Rishi Taparia - Issue #34
This week: Starbucks opens an innovation center, Instagram expands its commerce footprint, China is playing nice with international FIs, Amazon’s warehouse chaos theory, Costco begins grocery delivery and more. Enjoy!
Commerce
How Starbucks' 20,000 Square Foot Innovation Center Will Bring New Tech To Its 27,000 Locations
Starbucks wants to dog food technology to drive innovation across its 27,000 locations. They are building what they are calling a TRYER Innovation Center, a 20,000 ft space that will be a proverbial ‘store of the future’. Here, they plan on defining problems and opportunities with the Starbucks experience, and find technology that can support those solutions. Instead of going through an otherwise arduous process to get it into a 'traditional’ store, they will then test at the TRYER store. Not the first time this has been tried by a big company, 'innovation centers’ typically fall down at the execution stage. I like the intention to push for rollout here - it has the chance to accelerate the speed of innovation in the experience.
Retailers Stuck In The Industry's Middle Are In Danger
In today’s retail market, stores need to have conviction, whether regarding product offerings, the target clientele or technology strategy. A new study finds low-end and premier chains are thriving given an understanding of at least who they are serving. The rest, not so much.
Shopping on Instagram opens to merchants in 8 new markets, including Canada, Brazil, and the U.K.
Instagram has come a long way since its $1 billion acquisition by Facebook nearly six years ago and has transitioned from quirky photo sharing app to the default social network for hundreds of millions of people. Commerce on social has been underwhelming relative to its perceived opportunity. Originally Pinterest was believed to have the best shot at capturing the latent demand for a social commerce experience, but today it seems to be Instagrams opportunity to lost.
Costco eyes fresh grocery delivery in Canada
Canada’s is proving to be fertile ground for Costco. The biggest warehouse retailer has run a series of experience in country, and now has introduced online grocery delivery.
FinTech
China Allows Foreigners to Enter $27 Trillion Payments Market
In light of recent tariff debate, this is big news. China will permit foreign companies to access its $27 trillion payments market, further opening up the world’s second-largest economy. Foreign companies can start applying for licenses and will be treated in the same way as local firms, Premier Li Keqiang even promising to “protect the intellectual property of foreigners investing in its economy”. Niceties aside, it will be interesting to see how fast international companies jump into the fray given the current political climate and the ever present risk of IP theft. It is a huge opportunity, but at what cost?
How Alibaba and Tencent Became Dominant in Mobile Payments
Speaking of Chinese financial technology behemoths, this quick animated video charts the key steps along their rise to the top.
Technology
China will ban people with poor ‘social credit’ from planes and trains - The Verge
In the most aggressive form of social engineering seen thus far, starting in May, Chinese citizens who rank low on the country’s burgeoning “social credit” system will be in danger of being banned from buying plane or train tickets for up to a year.
Chaos Theory in Amazon Warehouses
A fun piece about chaos theory and how it helps Amazon manage their network of warehouses.
To achieve one of the most efficient e-commerce operations on planet Earth, Amazon has set up warehouses that look like a live-action game of Chutes and Ladders—whizzing with a meticulously coordinated system of conveyor belts, slides, and machines that do various tasks, like attaching labels to boxes and checking weight for quality control.
Random Tidbits
Study: Mapping Apps May Make Traffic Worse
Stuck in bumper to bumper traffic making my commute from SF to Palo Alto, I often wonder if the route I’m being instructed to follow is truly the fastest or if, somewhere deep in the annals of Google, Waze and Google Maps engineers are laughing to themselves at having created this confusion. While not entirely supporting that theory, this article goes in depth into why apps like Waze, Google Maps, and Apple Maps may make traffic conditions worse in some areas.
Quote I’m thinking about: “Skill without imagination is barren.” - Walter Isaacson