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Operating an electric scooter-sharing service is expensive and hard. The scooters break down, or they get vandalized or impounded by local law enforcement. Scaling that business globally, like Bird and Lime are trying to do, is even harder. Every scooter company today is operating at a loss, but Bird in particular has an interesting plan to spread the gospel of the scooter without going completely bankrupt.
It involves selling e-scooters to local entrepreneurs, providing them with advice and technical support to get started, letting them incur all the costs associated with maintenance and operations, and then taking a small percentage of each scooter trip. It’s called “Bird Platform,” which the company originally unveiled last November.
But what the Santa Monica-based startup didn’t say at the time was that Bird Platform would be targeted at aspiring scooter entrepreneurs who live in countries outside the US and Europe, where Bird operates its own branded scooter-sharing service. In this way Bird can inspire the creation of new scooter companies that won’t directly compete with its own service, as well as orchestrate the spread of e-scooters in cities around the world, without losing more money than it already is.
“It came out of a brainstorm around how do we take the mission to the world,” Bird CEO Travis VanderZanden told The Verge. “And so, we’re excited about that. We’re also excited because it… allows us to grow faster.”
Photo by Justin Sullivan/Getty Images
Bird is planning to rollout Bird Platform in three initial markets: New Zealand, Canada, and Latin America. Local entrepreneurs can buy Bird’s e-scooters at cost, as well as access the company’s tools, products, and technology needed to manage a fleet of shared e-scooters. Bird will even fly in its own operations experts to help launch the business. And in exchange, the company will take 20 percent of each trip fare. Bird typically charges $1 to unlock a scooter, and then 15 cents per minute of riding. The average trip generates around $3.75 in revenue for the company — though assumedly Bird Platform users would set their own prices.
The scooters, which are manufactured by Bird’s partners in China, will come preinstalled with all the firmware and GPS technology, called the “Bird Brain,” that allows them to be deployed as part of a shared fleet. “It’s capital intensive,” VanderZanden said. “What we’ve really tried to do is keep the upfront costs as low as possible.”
It’s an interesting move by Bird, especially considering how wildly unsustainable the scooter-sharing business is turning out to be. Recently, Quartz’s Alison Griswold crunched the numbers from Louisville, Kentucky, and found that the median scooter took 70 trips over 85 miles, and had a lifespan of 23 days. Lifespan is a big deal for scooter companies: the longer the scooters can stay in operation, the more money they can make for the company. And right now, these scooters aren’t living long enough to earn a profit.
VanderZanden has been staving off the winter doldrums (colder weather, fewer scooter trips) by mulling over the unit economics conundrum. Most of the solution rests in the company’s ability to roll out its new, longer-lasting, more rugged scooter, the Bird Zero. He wouldn’t say what percentage of Bird’s fleet is now comprised of the more rugged scooter. But he did say that in order for Bird to eventually break even, the scooters will need to increase their lifespan to six months.
“We’ve been hard at work on future hardware as well, with even bigger batteries and more ruggedized [scooters], which will circle back on at some point in the future,” he said. “We’re looking at every technology you could imagine. If it makes sense from an economic standpoint, and ideally improves the rider experience, then it’s a no-brainer.”
When it comes to retail, the only constant is change. Today news broke that Starbucks will be trying delivery to customers, as the in-store experience has lost some traffic. As you will find out below, not everything that Starbucks touches turns to gold, such as Teavana. Those who compete on customer experience today are doing so by competing on logistics. A digital transformation that includes logistics and supply chain prove to be the power of companies that remain relevant to customers. Target is an example of a company that struggled to get a hold on the digital aspect of its business, and outsourced its digital side and website to Amazon from 2003 – 2011. They saw digital as ancillary but eventually woke up. They focused on supply chain combining digital and in-store inventories enabling them to get customer’s their orders faster. Target became a company that used technology to improve its supply chain and offer curbside pick-up for customers. Not to mention the success of its many Target-only brands. Target has triumphed seeing a twenty nine percent growth in online sales in 2018 and a growth in retail sales as well (almost six percent). But for those who refuse to go through a digital transformation fast enough, the risk is real.
