At the end of May, Walmart announced an expansion of its drone-delivery service. By the end of the year, the retail giant plans to offer the service from 34 locations in six states. When the service started, it was only offered from a single store in Arkansas and with this expansion; they hope to reach up to 4 million households.

The service will operate between 8AM and 8PM and deliver packages weighing less than 10 pounds. The service will be operated by a company Walmart has invested in--DroneUp. There will be a charge of $3.99 for the delivery. The order is packed into a box and a DroneUp pilot flies the drone to the customer’s location, easing the box gently down on the front lawn with a claw-like device at the end of a sturdy cable.
This program expansion is forecasted to take hundreds of deliveries within a few months to more than a million drone deliveries a year. Walmart is clearly targeting the one or two items that are purchased with quick last-minute trips. The press release stated that the top-selling item at one of the early hubs is Hamburger Helper.

The Wall Street Journal reported that both UPS and FedEx are experimenting with drones but aren’t offering an actual service yet. Alphabet (Google’s parent) has its own drone service called Wing with limited offerings in Virginia and Texas. Wing is also operating in Australia and through the first quarter of 2022, they claim deliveries of over 200,000 parcels.
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And we can’t forget Amazon. As we wrote in Technology This Week Issue 8-49, the company is still experiencing problems with its drone efforts. The big difference for Amazon’s program is that they want the drones to be autonomous rather than piloted. Because of their commitment to “certified pilots,” Walmart will have a tougher time scaling up their efforts. Drone flights, by regulation, must be ‘line-of-sight’ flights. Stores will have to have control towers in their parking lots and are limited to a 1.5-mile radius for deliveries.
We will all keep our eyes on Walmart during the rest of 2022 to see if they will be successful in their new drone efforts. It could be a chance for Walmart to surpass Amazon in a critical technology area in the new retail arena!

Walmart was late in actively addressing competition with Amazon in ecommerce. In its new efforts to meet Amazon’s challenge, the company announced that it has plans to open four new fulfillment centers.

These fulfillment centers are where online orders will be packed and shipped. They are the first of a new breed of logistics for Walmart. The technology-heavy investments they are making involve robotics, machine learning and artificial intelligence.

Walmart said they were working with Knapp, an international logistics provider, to replace their current 12-step manual process with a new 5 steps and doubling the number of orders a location can fulfill in a day. Instead of moving product with people, the new approach will have robots shuttle skiffs to stagers directly, eliminating the need for floor personnel to walk up to nine miles or more a day.

"These four next-generation [fulfillment centers] alone could provide 75% of the U.S. population with next- or two-day shipping on millions of items," David Guggina, Senior Vice President of Innovation and Automation at Walmart U.S., wrote in a blog post.

When the four new centers join the company’s existing 31 dedicated e-commerce fulfillment centers, Walmart believes it will be able to reach 95% of the U.S. population with next- or two-day shipping. And with its 4,700 physical stores, the company could offer same-day delivery to about 80% of the U.S.

Both Walmart and Amazon are focusing on their weaknesses as compared to each other. Walmart is spending billions on logistics and automation and Amazon is spending billions on new physical stores, particularly for groceries (where Walmart dominates.)

Walmart’s new fulfillment centers will be located in Joliet, Illinois; McCordsville, Indiana; Lancaster, Texas; and Greencastle, Pennsylvania—with each planning to hire over 1,000 new workers. 
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Amazon currently has 253 fulfillment centers, 110 sortation centers, and 467 delivery stations in North America, not to mention hundreds of thousands of drivers and over 100 Amazon Air cargo aircraft at the end of 2021.

In our Issue 8-44 [the All Metaverse Issue] we talked about how consumers will migrate to virtual worlds for more and more of their on-line shopping. We now have the first research which confirms that statement. A recent report from CommerceNext, in partnership with Bizrate and The Commerce Experience Collective (CommX), explores whether consumers are really engaging with the metaverse, social commerce and livestream shopping.

Here’s what the research found:

As expected, almost half of those in the survey have never heard of the metaverse and only 5% are familiar with it. The remaining 47% have only a limited understanding of the new virtual worlds. Over 80% of respondents have never used virtual gaming worlds like Second Life or Fortnite. Those that are using virtual gaming represent only 26% of Generation Z respondents.

With the above generalities, it was remarkable that 41% of all respondents said they would like to be able to shop for real-life products in 3D or virtual worlds in the future.

