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Archives for October 2016

Starbucks offers omnichannel latte

By Ben Ames | October 28, 2016 | 1:21 PM

Stop by your local Starbucks coffee shop and you may see a strange phenomenon; there can be a dozen steaming-hot prepared drinks waiting on the counter, but only a scattered handful of people on foot standing in the café to get them.

What gives? Is the popular coffee chain going out of business? Are the busy employees just training, learning how to make the latest designer latte and generating a stack of free drinks?

No, it turns out that Starbucks is doing just fine. In fact, the unclaimed drinks are a sign that its latest e-commerce fulfillment effort is a hit with consumers. Just like major omnichannel retailers like Walmart and Best Buy, Starbucks has launched a buy-online-pick-up-in-store plan. Retailers across the shopping spectrum offer similar "BOPUS" plans, with giants like Macy’s, Kohl's, and Nordstrom often offering discounts for consumers to pick up purchases themselves and save money on shipping.

Of course, Starbucks doesn't ship hot coffee, but the massive chain sees significant time savings in allowing customers to order ahead. Starbucks rolled out its “Mobile Order & Pay” plan in 2014 for Portland-, Ore.-area users of its mobile app. The offer spread quickly, and the system is now available at some 7,400 stores. If that sounds like a lot, remember that the coffee giant has 24,000 retail stores in 74 countries worldwide.

Clearly, customers enjoy ordering their drinks online, but the new approach is not so popular with some of the chain’s green-aproned employees. It turns out that online orders have a tendency to arrive in massive numbers, burying baristas under a sudden wave of demand for scones, muffins, and cappuccinos. Since consumers can place orders on their own phones nearly simultaneously, the orders accumulate much faster online than when people wait patiently in line to place those orders one by one.

Just this week, I stepped in to my local Starbucks in the middle of the morning commute, and was startled to find it nearly empty at 8:05am. The barista shrugged and said it had been a hectic morning because they’d had 40 orders come in all at once from Starbucks Mobile. He started to explain that some orders took longer to fulfill than others when his colleague called out in a clear voice: “Mobile order for Madeleine!”

And another virtual sale was made.

White House turns up the heat on airlines with baggage refund rule

By Ben Ames | October 19, 2016 | 1:08 PM

More than 700 million passengers are expected to board nine million domestic airline flights in America this year, and many of those travelers pay extra fees to check their baggage.

Now airlines may have to refund those $25 or $50 handling fees for each bag that is delayed in transit, according to a new rule proposed Tuesday by the Obama Administration. Airlines are already required to reimburse passengers for bag fees if their bags are lost, so the new rule would extend that policy to bags that are delayed.

Airlines face a complex challenge in tracking bags as they whisk through the skies above Rhode Island, North Dakota, or New Mexico, touch down briefly at a hub like Atlanta or Denver, and then take off again for final destinations. If approved, the new rules could make them rethink the way they charge for that service.

Just as online retailers are groaning under the weight of shipping and handling fees to support American consumers’ online shopping habit, airlines are trying to recoup the costs of material handling and the effort to track travelers’ bags along airport conveyors, tarmac freight cars, and airplane cargo bays. But instead of promising free shipping or express delivery like Amazon.com and other e-commerce giants, most airlines have followed a very different strategy—charging travelers extra to check their bags at all.

The problem with that strategy is that when an airline provides delayed delivery, it is not holding up its end of the bargain, the White House says. “Passengers should not be charged for services they do not receive,” the U.S. Department of Transportation said.

The proposed regulations would also require large U.S. airlines to overhaul the methodology they use to report mishandled baggage, so that passengers are better informed of their actual chances of receiving their checked baggage in a timely manner. Another proposed change would require airlines to share fee information for services—such as checked baggage or priority boarding—with ticket agents, so that customers can get an all-in-one price when they shop online.

The industry group Airlines for America has announced it plans to contest the proposed new regulations on the basis that airlines themselves have the best incentive to provide competitive fees and services.

 

Logistics saves the day in animated “Storks”

By Ben Ames | October 02, 2016 | 6:57 PM

Take your kid to see a PG-rated movie starring animated, talking animals, and the action is sure to take place in natural or residential settings like the Pleistocene epoch (“Ice Age”), a plastic brick city (“The Lego Movie”), the North Pole (“Happy Feet”), a New York apartment (“The Secret Life of Pets”), or a Toronto ice rink (“Inside Out”).

That streak came to an end on Sept. 23 when Warner Bros. Pictures released “Storks,” an 87-minute comedy adventure that is set in a cavernous warehouse run by a third party logistics provider (3PL) run by birds.

As everyone knows, storks have traditionally cornered the last-mile delivery market for human infants. But 18 years ago, an avian 3PL called Cornerstone decided to abandon that business model and devote its feathered, flapping delivery network to higher-margin parcels from a new client, an enormous online retailer called Corner Store Dot Com.

The movie opens with a flock of bustling package carriers whisking e-commerce purchases such as smartphones to customers impatiently awaiting curbside delivery… a scenario that will sound familiar to anyone who has worked in the logistics and fulfillment sectors in the past decade.

This pedestrian plot thickens when an ambitious stork named Junior (voiced by Andy Samberg) and an orphaned human named Tulip (voiced by Katie Crown) accidentally switch on the forgotten manufacturing line that produces living babies and have to make one last urgent, express delivery to get the kid to its loving family. Other voice actors include Kelsey Grammer, Jennifer Anniston, Jordan Peele, and Keegan-Michael Key.

In the chase scenes that follow, the animals flee through one supply chain milieu after another, from complex conveyors to towering gantry cranes, lift trucks, shipping containers, a maritime port, and a massive containership. As they struggle to deliver the baby—pun fully intended—they interact with a range of logistics equipment such as routing optimization computers, innovative cardboard packaging, and mobile e-commerce apps.

Toward the end of the action, our heroes even escape a kidnapping conundrum by turning to the magic of reverse logistics. You see, the greedy stork CEO Hunter had ordered his penguin henchmen to dress Junior as a baby and tie him to a chair, before Tulip arrived at the last minute and saved the day by… well, you’ve got to see it to believe it.

The opinions expressed herein are those solely of the participants, and do not necessarily represent the views of Agile Business Media, LLC., its properties or its employees.

Thoughts from our editors.



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