In 2018 when some iconic retailers shuttered their doors by either completely going out of business or closing a portion of their stores. Retail is incredibly competitive, and specialty stores or brands that can’t innovate and compete often fall by the wayside. Thanks to Amazon and an explosion of direct to consumer companies like Casper, Dollar Shave Club and Away, more big box retailers are closing their doors.
Here are the top 9 biggest retail closures of 2018:
1.Toys R Us
Iconic toy store Toys R Us closed the doors of all of its 735 stores in June after months of liquidation sales. It marked the end of an era for brick-and-mortar shopping in standalone toy stores. Even with a loyal customer base and strong rewards program, Toys R Us had problems keeping up with online toy retailers and big box stores.
2. Sears Holdings
Sears has been battling to survive since it filed for bankruptcy in October. As a result, the company is restructuring and focusing on a smaller core of profitable stores. Sears Holdings announced in late 2018 that it will close more than 140 Sears and Kmart stores. Sears used to be a prominent retail store, but both Sears and Kmart have faced difficulties in recent years with increased competition and the growth of e-commerce. When given the choice to shop more modern brands online or go to an older Kmart store, customers are choosing the former.
Home improvement store Lowe’s closed 51 stores across the U.S. and Canada. Nearly half of the under-performing stores are within 10 miles of another Lowe’s store, which has allowed employees to transfer to new locations. Closing less profitable stores will allow the company to focus on stores with big earnings.
4. Mattress Firm
Also on the list of retailers that filed for Chapter 11 bankruptcy is Mattress Firm. As a result, the company closed 700 of its more than 3,300 stores. Stores closed quickly after the announcement, some within a few days and others within a few weeks. Most of the stores that closed were in markets that already had numerous other Mattress Firm locations. In recent years, many customers have moved to ordering mattresses online.
Mall and airport staple Brookstone filed for bankruptcy in August after a long period of slumping sales. Brookstone closed or is in the process of closing all 102 of its mall stores. However, it is adding 35 new stores in airports to help meet revenue goals. Airport stores tend to be smaller but gain lots of traffic from tired travelers wanting to test the famous massage chairs. Brookstone’s mall locations simply couldn’t compete with online retailers, and most consumers found it easier and more enjoyable to find their quirky gadgets online.
Vitamin store GNC closed 200 stores across the U.S. and Canada after slumping sales. The company said it was trying to renegotiate leases to lower the number of stores it closed, but that didn’t turn out. There are still more than 9,000 GNC stores around the world, but more locations could close if the company can’t turn things around. With its specialty products, GNC is in competition with other vitamin retailers and online stores.
7. Foot Locker
A fixture of many malls, Foot Locker closed 110 stores in 2018, mostly in malls that the company said were “starting to deteriorate.” As it closed underperforming stores, Foot Locker starting putting a bigger emphasis online. However, brick and mortar isn’t completely dead for Foot Locker: it also opened 40 new stores in 2018, including a Champs Sports flagship store in Times Square.
Starbucks shut the door on its retail tea chain, Teavana. Most of the stores hadn’t been performing well, and Starbucks wanted to move the company in a different direction. In recent years Starbucks tried to spice things up with improved store designs and creative packaging, but it wasn’t enough. All 379 Teavana stores closed in 2018.
Home to tween girl accessories, Claire’s filed for Chapter 11 bankruptcy in March 2018 and announced it was closing more than 90 stores. It’s the perfect storm for Claire’s: aging customers, dying malls with slowing foot traffic and a move to online shopping. The store has also faced more competition from big box chains like Target and Walmart.
Nothing in retail is ever certain, especially as e-commerce continues to boom. Stores need to find ways to adapt or they might follow in the doomed footsteps of these retail stores.
Blake Morgan is a keynote speaker, futurist and author of “More Is More.” Sign up for her weekly customer experience newsletter here.
