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Enterprise hits and misses - Retailers' pre-holiday news is problematic, Amazon's layoffs wake up Alexa, and low-code gets a reality check

Jon Reed Profile picture for user jreed November 21, 2022
Summary:
This week - Walmart and Target issue mixed earning news - where does consumer sentiment lie? Amazon's pending layoffs are another wake up call, and Alexa teams are impacted. Flexible work data is complicated, as is low-code adoption. Your whiffs include Web3 vinegar from yours truly.

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Lead story - Walmart and Target report in - will consumer sentiment bring the retail holiday season down?

We don't know what type of holiday results retailers will achieve - but based on what we're seeing from Walmart and Target, I've got concerns. As Stuart reported in Walmart's drug problem doesn't help, but there's a return to omni-channel form as the Holidays loom, Walmart showed resilience. Start with Walmart's good news: the omni-play is looking good, with digital sales up, and app usage cited as a differentiator. Stuart quotes Walmart CEO Doug McMillon: 

As a total company, we're seeing strength in stores, clubs and e-commerce. Transactions are positive, and our penetration of e-commerce sales continues to climb. So far this year, 13% of our total sales as a company now start in a digital fashion, and that's led by Walmart International, which is already at 20%.

However, by my reading, Walmart's relative strength is precisely due to price-conscious consumers heading in Walmart's direction. More from McMillon:

With the cost of everyday items still stubbornly high in too many categories, more customers and members are choosing us for the value and assortment we're known for and they're responding to the changes we've made to save them time. With this in mind, we're focusing on earning repeat business from customers who are now shopping with us more frequently than before.

Stuart concludes:

Opiod embarrassment aside, this is not a bad omni-channel return to form for Walmart.

Alas, I fear Walmart may be the outlier/exception. Target, a retailer with a habit of riding high, may be the holiday wake-up call. Stuart picks up that story in Inflation, recession and shoplifters - omni-channel retail bellwether Target doesn't have its problems to look for.  He quotes Target CEO Brian Cornell:

Consumers are feeling increasing levels of stress, driven by persistently high inflation, rapidly rising interest rates, and an elevated sense of uncertainty about their economic prospects. With high rates of inflation continuing to erode their purchasing power, many consumers this year have relied on borrowing or dipping into their savings to manage their weekly budgets. But for many consumers, those options are starting to run out. As a result, our guests are exhibiting increasing price sensitivity, becoming more focused on and responsive to promotions and more hesitant to purchase at full price.

To me, that raises holiday flags. If Target's "normal pricing" isn't perceived as a bargain, what will be? One small silver lining:  global supply chain issues may be lessening a tad. Stuart quotes Target's COO:

The good news is that the lead times in global shipping have started to move in the right direction. More specifically, compared with the second quarter, lead times improved by about 15% in Q3 and were more than three weeks shorter than a year ago.

Obviously, retailers will get a holiday bump. The question is: what type of bump - and will any of that momentum carry? Early signs imply the "headwinds" will be blowing hard into the new year. Stuart:

The Holiday season is now here and Hennington argues that customer sentiment appears focused on ensuring that this is a positive experience. Whether that translates into more positive results remans to be seen.

Diginomica picks - my top stories on diginomica this week

  • Why flexible working policies need to improve to counter the Great Resignation - Alex crunches a flexible work survey by Unit4 that isn't easy to grapple with. The problem statement is the easier part: "With the Future of Work in the Vaccine Economy still very much open to debate, staff retention is a major challenge. Attracting and retaining talent is the biggest priority for organizations over the next 12 months, cited by 63% of respondents. So when 39% of organizations admit to seeing people leave their employ in search of more flexibility elsewhere over the past year, that’s a problem." But the harder part is: where do we go from here? And how do we ensure that talent and diversity commitments stay on track? Alex opens that pandora's box and tries to make sense of it.
  • Data overload is a real thing - can causal emergence reframe the problem? - While organizations confront the data deluge, and strive to find an insight in there somewhere, Neil has a different idea: rethink the premise.

Vendor analysis, diginomica style. Here's my three top choices from our vendor coverage:

A fresh batch of customer use cases, including:

A few more vendor picks, without the quotables:

Best of the enterprise web

Waiter suggesting a bottle of wine to a customer

My top seven

Overworked businessman

Whiffs

Lots of big tech companies jockeying for "who had the worst week?" position. Meta evidently wants in:

It's going to be hard to push Amazon out of pole position though:

Ticketmaster wants in too:

This isn't really a whiff, but my colleague Phil Wainewright surfaced a dandy for us - and a reminder we can all use:

Finally, I couldn't resist teeing off on this one:

Unsolicited tip for enterprise vendors: maybe there's a better way to be cool and hip at your next show than associate yourself with NFTs, as if they are cool and hip. Being volatile and highly leveraged isn't exactly a new trick... See you next time.

If you find an #ensw piece that qualifies for hits and misses - in a good or bad way - let me know in the comments as Clive (almost) always does. Most Enterprise hits and misses articles are selected from my curated @jonerpnewsfeed.

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