Tales of eTail West, big data, and e-commerce success—or failure

The Retail Death Star (a euphemism for whoever you think it is) has such a glowing reputation for its acumen with data that other companies clamor to know how the Death Star does it. Personal experience suggests myth does not match reality.

I attend the eTail West event, annually if I am able, because that’s where the enablers hang out. The worlds of retail, fashion, and e-commerce offer plenty of glitz and glamor. If what you are looking for, however, are serious discussions and actionable business opportunities with the big data and analytics providers, and like-minded brands and retailers, that are putting data-driven strategies and systems in place to make retail and e-commerce go, eTail West is a great place for that.

It was at eTail West last year that a series of events began unfolding that opened my eyes as to some changing realities in data and commerce. None of these is especially noteworthy on its own, but collectively, they speak to the occasionally eye-popping results that are possible when companies put actionable analytics to work across their operations—and to the disappointment, and questioning, that can occur when they (apparently) do not.

At eTail West 2017, I had my normal full schedule of briefings and events with vendors, brands, and retailers in full swing when sales types in one of our world regions picked up the red phone to our company’s top executives, whereupon said execs reached out, um, enthusiastically to me to put together something sizable and crucial in about 24 hours. The mission: Create an analysis on spec in the hopes of dazzling a hot sales prospect in the aforementioned red-phone region. The subject: how effectively an entity I refer to as the Retail Death Star uses analytic insights to bedevil the competition (yes, I mean Amazom.com). Using a bracing combination of secondary and primary research, analyst magic, and Starbucks, I pulled it off to (muffled internal) applause. I analyzed how the Death Star is combining some truly high-quality third-party vendor offerings with its own internal data smarts to create systems and processes that use data about a lot of relevant things including the weather to anticipate and meet consumer demand.

The Death Star is not ‘killing it’ for this online shopper

My command performance, however, is not really the point. This is. Over the past year, intrigued by the fireworks and hurrahs emanating from the Death Star seeing its acquisition of a property designed to propel the Death Star into the thick of the e-commerce derby and noting its more aggressive e-commerce posture in the market, as well as its whiz-bang new website, I have placed two separate online orders with the Death Star.

The Death Star has now gone two-for-two on those orders.

As in, it has promised me rapid delivery of these items guaranteed to help me save money and live better and sent me upbeat updates tracking the fulfillment process …before ultimately failing to complete both orders. These were not by any stretch of the imagination, in the words of the Bon Qui Qui character on MadTV, “complicated orders.” The most recent one was for a cocoa welcome mat. After sending me promise after promise—including an email it sent on 19 April guaranteeing delivery on 18 April—the Death Star did what I suppose it knows best: lowering the price and dropping the shipping charges. It did so only after I had reached out wanting to know where our order was, but I suppose it’s the discount that counts. In the end, though, after all the order intrigue, the Death Star left me feeling order-unfilled.

If this is what hot competition for Amazon’s e-commerce dominance looks like, Jeff Bezos can sleep even more soundly tonight on his comfy cushion of billions.

Enthusiastic product presentation and order execution followed by fulfillment failure mean one thing: the kinds of data gaps, disconnects, and mismatches we at Stratecast have been analyzing for years that are blowing a several-trillion-dollar hole in the global retail and e-commerce economy.

Two-day delivery? Same-day delivery? How do you feel about delivery in minutes?

My purchase was ordered, promised, tracked, and showed up, on time and without a hitch—from Amazon.

“So, what? We all know about Amazon.” So, this: at eTail West 2018 I encountered a company that is positioning itself to give both Amazon and the Death Star a run for their money, and which made me feel a whole lot better about the state of competition in e-commerce.

JD.com claims to be China’s largest online retailer and largest overall retailer, as well as the country’s largest Internet company by revenue, and one of the top three e-commerce sites on the planet.

Retailers must grapple with the move toward everyone expecting to be able to obtain virtually anything by pushing a button. That and four other data-driven megatrends are shaping global markets: artificial intelligence moving into virtually every aspect of business and society; increasing social connectedness not merely for social interaction purposes, but to drive transactions and commerce; organizations controlling more of the supply chain themselves to reduce risk and increase customer experience; and, as part of that expansion, experimenting with drones to speed delivery of physical products to customers and reduce costs.

JD.com is stepping up in all of these areas, and its shopping app and e-commerce website are just the beginning. The company now has control of much of its supply chain, leaving nothing to chance in terms of ordering, merchandise, inventory, or fulfillment. It receives a lot of its orders via the WeChat messaging platform, which enjoys a Facebook Messenger level of ubiquity in China and is already a thriving e-commerce engine there. JD.com also has bustling AI and robotics labs and is experimenting with drones to handle fulfillment. It is also tapping into the trend toward “Uberization”: Employees can deliver goods to customers located in range of their daily commute and are paid their regular wages and mileage costs to do so.

Competitors have captured much attention (particularly in the US) for offering free two-day shipping, and even same-day delivery on many items. JD.com is using a razor-sharp command of data and distribution to beat even that. By crunching massive amounts of data to perform predictive analytics in real time, JD.com is able to predict purchases with such timeliness and accuracy that in many cases it is able, for example, to station JD.com delivery teams at the edges of residential centers with goods for which consumers are imminently placing orders; in some cases, consumers are receiving their orders in minutes.

What about ‘that other China e-commerce competitor’ and stock market darling?

Great, you ask, but where is Alibaba in all this? For its part, Alibaba positions itself as China’s (“and by some measures, the world’s”) largest online commerce company. Alibaba handles more business than any other e-commerce company, and transactions on its online sites totaled $248 billion last year, more than those of eBay and Amazon.com combined.

Much of JD.com’s competitive thrust versus Alibaba in their common home market of China comes down to supply chain and distribution. JD.com controls much of the native infrastructure in China with regard to shipping and other logistics. More broadly, though, it commands a range of commerce and logistical capabilities that would take the combination of Amazon, WeChat, and FedEx to match.

Ultimately the success of JD.com and Alibaba on the world stage is going to hinge on the ability of each to drive revenue in the Americas. JD.com is moving rapidly toward expanding into the US; US businesses have already exported an estimated $15 billion to $20 billion in goods to Alibaba customers in China.

Whoever wins the battle for e-commerce supremacy in China, and other battles in other nations and regions, one thing about which I am certain is that avoiding a global monopoly on a broad swath of the goods and services we all need or want is kind of important. Another is that data holds the key.

This article is published as part of the IDG Contributor Network. Want to Join?