Note: The following link is not part of this article from Blake Morgan, but provides further details on additional bankruptcies experienced from 2015 through early 2019. It is quite extensive, but a very good review (Infographic with commentary) of the “Retail Apocalypse” and the impact of big-box retailers falling behind the technology curve and not shifting to e-commerce and establishing an online presence early enough: Here’s A List Of 68 Bankruptcies In The Retail Apocalypse And Why They Failed from CBInsights (March 12, 2019).
Gartner Surveys 600 Marketing Champions Across the US and the UK to Uncover Industry Trends for Enterprises to Prioritize Their Budgets and Allocate Funding
Innovation emerges as the loudest thought in a CMO’s cognizance! About 16 percent of Chief Marketing Officers have confirmed that they spent the maximum on innovation in 2018 — two-thirds confirmed that spending on innovation will grow next year. The irony here is that marketing leaders admitted they are not very confident about how to innovate or exactly where to spend — although beaming of huge ambition about being innovative.
MarTech Series runs down Gartner’s findings and talks about eight trends for 2019 and beyond where marketing leaders are most likely to spend.
1. Digital Marketing
The winds of change have begun to flow! Businesses are going digital by the hordes and the pursuit to make businesses successful on digital mediums has now gotten the eyeballs of the entire C-suite. 57 percent of marketing leaders are confirming now that they would be inclined to spend on digital marketing endeavors.
“I actually think marketers are going to have to spend on technology to help with the first two bullets (better targeting and better measuring progress). Most activity-oriented systems today don’t help with where we point the resources and how we measure success.
As far as my team goes — tech aside from Terminus tech (which we are using for segment identification and measurement) — we are excited about Vidyard because it helps us focus on creating great connections with key accounts and stakeholders.”
However, CMOs need to work in conjunction with CFOs. Convincing financial officers to invest for methodologies not yet in the limelight can be extremely hard for the CMO. More so, even if they agree, the CMO is accountable for ROMI.
Marketing Technology is on the radar of CMOs for investment. MarTech spend has increased when compared to the percentage spend last year (29% in 2018 as against 22% in 2017). Evidently then, MarTech is the crux of CMO spend because it serves as the paramount source of marketing resources and initiatives.
As per Gartner’s survey, CMOs will be spending the most on the below mentioned ‘big three’ technologies:
Email Marketing platforms
Web Content Management
Digital Marketing Analytics platforms
Although, Ewan McIntyre, who is the lead author of the report, asks CMOs to practice caution. MarTech is extremely effective but can be costly. Marketing leaders need to think this through in order to avoid financial disasters.
The survey reflects the CMO’s annual spend for 2018 was capped at 21 percent for advertising. This is for both offline and online (digital) models of advertising. However, as per the first trend of this report, CMOs now prefer to spend a lot more (two-thirds out of the 21 percent budget) on digital advertising. Paid advertising on digital channels such as search engines, social mediums, et al. are the focus areas of digital advertisement spending.
“Well, ABM is still super-hot, so I see people continuing to spend on various ABM tactics. At our recent client summit, everyone was buzzing around how to use data in the best ways, so data sources and solutions should be in most marketers’ budgets.
Personally, I’m looking at AI tools such as Drift and Conversica so that I can do more with less (because we all have to do more with less, right?). These tools help us drive contacts to a more “ready” state before we have to get a more expensive human being involved.”
GDPR and the current atmosphere of user privacy and data security is the worst nightmare for owners of digital mediums. Even when red flags are being raised for brands as huge as Facebook, marketing leaders choose to continue ingesting a substantial chunk of dollars for paid advertising. Main reasons? Increasing revenues and proving to stakeholders that marketing is a critical cog to aid the enterprise’s engine to run smoothly. Other reasons are bolstering brand value gaining new business.
Tech watchers are going gaga over emerging technologies such as ABM, AI, ML, Programmatic and Native among many others. Even then, CMOs spend a whopping 25% on workhorse technologies such as email, organic search, paid search, etc. So why do marketing leaders continue to invest in these technologies that belong to a prior phase of MarTech evolution? Here are the reasons:
These channels are easy to measure for ROI
Easier to groom in-house talent to operate workhorse technologies
Easier to prove the effectiveness of these channels to stakeholders compared to newer, impactful but complex technologies
Workhorse technologies still work, and really well!
