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.
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:
- PTC's field service long game pays off with $1.46 billion purchase of ServiceMax, complete with "Salesforce angle" - Stuart on a surprising, yet not surprising acquisition: "This latest stage in the ServiceMax story came somewhat out of the blue, but the pitch from PTC’s Heppelmann is a compelling one. That Salesforce angle is going to be one to watch."
- Ceridian Insights - a master class on how to work with prospects at a user conference - Brian reviews a show that raised the bar in terms of prospect engagement.
- Workday Rising EMEA - DEI spirit is willing, but the strategy is weak - Phil takes on a key theme from his time on the ground at Workday Rising EMEA: "DEI needs to be much more than a checkbox for organizations to tick. Workday's survey shows that, despite a great deal of enthusiasm to be involved, the space is still relatively immature in terms of actually achieving measurable results."
- SAP TechEd 2022 - low-code tools take center stage with the launch of SAP Build, but is it the right message? - My SAP TechEd review, which I wrote based on my virtual media access and interviews, stirred several different pots - enough that I had to update my article. To me, the most important debate from this article goes beyond SAP. It even goes beyond low-code, and how we separate low-code hype from reality. It's about changing the IT - business dialogue, and whether new tools offer any chance of advancing that conversation. Debating who should give up control, to me, is a very limited way of framing this. It's about how all project stakeholders have to change, if we want to deliver more successful projects. Yes, that includes external stakeholders too, from vendors to services firms to, yes, even media/analysts.
A fresh batch of customer use cases, including:
- Baylor University’s CIO gives masterclass on Cloud ERP support requirements - Oracle use case by Brian
- How Rentokil drives business innovation with Google Cloud VMware engine - Mark Samuels
- Third sector organizations turn to Adobe to visualize their message - Cath
- British Government department DEFRA finds NextGen talent with ServiceNow skills programme - Derek
A few more vendor picks, without the quotables:
- COP27 – businesses see the financial benefits of going green - Madeline
- How TomTom is open to building a digital twin of the planet - Chris
- An inside look at how MongoDB is fostering inclusive spaces for LGBTQ+ people to be celebrated - Derek
Best of the enterprise web
My top seven
- Amazon Has Begun Mass Layoffs - When Amazon embarks on what will likely be the biggest round of layoffs in its history, you know the economy is shifting (though the reporting so far indicates Amazon will attempt to find these employees other roles in the company). The most impacted divisions appear to be those struggling to generate profits, which includes, surprisingly, Alexa.
- Low-code is not a cure for overworked IT departments just yet - Joe McKendrick tosses buzzkill vibes onto the low-code party. Though to be fair, the report McKendrick analyzes does indicate some encouraging productivity savings as well.
- Can consumer-goods makers meet retailers' tighter service standards? - Talk about a buzzkill! McKinsey gives the reality check: when you "delight" customers with superior service, there is often a superior cost to be reckoned with also.
- Rethinking Categories - It's refreshing to read someone from a major analyst firm calling into question excessive software categorization. I don't see how the monetization and preoccupation of categorization helps customers, who need to move beyond point-solutions-thinking to tackle today's problems.
- AWS CEO Adam Selipsky interview before re:Invent 2022 - Since Protocol is shuttering soon, i wanted to pick a piece as tribute to their solid enterprise coverage. I picked this one, a tee-up for one of the biggest enterprise shows of the year.
- Who Is Working to End the Threat of AI-Generated Deepfakes - I might be skeptical about AI making great art, but I'm not skeptical about AI's ability to fake, confuse and canoodle us, and the damage it can cause (including brand damage). "Companies, he said, need to come to know this technology, and implement it into their own systems to make it even more resistant to tampering."
- Continuous Everything with Jon Reed | Switched On with Paul Modderman and James Wood - a bonus bit, me on the podcast hot seat, fielding pointed questions about the relevance (or not) of digital transformation.
Lots of big tech companies jockeying for "who had the worst week?" position. Meta evidently wants in:
New Meta AI demo writes racist and inaccurate scientific literature, gets pulled https://t.co/1cUXloMsWq
-> Meta is on a roll :)
— Jon Reed (@jonerp) November 19, 2022
It's going to be hard to push Amazon out of pole position though:
Amazon Alexa is a money loser as AI, NLU, and conversational teams heavily hit by layoffs https://t.co/1YhYtWu7cf
-> don't worry Alexa users, Amazon isn't stopping Alexa, it's just curtailing any further development to make it smarter and more useful :)
— Jon Reed (@jonerp) November 20, 2022
Ticketmaster wants in too:
Taylor Swift's 'Eras' Tour: Ticketmaster Cancels General Sale https://t.co/4R5myQjaFt
-> so, Ticketmaster got surprised because a lot of peeps wanted to buy Taylor Swift tickets.
Common sense > predictive AI > Ticketmaster hoping it's not too busy lol
— Jon Reed (@jonerp) November 18, 2022
This isn't really a whiff, but my colleague Phil Wainewright surfaced a dandy for us - and a reminder we can all use:
— Phil Wainewright (@philww) November 19, 2022
Finally, I couldn't resist teeing off on this one:
Coachella NFTs Sold for $1.5M—Now They’re Stuck on FTX - Decrypt https://t.co/GXMNmVuxT8
-> sorry for losses but maybe we won't have to hear insufferable crap about how great NFTs are for a week or two. Time to talk about "Web3" futures that aren't tied to crypto or NFT junk
— Jon Reed (@jonerp) November 19, 2022
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.