News

8 Apr, 2020
What work from home means for streaming, gaming
Financial Review

Lower quality video streams and delayed gaming downloads will be crucial to keeping the internet functioning optimally while the world stays home during the coronavirus pandemic, according to the head of one of the world's largest content delivery networks.

Akamai, which is responsible for delivering more than 30 per cent of the world's digital content – be it a TV stream from Stan or a video game from Sony – has recorded a more than 50 per cent jump in traffic volumes globally compared to this time last year.

Tom Leighton, who leads the $25 billion content delivery and cyber security services player, told The Australian Financial Review some areas of the world, especially Europe, were struggling to cope with the increase in internet traffic since the pandemic took hold.

He predicted that usage would continue to increase the longer people were forced to stay home and believed that telcos had made the right decision in asking Netflix to reduce streaming quality.

"There's been roughly a year's worth of growth in the internet usage overnight," Dr Leighton said.

8 Apr, 2020
Virtual pubs, Zoom yoga and lunch money: How companies like Canva and TransferWise are engaging staff working from home
Business Insider Australia

Many companies are making their employees work from home to prevent the spread of COVID-19 with some dishing out the perks to make it an easy transition.

Canva, Culture Amp, SAP and SafetyCulture are just a handful of the many tech companies that have got their employees working remotely amid the coronavirus pandemic.

We spoke to these companies to find out what they have been doing to keep staff connected and motivated during this period.

Canva

Canva not only managed to get its more than 800-strong workforce working remotely in less than 24 hours but also managed to implement a range of initiatives to keep its workers productive while at home.

The company offers staff a daily stipend for lunch to support small businesses in their community, holds virtual company-wide Netflix nights and hosts Friday night musical acts via Zoom to support local artists who can’t get gigs.

Oh and there’s more. Canva has moved all of its clubs online including its meditation, wine and pasta clubs. It has an internal website filled with daily updates, work from home tips and Slack channels with food challenges and podcast suggestions.

The company’s resident chefs have even developed weekly menus, shopping lists and how-to videos with cheap and easy recipes employees can follow. Meanwhile, Canva’s resident health and wellbeing coach delivers fitness sessions via Zoom.

Canva co-founder Melanie Perkins told Business Insider Australia via email the company has emphasised a culture employees love working in since it launched.

“This same ethos has continued as we’ve moved our entire team to remote working,” she said. “Early on, we decided our guiding principles are to ensure our team’s safety and well-being, to support our community, and to rally together and grow. These principles have guided all of our decisions during recent weeks, and make sure we all move in the same direction.”

Perkins added that most of Canva’s work is already being done online, making its transition to remote working “relatively smooth”.

“We’ve concentrated extra effort on connecting team members across the business,” she said. “We’ve increased proactive communication and context sharing, with weekly company-wide meetings and a host of new initiatives. It’s been critical that we continue the same special traditions as we have moved online, to help our team stay connected, to continue striving to do the best work of their lives, and to create a product that serves our community.”

And for companies that may be employing work from home arrangements for the first time, Perkins emphasised social connection. “The whole world is in the same boat right now, while everyone has to be physically distanced, it’s important we keep our social connection,” she said. “We’ve implored our whole team to have compassionate leadership – to be compassionate with their teams, compassionate with their communities and compassionate with themselves.”

Culture Amp

Australian employee engagement platform Culture Amp told Business Insider Australia its full workforce of more than 440 employees – across offices in Melbourne, San Francisco, New York and London – has been working from home for more than three weeks.

“Our first priority was (and still is) employee health and productivity, and then also how we can help all our people support the communities they live within as well,” Culture Amp CEO Didier Elzinga said. “We were fortunate that being a global technology company we were already fairly well set up to work remotely.”

Elzinga explained the measures the company has taken to keep its staff engaged and motivated while working from home. It introduced a digital ‘aperitivo’ – a 10-minute drink with colleagues at the end of the day – and ‘hours of power’ where everyone joins a call not to meet but to work on their own with colleagues working in the background. That’s not to mention opportunities to have morning or afternoon tea via video conferencing so workers can chat like they would in the office and adding more time to meetings to see how everyone is doing.

