August 29, 2013

Consumer confidence in logistics continues to grow – 15 percent in the first half of 2013. That’s great news as the U.S. economy continues to show signs that it’s bouncing back.

That’s a great shot in the arm for all businesses. That’s on top of today’s news that the Commerce Department has sharply revised – upwards – 2nd Quarter GDP figures. Continue reading Good News Department: Consumer Confidence in Logistics Grows

August 28, 2013

Image representing Twitter as depicted in Crun...

Twitter has appointed its first head of commerce, Nathan Hubbard, as it begins an e-commerce initiative. Details are sparse on how Twitter will facilitate retail in 140 characters or less.

Hubbard, the former president of Ticketmaster, said only that “We’re going to go to people who have stuff to sell and help them use Twitter to sell it more effectively,” in an statement to Business of Fashion. The article goes on to say that Hubbard will seek partnerships with retailers and payment services companies, rather than entering head-to-head competition. The move is intended to raise additional revenue as Twitter looks to an IPO in the months ahead.

How’s Social Media Working Out for Retail?

Twitter’s foray into social media comes at a time when social media is not working as well hoped for retailers.

Although some business sectors are taking a second look at Twitter for business marketing, a study of prestige retailers the digital consultancy L2  found that over the past four years, less than 0.25% of new customers have been acquired through Facebook and less than .01% from Twitter. In addition, the research disclosed that customers gained via social media spend less than other customers.

A number of retailers opened up Facebook stores to great fanfare in 2011. With the exception of Tory Burch, most are now closed, including:  Oscar de la Renta. the Gap, J.C. Penney, Nordstrom, GameStop.

It would appear that the strategy that works best on social media is word of mouth. When someone hears from a friend or other trusted source that something works, they’re more likely to go with it. Pinterest has provided a great example of this type of personal “show and tell.” Brands may be finding that what works best is to make it easier for people to find and order items that they see and hear about from their own networks.

August 19, 2013
Image representing Alibaba as depicted in Crun...
China’s Alibab is on a U.S. acquisition spress.

Chinese e-commerce giant Alibaba is on an investment spree. The latest is a $75 million minority investment in premium shipping site ShopRunner. Shoprunner offers services similar to those provided by Amazon Prime. The deal follows a similar investment in Fanatics, a US sports merchandise e-commerce company.

What does this mean for those of us in the shipping and and logistics field? The obvious message is that the Chinese and Alibaba, specifically, are clearly bullish on e-commerce. It is indeed the Chinese market that holds the key to extraordinary growth in retail. Anyone who is able to tap even a part of that market is laying claim to a golden goose.

Alibaba’s U.S. acquisitions are also indicative of its desire to learn some of the finer points of e-commerce as practiced in the U.S. as well as the importance it places on e-commerce in the run up to its expected IPO later this year or early next. E-commerce continues to grow at a rapid clip in the U.S., enjoying double digit growth as warehouse availability is at a premium.

This trend has been in evidence the last couple of years as Capacity LLC has worked a number of its retail clients to develop processes and systems that enable them to handle consumer orders directly. It has been an extraordinarily exciting time for us as we have increasingly served as the conduit between a number of consumer brands and their customers. From the vantage point of our warehouse floors, it’s a trend that we see increasing dramatically in the months and years ahead.

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August 16, 2013
Capacity LLC Warehouse
Here’s the scene inside one of our New Jersey warehouses.

Warehouse demand is increasing as e-commerce becomes an ever more important part of the economy. The economic recovery and continued improvements in technology have enabled the warehouse sector to grow and emerge from the turbulence of past years, according to the Financial Times. Prologis, the world’s largest industrial landlord, has noted that this has caused rental rates to rise after falling by more than 25 percent during the Great Recession.

We’re wondering the growth noted by Prologis has been in part a result of the increased diversity of services offered by warehousing companies. As the economy expands beyond brick and mortar stores into a more diverse economy retailers and consumers are asking for an array of services ranging from custom packaging to same or next day delivery services.

Prologis, whose clients include Amazon, FedEx, Unilever and Home Depot reports that vacancies in its buildings greater than 250,000 sq ft, stand at only 1 per cent while there’s not room at those more than 500,000 sq ft.

In the Financial Times article Prologis also commented on the difficulty of modifying existing warehouse space for the demands of e-commerce. Those of you who know Capacity LLC are aware that this is a development that has occupied many of our waking hours. We’re obsessed with applying cutting edge technologies and offering the latest services to both our traditional and e-commerce clients. As the economy, thankfully, begins to grow once again, we’re excited about working with our clients to expand their businesses.

 

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August 12, 2013

Amazon Art LogoAmazon has now offered fine art to the products available for direct shipment to your home via its new Amazon Art marketplace. You can spend anywhere from south of $200 to more than $2 million, depending on your taste and the size of your wallet.

Spending $2 million on Amazon? Yes, you read that number correctly. But let’s start at the beginning. Last week Amazon opened Amazon Art, a marketplace to view and buy contemporary and classic art. Amazon is working with more than 150 high profile galleries from across the U.S. and Canada. Initially it is offering 40,000 works by 4,500 artists.

That $2 million piece, it’s Claude Monet’s “Fragment de Nympheas,” a piece that will set you back some $2.5 million. Also for sale are works by Andy Warhol and Norman Rockwell. In all, there are now 85 works priced above $10,000. These high-profile offerings may be more for public relations consumption than anything else, but Amazon Art is a very real initiative.

Art is not new to the realm of e-commerce but Amazon’s entry into the space represents a change of scale and perspective. With its visibility literally to millions of people, Amazon is making gallery art more accessible to a larger marketplace. The e-tailer is also aggregating works represented by dozens of galleries in one marketplace.

Only time will tell if people are willing to add Monets to their shopping carts – the same shopping carts that usually hold books and replacement ink cartridges. There are also a few unanswered questions. For example, how will the higher priced offerings be authenticated? There’s also the shipping. This is not your your average pick and pack. All art shipments require a special touch, one that we say modestly, we have come close to perfecting at Capacity LLC.

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