US News

Walmart: Revolutionizing Delivery with AI

Walmart kicked off the month by introducing an early morning delivery service and announced plans to sell its AI-powered delivery software to reduce delivery times for its partners. Developed by Walmart’s Commerce Technologies division, this customizable software optimizes driving routes by analyzing traffic, vehicle capacity, and customer location, significantly cutting down travel distances. Anshu Bhardwaj, COO of Walmart Commerce Technologies, highlighted the cost and development savings for businesses adopting this technology. With a pricing model based on shipment volume and frequency, Walmart aims to enhance efficiency to better compete with Amazon and Target, having reduced last-mile delivery costs by about 20% and achieving nearly 50% growth in home delivery sales.

Temu: Enhancing Local Presence for Faster Delivery

Temu has opened its doors to US sellers for local warehousing, shifting from its previous consignment model primarily involving Chinese sellers with US warehouses. Despite having 150,000 consignment sellers, the 1,000 Chinese sellers now in the US have struggled to match Amazon’s rapid shipping services. This move aims to shorten delivery times significantly, with Temu facing challenges in integrating orders and timely delivery. The next phase involves partnering with US brands and retailers, not just relying on Chinese sellers with US stock, positioning Temu to rival platforms like Amazon and eBay.

Outdoor Voices: Shifting to Pure Online Retail

Athletic apparel brand Outdoor Voices has announced the closure of all its stores to pivot entirely to online sales. The company will liquidate its remaining inventory at a discount but has not offered severance to its employees. Once celebrated as a direct-to-consumer darling and potential next Lululemon, Outdoor Voices targeted casual exercisers with its “light exercise” apparel. Despite securing nearly $65 million in funding and experiencing significant sales growth, internal conflicts and leadership changes have led to a steep decline in its valuation and rumors of a sale.

Global News

Amazon: Launching Delivery Service Partner Program in Australia

Amazon is set to introduce its Delivery Service Partner (DSP) program in Australia this year, targeting sellers in Sydney, Melbourne, and Brisbane. The program offers comprehensive support, including training, technology, and discounts on assets and services, to help sellers with little logistics experience start their delivery businesses. With plans to manage fleets of 20-40 delivery vehicles, the DSP program aims to create hundreds of permanent jobs for drivers in Australia, enhancing Amazon’s last-mile network to meet growing customer demands and improve delivery experiences.

Walmart: Expanding Investment in Mexico

Walmart has announced a $2 billion investment in the Mexican market for 2024, marking a 19% increase from the previous year. Approximately 45% of this investment will go towards renovating and maintaining existing stores, with 29% allocated for new store expansion, 15% for optimizing the supply chain, and the remaining 11% for omnichannel and technology projects, including online platform improvements and distribution center automation. Bodega Aurrera will continue to be Walmart’s primary operating model in Mexico. As of the end of 2023, Walmart operated 3007 stores in Mexico and 896 in Central America, with sales totaling 886.5 billion pesos. This investment is part of Walmart’s ongoing efforts to strengthen its presence in the Latin American market, amidst increasing investments in Mexico by e-commerce giants like Amazon and Costco.

Zalando: Unveiling a New Growth Strategy

Zalando has announced a new growth strategy focused on building a leading pan-European e-commerce ecosystem in the B2C and B2B sectors, aiming to capture a larger share of the fashion and lifestyle market and deepen relationships with partners. In the B2C domain, Zalando plans to introduce specialized products in categories such as sports, children, and home, expanding digital experiences and offering personalized entertainment to stand out in the market. For B2B, Zalando recently launched the Zalando E-commerce Operating System (ZEOS), enabling brands and retailers to manage their multi-channel business on a unified platform.

Leveraging its logistics, software, and service capabilities, Zalando aims to support the e-commerce ventures of various clients, aspiring to develop this into a multi-billion euro business. CFO Sandra Dembeck noted an improvement in profitability, with Zalando projecting a 0-5% growth in GMV (Gross Merchandise Volume) and revenue for 2024 compared to 2023, and an EBIT (Earnings Before Interest and Taxes) forecast of €380 million to €450 million, focusing on profit growth.

Sweden’s E-commerce Landscape Stabilizes

In 2023, Sweden’s online net sales slightly dipped to €11.75 billion, a 2% decrease from the previous year’s €12 billion, indicating a stabilization in annual net sales. This information, derived from PostNord’s annual report, excludes services and B2B sales. The shift towards profitability amidst declining growth rates, inflation, and rising interest costs has seen Swedish low-cost market participants thrive amid increased global competition. Notably, the beauty sector saw an 18% growth, reaching net sales of €353.4 million, followed by the online pharmacy sector with a 17% increase. However, the hardware sector experienced a significant 19% decline.

Salesupply Expands into Scandinavia

Dutch fulfillment company Salesupply is extending its global network into Scandinavia by opening fulfillment centers in Sweden and Denmark. This expansion aims to simplify cross-border sales for online merchants by offering a cost-effective alternative to expensive international last-mile deliveries. Merchants can save up to €5 per parcel on last-mile delivery by storing products locally, enabling them to operate similarly to local sellers due to partnerships with local parcel couriers.

AI News

OpenAI: Introducing Sora, the Next-Gen Video Generation AI

OpenAI’s CTO, Mira Murati, revealed that Sora, their highly anticipated video generation AI, is set to launch this year after an exclusive beta phase for visual artists, designers, and filmmakers. Sora will support sound effects and allow users to edit AI-generated video content, aiming to integrate with third-party developer products and possibly future versions of video editing tools like Adobe Premiere Pro or Apple Final Cut Pro. Despite current limitations in depicting detailed human hand movements, OpenAI plans to mark Sora-generated videos with a watermark and metadata for authenticity verification, ensuring viewers can distinguish between AI-generated and real footage.

Apple May Partner with Google for AI iPhone Features

Apple is reportedly in discussions with Google to license the Gemini AI for enhancing iPhone features, indicating a significant move towards integrating generative AI capabilities. While the deal is not yet finalized, it underscores Apple’s strategy to leverage external AI expertise alongside its developments, such as the internally tested Ajax system and the more rudimentary Apple GPT.

Elon Musk’s XAI Launches Grok for Commercial Use

Elon Musk’s AI startup, XAI, has made its Grok model available for commercial applications. Grok-1, a 314 billion parameter model, is designed to offer a less filtered alternative to ChatGPT, aiming to provide comprehensive responses akin to the Hitchhiker’s Guide to the Galaxy. This open-source model encourages further development and innovation in AI applications.

Cisco’s Strategic Acquisition of Splunk

Cisco has announced its intention to acquire Splunk for approximately $28 billion, aiming to enhance organizational security and resilience in the AI-driven landscape. This acquisition is expected to position Cisco and Splunk as leaders in security and observability, leveraging their combined strengths to address the complexities of modern digital environments. The deal, expected to close by the end of the third quarter of 2024, signifies a major step in Cisco’s business transformation towards more recurring revenue and underscores the synergy between the two companies’ AI, security, and observability capabilities.