“Simply adding 10 mins to the start of a virtual meeting to check-in is really impactful for individuals craving connection,” Elzinga said. “This is a simple yet effective practice that is helping our team to stay engaged and supported.”

Elzinga shared his tips for making the most of work from home arrangements, highlighting how important it is to communicate with workers.

“It is extremely important to intentionally build upon your culture during these trying times,” he said. “Leaders cannot over-communicate. Be the voice of calm in a sea of uncertainty. Be human, share how you’re processing this experience, the questions you’re asking and how you are approaching the challenges.”

“Checking in with your team is also critical. Maintaining regular feedback to understand whether people feel supported if they have the right information and what they need to do their job.”

TransferWise

All of TransferWise’s offices around the world have transitioned to working remotely. To keep its staff connected and engaged, the company has several activities available via Zoom including yoga classes, a book club, meditation and a mobility training session that has tips on how workers can stretch while at their desks. Not to mention a dedicated slack channel where creative workers can showcase their artwork.

Plus, the company has a virtual ‘Fika’ – a communal afternoon break for coffee & biscuits and chatting – as well as a virtual pub on Fridays for an end of the week catch up.

“This is clearly a very unsettling and challenging time and we felt it was more important than ever to come up with creative ways our team, who we call Wisers, can stay connected, feel supported and also to keep them smiling, since we implemented a global work from home policy on March 16th 2020,” TransferWise global head of people operations Rose Stott told Business Insider Australia.

“We’re fortunate as a company that we already had a culture of working from home but adapting to that full time is a shift for many, especially the social aspect of work.”

To make sure its team is comfortably set up to work from home for a long period of time, TransferWise has given everyone a set budget to put towards setting up their own workspace at home. It also recommends workers use the mental health platform Modern Health which offers free online webinars for people to ask questions about how to manage stress, isolation and loneliness. Every worker also gets access to the company’s employee assistance programme, where they can discuss any issues they’re having with a counsellor.

Employment Hero

Employment Hero CEO and co-founder Ben Thompson told Business Insider Australia that since the company has supported flexible working for a while, its transition to working from home has been “quite seamless”.

Each Wednesday Thompson films a short video sharing government updates and thanking the team for their hard work. He also shared the importance of having a routine when working from home.

“In the mornings, we have 8:30 AM ‘stand-ups’ with leaders and their teams to debrief, and then at 9 AM we do a leadership ‘stand-up’,” he said. “It’s a quick check-in, but this daily communication creates a steady cadence which is key to staying motivated and productive.”

To make life a little easier for employees to work from home, Employment Hero encourages communication via Slack and Zoom, with some meetings even having themes like ‘wear your favourite headwear’.

“We tend to forget how important ‘water-cooler’ chats are for morale. So we’ve organised virtual group Zoom calls most mornings and afternoons as an optional initiative for teams to get together and have a laugh,” Thompson said. “On top of this, we encourage our teams to take regular breaks, get outside for some fresh air and keep active.”

Thompson also shared his tips for companies newly transitioning to working from home: communicate with your team, focus on new ways to acknowledge the hard work of your team, encourage team members to set goals and check in on how your staff are feeling.

Clipchamp

Video creation platform Clipchamp has had its employees working remotely since March 16. Co-founder and CEO Alex Dreiling told Business Insider Australia workers were quick to sort out virtual solutions to rituals they had in the office. These included Slack channels dedicated to coffee corner chats, board games and virtual Friday afternoon drinks.

“Our own reliance on video communication is at an all-time high, as we transition to video conferencing and one-on-one video calls to replace in-person interaction,” Dreiling said. “In the transition to becoming 100% remote during this period, we are working to ensure that our company rituals continue without disruption.”

Clipchamp head of culture and talent Julia Poloai advised that while employees work from home, it’s important for business leaders to acknowledge everyone’s individual needs fairly. “When operating remote teams, leaders should take into consideration employees’ families, networks and connectivity, the ways individuals absorb information when digitally communicating, and the varied energy levels of staff at different times throughout any given day.”

