Rishi Taparia - Issue #46
Happy Father’s Day to all the Dads out there! This week we look at Microsoft’s version of the Amazon Go experience, drone delivery in China, Macy’s reimagining the store as a big pop-up, Paytm getting into POS space, roads made of solar panels, the economics of the World Cup and more. Enjoy!
Commerce
Microsoft takes aim at Amazon with push for checkout-free retail
Microsoft is supposedly working on technology that would eliminate cashiers and checkout lines from stores, going up against Amazon in the race to develop automated grocery stores. Naturally, Walmart is supposedly interested in collaborating. What I don’t understand is why everyone keeps trying to make this technology work in grocery stores. Retrofitting a store to have the necessary tech will likely cost in the low to mid single digit millions per store, and the efficiency and speed driven in an environment that is full of UPC codes isn’t as much as it would be in other environments. Much has been made about Amazon’s lead here, but the below paragraph from the article was telling (emphasis mine)
The company spent four years building Amazon Go in secret, before launching an employee-only pilot on its Seattle campus in 2016. It collected data for nearly 14 months more before opening the doors to its first Seattle store. Amazon has said it has no plans to introduce checkout-free technology to its Whole Foods Market grocery chain, which it acquired last year.
Amazon will have proven the efficacy of their technology once it’s rolled out at Whole Foods. Until then it is only great marketing.
How e-commerce with drone delivery is taking flight in China - Manna from heaven
Drone delivery an in e-commerce dominated world, little machines whirring overhead ready to drop off diapers or bluetooth headphones on doorsteps within hours or minutes of order is a future that is believed to be coming, just not yet. Amazon made a big splash with their announced desire to do drone delivery but aren’t expected to be in market until at least 2020. Naturally, as with a lot of things, China said “hold my beer”. JD.com is aggressively investing in drones and is already doing autonomous drone delivery to rural locations serving 600m+ people that otherwise wouldn’t have easy access to products. The rural strategy is a good one in my view as it offers a chance to test the product without the need to navigate around overly complex terrain (no skyscrapers to crash into or planes to avoid) while expanding the market and build a loyal user base who is addicted to the offering.
Instagram adds shopping tags directly into Stories
300mm daily Stories users (and growing) + shoppable Stories = a huge revenue opportunity! Instagram announced this week that they are enabling their Stories to now be shoppable, extending the product beyond just the feed. Implied here is that shoppable posts have been working which is not surprising - engaging content with relevant brands behind them leads to high conversion. I’d expect them to push even further into payments over the next few quarters, offering their brands and Insta-celebs even more value added services on top of the platform.
Macy's takes stake in tech retailer b8ta, expands pop-up marketplace
Macy’s is going deep on perfecting the pop-up experience, announcing this week that they are going to be using tech retailer b8ta’s software to scale out The Market @ Macy’s, a pop-up concept they launched earlier this year. They are also investing in b8ta as part of the partnership. This comes on the heels of their acquisition of STORY, a retail concept company they purchased last month. Clearly reimagining the store as more of a customizable space, tech is sure to be of increased focus given they also hired away Home Depot’s tech chief this week.
Domino's Pizza fixing potholes
A pretty amazing marketing move by Domino’s. In an initiative called “Paving for Pizza”, the company is “hoping to save pizzas by filling in potholes in towns across the U.S.” It’s a unique private-public partnership model that could see more adoption, particularly given the increased number of dollars consumers are putting towards value aligned companies.
Retail Therapy: Louis Vuitton serves up $2K ping pong set
Since it is Father’s day might I suggest a set of pingpong paddles for Dad? This one might set you back some though, running for $2k a pair. Forget top spin, this makes my head spin!
FinTech
Paytm to enter the PoS terminal business
Paytm is getting (more) serious about payments. An unnamed executive (who funnily enough is still willing to get directly quoted) spilled the proverbial chane, telling the Times of India that the company will be competing with State Bank of India, ICICI and HDFC with their own terminal solution. According to this article there are currently 3.1 million terminals in market, that in April processed 465 million transactions totaling Rs. 90,300 crore ($13.3bn), so it makes sense for Paytm to get into the space. As always, execution is key.
Adyen's IPO: 90% Pop In One Day Makes It Too Hot
Amsterdam based Adyen went public this week at a $7bn valuation and on the first day popped almost 100%. It cooled off a little towards the end of the week and now has a $12.4bn market cap. An amazing run to date for the company.
Technology
Free Power From Freeways? China Is Testing Roads Paved With Solar Panels
Talk about some pretty incredible technology. Solar panel paved roads are one step closer to becoming reality, with panels having been installed in a section of mountain road in China known for taking a beating from trucks transporting goods through the country. The potential ramifications of this tech at mass scale are vast - cheaper cost of electricity in a renewable format via a road that can pay for itself being one - but we are still a little way away from mass adoption.
AI developers will salivate at Amazon's DeepLens camera
Amazon is making access to computer vision, AI and ML technology with the launch of their DeepLens camera. It’s good for the industry as it makes some of the CV and ML concepts more accessible (and for Amazon it hooks people onto their stack). Well worth a look for a tech team particularly given the $249 price point.
Random Tidbits
Does hosting a World Cup make economic sense?
The greatest sporting event in the world, the World Cup, started this week! It’s often said that hosting a World Cup, or any other major sporting event, can boost a nation’s economy by attracting tourists, initiating infrastructure projects and showcasing countries and cities as good places to do business. This piece evaluates whether the evidence back this up? Tl;dr - it depends.
Investing in Artificial Intelligence, with Ash Fontana
For anyone interesting in artificial intelligence and venture capital, this podcast featuring Patrick O'Shaughnessy and Ash Fontana is a must listen. I’ve known Ash for almost a decade - he’s incredibly sharp and together with the rest of his colleagues at Zetta, invests in companies which build software that uses artificial intelligence methods like machine learning to predict and prescribe outcomes. A great listen.
Quote I’m thinking about: “Accept the things to which fate binds you, and love the people with whom fate brings you together, but do so with all your heart.” Marcus Aurelius