Today, the biggest attraction to virtual commerce is through social platforms. Some 43% of online shoppers say they buy products promoted via social media and 19% purchase products featured on TikTok, Instagram or Talkshop Live.

Livestreams also provide a source of information and desired content in the virtual worlds. The survey found that 54% of shoppers haven’t heard of livestream shopping, 32% recognize the term and 4% have made purchases via the channel. Respondents that used livestreaming said that discovering new products and new facts about known products was a driving force in their use of livestreaming.

Even with the above positive feedback, the study reveals that the metaverse and livestream shopping are lagging behind the hype. It doesn’t, however, mean that retail planners and marketers shouldn’t prepare for eventual adoption.

“Get in early,” advises Raj De Datta, CEO at Bloomreach, which chairs The Commerce Experience Collective. “Initially it was thought that digital goods and services would make up the lion’s share of revenue in the metaverse. But what we’re actually seeing is a crossover from the digital world into the physical, with consumers spending real money on physical products.”

It's clear that while we are treading water waiting for metaverse adoption, we need to be testing alternative strategies to see which ones have the most potential.

“Whether we’re talking about traditional brick-and-mortar, e-comm or the metaverse, brands that focus on a personalized, tailored experience are the ones that will end up rising to the top,” De Datta said. 
He recommends testing ideas with your existing customer base. 
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“You might consider a digital pop-up shop that caters to a specific existing customer who has already exhibited certain preferences in your e-commerce environment,” he noted. “This kind of cross-pollination is a highly strategic way to engage in a test.” 

If you're among the millions of people who use payment apps like PayPal, Venmo, Square, and other third-party electronic payment networks, you could be affected by a tax reporting change that goes into effect in January. 

Payment app providers will have to start reporting to the IRS a user's business transactions if, in aggregate, they total $600 or more for the year. A business transaction is defined as payment for a good or service.

Prior to this change, app providers only had to send the IRS a Form 1099-K if an individual account had at least 200 business transactions in a year and if those transactions combined resulted in gross payments of at least $20,000.

The expansion of the reporting rule results from a provision in the American Rescue Plan, which was signed into law earlier this year. The aim of the provision is to clamp down on unreported, taxable income. 

Keep in mind, the new reporting threshold does not change your basic tax responsibilities. Income you receive for a good or service—including tips—has always been reportable and, most times, taxable. 

And you've always been responsible for reporting it on your tax return, regardless of whether a third party sends the information to the IRS.

The rule change also does not make other transactions suddenly taxable. For instance, your friend sending you money on Venmo to reimburse you for their half of last night's dinner tab will not become taxable.

The biggest change is the increased visibility the IRS will have into business income transactions, both those that have always been reported by the income recipient and those that haven't been. 

In theory, the only people who should be worried about the rule change are those who weren't reporting all their business income. "Those who are tax evaders, who violated the self-reporting rules and used the old thresholds to avoid paying taxes," said Scott Talbott, spokesperson for the Electronic Transaction Association.
But, tax experts say, the threshold change could mean some administrative hassles for many tax filers who use payment apps, whether or not they're engaged in business transactions.

"These third-party settlement entities may not know for sure if they are dealing with a business or an individual or if they are dealing with a payment for goods or services, or a non-taxable transaction. It is going to be up to the taxpayer, if they receive a 1099 in any form for a nontaxable event, such as splitting rent among roommates, splitting a dinner bill, or even selling something on eBay for less than you paid for it, to explain to the IRS that the 1099 was received for a non-taxable transaction," said Mark Luscombe, principal analyst for tax publisher Wolters Kluwer Tax & Accounting.

Also, Luscombe noted, there's a fair chance your business transactions may be reported in duplicate—for instance, if you're a freelancer or independent contractor, you might get a 1099-K from your payment app provider, as well as a 1099-NEC or 1099-MISC from your client for the same transaction.

"Again, the taxpayer will have to explain to the IRS that the two 1099s are for the same transaction," he said.

Each app provider must decide which procedures it will use to accommodate the rule change and will need to alert their customers about what will be required of them to better identify the nature of their transactions.

