before long, and JD.com’s influential role in China and worldwide will help build confidence in the technology.
Last mile fulfilment
My final set of reflections look at the changing ways that products will get delivered, starting with JD.com again. We heard about its programme to develop drone technology. The current roll-out is focused on hard-to-reach rural areas, but our speaker also highlighted some research into drones carrying heavier loads. When the payloads are approaching a tonne in weight, you can tell that it is more likely to be part of their logistics operation rather than a last-mile solution.
Tom Pickford from P&G explored the world of gadgets that reorder supplies without you even clicking “Buy Now”. Smart washing machines – who knew? But they make up 10% of the machines sold in the UK last year, and Miele’s latest range have space for bottles of detergent to be connected up and added to each load as needed. So when it runs out, the washing machine just orders more!
We also heard about the hypermarket which fits into a 50m2 city centre space. Thomas Pocher, owner of two Leclerc hypermarkets in Lille described his newest ecommerce offering, called “Drive Piéton” or Pedestrian Drive. Thomas wanted to bring Leclerc’s low prices and wide choice to the urban population, and with these tiny counters in the downtown area, he has done that. Inventory is stored and picked in his edge-of-town warehouses, then small, frequent deliveries are made to the city centre units.
Towards the end of the day, we were treated to a real-life demonstration from Chris Conway, who had an autonomous delivery robot on standby to deliver a prize to the lucky winner at her seat! These small units can be seen in Milton Keynes, UK as part of a trial with Starship Technologies, but it was fun to see one in operation in the hall.
Overall, the event demonstrated to me again the extent to which supply chain is at the heart of leading business strategies. Much of what we heard combined the best of online and offline retailing, and it is getting harder to separate off “pure ecommerce” from shopping more generally. So this flexible omnichannel approach needs to be central to the ongoing development of our supply chains.