Walmart recently debuted its Walmart Pickup–grocery warehouse to registered customers in the town Bentonville, AR. The test concept offers free service for customers to place their order online any time between two hours to three weeks in advanced. Customers can drive to the grocery warehouse to pickup their groceries by notifying attendants at a kiosk. This new way of grocery shopping will draw the attention of consumers that find shopping to be a major inconvenience.

Photo via Walmart

The service is a great way for Walmart to establish its digital platform amongst its customers. By targeting its online consumers, it provides convenience to parents with young children, seniors and individuals with disabilities. Using its online database, the company can gather information on its customers shopping habits, which will help the company gain insight on its target market. This new business strategy has a much higher cost structure because it would require additional cost to cover its labour and technology fees, which could potentially raise consumer’s cost or reduce company profit. While this approach can differentiate Walmart from other wholesalers, it may not satisfy all customers including average homemakers who typically select their own meats and perishables.  The strategy could also jeopardize Walmart’s cost leadership strategy, since the profit margin for groceries are already so thin, the additional costs could potentially effect the company’s cost advantage. Walmart needs to prepare itself for further obstacles with its new initiative, but if they target the right demographics, its drive-through grocery could become a big hit in the future.

Reference

http://www.forbes.com/sites/retailwire/2014/10/02/walmarts-drive-through-grocery-concept-is-a-head-scratcher/

McDonalds, the number one fast food chain, has encountered some rough edges recently. In August, after the food safety scare in China, the fast-food chain suffered its worst comparable sales in over 10 years. With rising competitors in the fast food industry such as Chipotle and Panera, McDonalds’ brand seems outdated.

Photo via Economictimes

The chain is now testing out tablet-based ordering in several of its locations in the States. This eliminates human interaction and allows for the customers’ meal to be brought out to them without waiting near the counter. With the self-ordering system it gets rid of labour costs, which take up 20% of revenue. Workers demand higher minimum wage costs of 15$, almost double of the current federal minimum wage. With fewer workers, it gives the company flexibility to increase existing workers wages and maximize profitability. In this era where business decisions are made based on customer data bases, using tablets can increase the efficiency of data collections for companies to better track customer preferences and provide them with special marketing promotion and offers. While tablet ordering may not solve all the company’s problems such as the quality of food, the cutting edge technology could attract the younger generations with its efficient service. Automated ordering makes the ordering process more enjoyable and encourages more spending while helping boost performance of the company for the long run.

References

http://www.nasdaq.com/article/tablets-are-the-way-forward-for-mcdonalds-cm398335

This fall Apple has just introduced its Apple Pay that allows people to pay for their everyday goods or services with a touch of a finger using the newly released iPhone. This service is being released in the coming weeks, which has the whole technology industry swarming to profit from future in apps that could replace cash, checks and credit cards.  With Apple’s entry into the digital payment service, commerce giant eBay said it would transform PayPal to make it more predominant in the fast adapting market. Apple Pay is revolutionizing the digital payment market with its fingerprint reader on recent iPhones to confirm the payer’s identity.  The secure mobile payment option on the phone if proven successful will be a huge threat to PayPal.

Photo via Apple

Apple’s differentiation strategy has never ceased to be one step ahead of the crowd. eBay’s recent decision for allowing PayPal to stand-alone could possibly benefit it after Apple’s introduction of Apple Pay. There is not yet an equivalent for Apple Pay on Android devices, which give PayPal a chance to gain back its customers and further prosper in the market. It has the possibility of partnering with Apple’s main competitors in the market including Samsung and Google. As the mobile technology industry is evolving, it will completely change the prospective of how consumers pay. The future of Apple Pay can change day-to-day transactions and open up new possibilities in the mobile payment industry.

References

http://www.nytimes.com/2014/10/01/technology/apple-pay-signals-new-era-at-cash-register.html?ref=business&_r=0