For instance, PayPal, which now owns Venmo, recently put out an initial Q&A for users of both apps. It noted that "In the coming months, we may ask you to provide tax information like your Employer Identification Number (EIN), Individual Tax ID Number (ITIN) or Social Security Number (SSN), if you haven't provided it to us already."
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The net effect of the new reporting requirements for users of payment apps may be that some will ask customers to pay them in cash—at least for smaller amounts, like tips. Or, as Luscombe noted, they may decide to only use an app for taxable business transactions and keep their other, non-taxable transactions separate.

The outbreak of coronavirus is pushing Americans to buy their groceries online, a development that could have a lasting effect on the supermarket industry.

While shopping for books and electronics online and ordering dinner through delivery apps have become staples of American life, most customers still prefer to purchase their meat and vegetables at the store. Last year, just 4% of grocery sales in the United States came online, according to Nielsen.

However, with shoppers stuck in their homes in the wake of the virus, online grocery shopping is exploding. Downloads of Instacart, Walmart's grocery app, and Shipt increased 218%, 160%, and 124%, respectively, last Sunday compared with a year prior.

"We are seeing a larger percentage of customers over the age of 60 that are coming online," said JJ Fleeman, chief e-commerce officer for Ahold Delhaize in the United States, which owns brands like Stop & Shop, Food Lion and the online delivery service Peapod. "We're seeing a lot of new customers coming into the channel."

A third of consumers said Sunday that they had purchased groceries for online pick up or delivery in the past seven days, according to a survey by analysts at Gordon Haskett Research Advisors. Around 41% said they were buying groceries online for the first time.

"Consumer behaviors always shift in times of disaster," said Doug Baker, vice president of industry relations at FMI, a trade group for food retailers. "People are learning new skills and how to shop online as a result of what we're experiencing today."

Maria Alvarado in Phoenix usually shops in person for groceries at Walmart or Safeway. Still, she tried ordering online last week for the first time through Walmart's in-store pickup option. She plans to keep using the service.

"Once things go back to normal, I will probably use online again," she said. "It was really easy."

Big grocers like Walmart, Albertsons, Stop & Shop, Meijer, Hy-Vee, and others have been experimenting with new ways to fulfill online orders in recent years. They have increasingly looked to technology to reduce costs and keep aisles from jamming up with shoppers and workers picking customers' orders.

Grocers have been building automated mini-warehouses inside their stores and opening up "dark stores" – locations that look like supermarkets but are closed to customers – to make deliveries and prepare pickup orders.

Yet the crush of demand in the wake of coronavirus has overwhelmed grocers' delivery and pickup networks, causing long waits, cancellations, and outages in some parts of the country. 

"The surge in online grocery orders is causing operational difficulties," said Bill Bishop, CEO of grocery consulting firm Brick Meets Click. 

Grocers are scrambling to adjust and hiring workers to keep up. 

Fleeman from Ahold Delhaize said the company was adding "web servers to help us process the increased demand" and offering more windows for customers to pick up their orders or get delivery.

This shift online during the crisis may reshape the supermarket industry by helping large grocers consolidate their grip, experts predict.

"We see this unfortunate period accelerating structural changes in consumer shopping," possibly by five years, said Seth Sigman, an analyst at Credit Suisse, wrote in a report. "This is driving significant growth in new customers" to Walmart.

Coronavirus "may hasten the adoption" of online delivery and pickup, touching off long-term challenges for smaller chains earlier than expected, Kelly Bania, an analyst for BMO Capital Markets, said in a research report this week. These smaller chains don't have as much capital to invest in building out their delivery infrastructure. And delivery is less profitable for grocers than traditional purchases in stores.

Apple’s new credit card has a curious security feature that will make it much more challenging to carry out credit card fraud.

The aptly-named Apple Card is a new credit card, built into your iPhone Wallet app, which the company says will help customers live a “healthier” financial lifestyle. The card is designed to replace your traditional credit card and give you perks, such as daily cash. Chief among the benefits is a range of security and privacy features, which Apple says – unlike traditional credit card providers – the company doesn’t know where a customer shopped, what they bought, or how much they paid.

But there’s one feature – a one-time unique dynamic security code – that will make it nearly impossible for anyone to use the credit card to make fraudulent purchases.

That three-digit card verification value – or a CVV – on the back of your credit card is usually your last line of defense if someone steals your credit card number, such as if your card is cloned or skimmed by a dodgy ATM or taken from a website through a phishing attack.

But rotating the security code will increase the difficulty for an attacker to use your card without your permission.