Innovation is a major focus area for the CMO. According to 9 percent of the CMOs surveyed, innovation will be vital in enterprise growth over the coming 18 months. And they are right — the business eco-system overall is flux. Disruptions, changing consumer behaviors, M&As, and so many other factors are ensuring that it is difficult for enterprises to run their business. Hence, innovation automatically becomes the fallback element of every enterprise.
“Modern marketing is increasingly centered on data science, and if we accept that premise, CMOs will spend big on AI. The underlying neural networks are services now. It is the training model and ability to ingest massive amounts of data, which is generated by your systems but increasingly purchased from other vendors, that is the critical element in these initiatives. I am in a B2B market, so what I’m looking at are technologies that give me deep perspective on funnel and pipeline. I want to be able to look at my demand gen activities holistically but then down to increasing granular cohorts that I can gauge for the probability to close, or not.
This is important for me because this will give me insight into where I should be focused, which then guides strategy and tactics. Where existing analytics solutions come up short is that they start with a premise of “this is good, do more of it,” which leads to unnatural bias that gets increasingly narrow in scope, and then misses the opportunities that emerge that are outside of the static scoring models. Basically, I need a really intelligent system that is capable of generating human insights on data across a portfolio of groupings and metrics.”
Marketers nowadays employ a hybrid marketing strategy for their campaigns. Here the hybrid model will mean sticking to the core marketing tactics and methods while embracing and applying newer technologies. But as discussed before, Chief Marketing Officers’ abilities do not really match up to their ability to innovate. The survey is indicative though marketers want to change and be more matured and absorb innovation.
6. Customer Experience
The start-up culture is going full throttle. Newer companies that offer innovative, cutting-edge and problem-solving technical capabilities are being founded in multitudes. This has given rise to stringent competition and made it harder for businesses to better serve their existing customers and gain newer ones. From a customer standpoint, their expectation from a brand about how they want to be treated has skyrocketed.
Spending on Customer Experience (CX) has been picking up speed from the past several years. According to the survey concluded, it will see a good amount of CMO spend over the coming one and a half years. CMOs that were a part of the survey have declared that they will be spending 18% of their budget on Customer Experience.
Personalization is an extension of existing enterprise efforts towards providing a maximum positive customer experience. CMOs are spending an average of 14.2 % of their budgets on personalization efforts. The interesting element here is that double-digit spends are common across industries. The spending is critically invested in gaining deeper insights into the accumulated customer data.
“I think brand CMOs will continue to increase their spend on the media that actually works. These days, mobile is no longer a place to test; it’s where a brand has to be because consumers have their devices with them all day long. Eyeballs are always on mobile.
So, smart CMOs will look for tech that helps them optimize and maximize the impact of mobile dollars so they reach people when they are most receptive to marketing messages. AI developments will help there. And, of course, video can make mobile creative even more impactful. OTT is another area that I see spend increasing with better and better content coming through and more eyeballs heading that way.”
Considering GDPR, marketers need to be careful about not pushing too much in their efforts to obtain data. This might just completely drive away consumers. Marketers may have dollars and data but there is an atmosphere of uncertainty pertaining, where marketers must tread cautiously. Marketing leaders need to develop fool-proof strategies taking into account the current market and consumer complexities.
Clearly, 2019 seems to be the year for innovation and customer experience with statistics pointing at a maximum spending in these spheres. The survey also speaks of changing patterns of marketers towards their perspective on the whole marketing operations stream. Typically, to gauge marketing performance, businesses have a fixed set of KPIs that are crafted around ROI and customer satisfaction. However, marketers are adamant that they would want to design their campaigning around brand awareness.
“I think they’ll spend on technology. But I wish they’d spend on headcount and training. Marketing teams, regardless of size, are missing core and important skill sets. We have not educated marketers well at the collegiate level in a decade. The pace of change in marketing is too fast to go to a conference or webinar here or there and maintain the ability to be “good” at your job.
Technologies I’m looking at… I’m obsessed with B2B data right now, or the lack of great data. I want someone to fix the buyer insights data problem for me.”