The idea of a dynamic credit card number first came about a few years ago with the Motion Code credit card concept, built by Oberthur Technologies, which included a randomly generating number built into a tiny display on the back of the card. The only downside is if someone steals your physical card.

Since then, other credit card makers – including Mastercard, the issuing payment provider for Apple Card – have worked to integrate biometric solutions instead. By enabling a fingerprint sensor on the card, powered by the card machine into which it is inserted, it was hoped that fraudulent purchases would be impossible. Other credit cards have worked to roll out biometric-powered credit cards. Again – a big letdown was online fraud, which still accounts for a vast proportion of fraud.

Apple Card seems to meld the two things: a virtual credit card with a rotating security code, protected by a biometric, like Touch ID or Face ID in newer devices. Better yet, the company’s debut physical titanium credit card won’t even have a credit card number.
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Now, if someone wants to commit fraud, they need to steal your phone and your face or fingerprint.
Like other sensitive data – such as health, financial, and biometric data – any banking and credit card data is stored on the device’s security chip, known as the secure enclave.

Visual search – the ability to initiate a search query using an image captured by the camera lens on a mobile device – has increasingly become a channel that can drive consumers from becoming aware of a product to making a purchase.

Gartner classifies visual search as an emerging technology, which puts it right on par with findings from an eMarketer survey suggesting that few consumers "regularly" use it.

On average, only 3% regularly use visual search, and only 10% have used it in the past, according to the findings. On the other side of the spectrum, 7% are familiar with the technology, according to an eMarketer eCommerce survey conducted in June 2019 by Bizrate Insights and published in August 2019.

Gartner Analyst Mike McGuire points to artificial intelligence (AI), which sits high on the list of transformational trends, as an important technology that supports visual search platforms like Google Lens and Prism.

Google, Microsoft, Pinterest, and other augmented reality vendors continue to invest in visual search. Their platforms use computer vision and AI to identify the image.

ASOS, a U.K. online fashion retailer, already uses visual search. Its search tool, Style Match, integrates into the ASOS mobile app, so customers can zoom in on a man’s suit in a magazine picture, for example, and receive suggestions on similar suits, McGuire explains.

McGuire calls visual search a tool that will enhance the customer experience, benefiting brands most in e-commerce, content marketing, product, and search marketing. Amazon also supports this media.

Recently, Mondo released a study showing that 21% of the 1,000 marketers surveyed cite visual search as an essential marketing strategy for their organizations through 2020. Visual search fell in line behind strategies such as experiential marketing, micro-moments, and motion design.

Gartner rated visual search as an “on the rise” strategy, along with over-the-top TV advertising, consent and preference management, and personification.  
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At the peak are advanced supply-side bidding, customer journey analytics, real-time marketing, conversational marketing, artificial intelligence for marketing, and customer data platforms.

The acquisition, though small, is the latest in Microsoft’s attempts to level up with Amazon. Over the last few years, the company has garnered individual partnerships with retailers, which has laid the groundwork for marketers to see it as a potential alternative to the Jeff Bezos behemoth. Still, Microsoft has a long way to go: Amazon has a substantial leg up on both advertising (which brought in $3 billion this past quarter) and cloud storage (which hit $8.38 billion in Q2 of this year). Adding PromoteHQ – which has clients that include Overstock.com, Office Depot, and Kohl’s – indicates that Microsoft is strategizing about how to expand and undercut the competition quietly.

Until now, Microsoft has had to face Google as its primary advertising competitor. The acquisition hints at Microsoft’s ambition to go beyond search. Bloomberg estimated search would bring in about $7.9 billion in annual revenue for the fiscal year 2019, a drop in the bucket compared to Google’s $120 billion in annual ad sales. Earlier this year, Microsoft announced it was changing its ads name from Bing Ads to Microsoft Ads, which also implied that it had grander horizons beyond mere web search, which Google will almost certainly always dominate. Indeed, the PromoteHQ purchase is a way for Microsoft to go beyond search in its quest to court retailers – effectively providing a platform so that brands with e-commerce sites can run ads on their own storefronts.

Microsoft over the last few years has become a quietly growing alternative to the ever-growing Amazon behemoth, something that retailers squeamish to do business with Amazon would welcome. Even though Amazon Web Services has about one-third of the cloud market share, retailers have been inking long-term contracts with competitors like Microsoft to try to chip away at the e-commerce giant’s bottom line. Kroger, for example, has signed significant agreements with both Microsoft Azure and Google Cloud. With that, the grocery chain announced that it was working with Microsoft to build out in-store technology – including a connected store experience and digital shelving that would serve shoppers personalized ads. Walmart too has reportedly told vendors it wants them to stop using AWS.

There are other examples too. Walgreens also signed a long-term deal with Microsoft, as have Walmart and Gap.

“What Microsoft has done well over the last three to five years,” said Ray Wang, principal analyst at Constellation Research, “is [work] with retailers.” But what it’s been very weak on, he said, is advertising. These incremental moves over the last few months – the Microsoft Ads rebrand, as well as acquisitions like PromoteHQ – are setting the groundwork to work with retailers on multiple fronts, including advertising. “Every retailer feels they have a gun to their head from Google, Amazon, and Facebook,” Wang said. “There’s a unique opportunity for Microsoft to be in this space.” Of course, other software giants working with large companies are likely trying to follow suit, such as Salesforce, Adobe, and Oracle,” Wang added.

All of these announcements are piecemeal, but they do add up to a more significant strategy. Retailers want to rely as little on Amazon as possible while growing their e-commerce businesses, and Microsoft has laid the groundwork to offer solutions that are direct alternatives. Meanwhile, as Microsoft continues to make individual long-term deals with big retail companies, it puts it in the position to have future clients as it increases its advertising and software offerings.
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For retailers, forgoing Amazon could become an almost moral imperative. By doing business with them, said Wang, “you’re giving [Amazon] the ability to crush you.” Thus, if Microsoft were to continue to play to these fears – and focus on more retail-adjacent products like PromoteHQ – its business stands to grow even more.

Nobody likes to pay sales tax and until recently, most of us shopped online to avoid our local sales tax.
Nearly one year ago, the Supreme Court ruled that out-of-state retailers must collect sales tax on internet sales. 

One retailer many of us use for those “have to have” gadgets is B&H Photo Videoin New York City. This past week they announced a new credit card called Payboo. This is a traditional credit card that has one extra feature: when you buy anything from B&H and use the Payboo card, they will instantly refund you the sales tax before you finish the purchase. And at B&H, instant means instant – no expiring points, credits, or coupons to worry about. This new Payboo card provides an additional discount equal to your sales tax rate, and B&H will still collect and remit state sales tax in accordance with state sales tax laws and regulations.

​While none of us needs another credit card, this may be worth it.

People who buy refurbished phones and laptops choose these products for two reasons. They want to add something to their vintage collection, or they merely want more by paying less. A large number of people fall into the second category where the aim is to get more features, better hardware at a low price. Whether it’s a bike, car or an electronic device, when it comes to buying repaired or used items online, the first question that comes to mind is “Should I buy a refurbished product or settle down for fewer features with a brand new product?” Here’s a guide to help you go through this process.

What is refurbishment? It is a process of distribution of electronic items which were returned to a vendor or the manufacturer. Remember that the reason behind such returns can be anything from faulty hardware components to a damaged body part or the user not willing to keep the phone. 

First things first.No matter how inexpensive the deal is, always check who refurbished the product. In some cases, manufacturers sell refurbished products and refurbishment is done by the manufacturer only. In other cases, vendors who sell in a marketplace also get phones repaired from a third-party supplier. Make sure that you ask about which company has restored the device and make sure you’ve checked that company’s track record.

Warranty. Check the warranty that’s offered on the repaired item. If there’s no warranty available for the product, you should prepare yourself to see the product die soon after its arrival. This is one of the biggest mistakes people make with refurbished phones.

Almost every brand new smartphone and laptop comes with a year-long warranty, but with refurbished products, the warranty can be somewhere between zero to six months. Check if the product you like has at least 3 to 6 months warranty because buying a refurbished smartphone or laptop with one week or 10-day warranty is like inviting trouble.

When to buy & when not to buy. You should look for the existence of the product in the market. Let’s say you are getting a good deal on a laptop and the seller is giving you a warranty of three months. It can be a good deal only if the manufacturer is still making the product and the components are likely to be available in the market for a long time. Don’t buy anything that is out of production, especially electronic items.
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Many companies sell refurbished phones and laptops directly as a way to clear their inventory and make some money on the old stuff. Before buying anything, check the seller’s track record and make sure that you’re buying from a reliable company who takes responsibility for sale transactions.