Envato

Aussie digital assets platform Envato has been a big supporter of flexible working even before the coronavirus pandemic. It made the decision that its workforce work remotely from March 18.

“As a company that has had workplace flexibility in place since day one, we understand that working from home can be both a blessing and a curse, especially in our current working climate, where care responsibilities and isolation from family, friends and work colleagues put extra strain on our wellbeing and in turn, our productivity,” Michelle Ridsdale, chief people officer at Envato said.

In addition to Slack channels, Google hangouts and remote social events to encourage employees to gather together, Evanto has ramped up its leave arrangements.

It provides 10 days additional personal leave for staff who fall ill, are in isolation or are caring for someone sick or isolated. It is also offering up to 15 days ‘negative leave’ to be taken if a worker runs out of their existing leave entitlements but still needs to take on extra care responsibilities.

As for advice the company would give to businesses embarking on a work from home arrangement for the first time, Ridsdale said businesses should be clear in what it wants to achieve during this time, ensure workers can regularly connect and remove any barriers employees may be facing to achieve their work.

SafetyCulture

SafetyCulture has implemented several initiatives to keep its staff motivated while working from home, including virtual trivia, weekly team drinks, sending birthday cards for an employee’s birthday and launching virtual fitness sessions. It’s UK team also created a virtual pub.

“[The pub] has four rooms that you can enter to have a drink with colleagues – a karaoke tavern, a wine & cheese bistro, a jazz bar and a cocktail bar,” SafetyCulture COO Alistair Venn told Business Insider Australia. “They are themed accordingly and staff can enter and exit as they please to socialise and have a drink at home but feel like they are with their colleagues.”

SafetyCulture has an employee assistance program that provides counselling services and a wellness app that focuses on mental, physical, social and financial health. The company is also providing flexible working hours for parents working from home with children and allowing workers to expense office equipment they need.

SAP

All SAP employees in Australia and New Zealand are working from home, with its more than 100,000 strong global workforce working almost entirely remote as well. To maintain its culture during this time, an SAP ANZ spokesperson told Business Insider Australia via email the string of measures it has introduced.

“To help boost team spirit and maintain an element of normalcy, we’ve rolled out a range of fun initiatives, including weekly yoga sessions, twice-weekly virtual exercise bootcamps, a companywide ‘Quaran-tunes’ playlist, a ‘virtual happy hour’ every Friday, and a #LifeatSAP hashtag where staff can share social snaps of their home setups,” the spokesperson said.

On top of that, the company’s giving its more than 1,400 employees in Australia and New Zealand a $250 working-from-home grant to help improve their home office setup, as well as free flu shots, a $25 meal voucher in the absence of the company’s normal end-of-quarter celebratory lunches and a monthly, ‘Healthy Habits’ online program, which offers exercise and nutrition advice.

8 Apr, 2020
Zoom CEO: ‘I really messed up’ on privacy amid coronavirus crisis
The Australian

For many business leaders, the coronavirus pandemic has been a struggle to survive. For Eric Yuan, chief executive of Zoom, the challenge has been how to manage breakneck growth. And lately, it hasn’t been going well.

In the space of a month, the Silicon Valley videoconferencing business he founded nine years ago has gone from an enterprise-software provider little known outside the business world to a near-ubiquitous social lifeline for homebound Americans and, most recently, the subject of complaints about privacy problems and harassment on its platform.

The whiplash has left Mr Yuan trying to appease upset users and figure out what went wrong — and rethinking a company culture that for nearly a decade was focused on ease of use.

“If we mess up again, it’s done, I thought a lot last night,” he told The Wall Street Journal in an interview Friday, after what he said was a sleepless night.

Among the privacy features Mr Yuan now promises is an option for end-to-end encryption to safeguard conversations, he told the Journal. Zoom had previously advertised such a feature, but security experts discovered the underlying technology provided a lesser level of data protection. The full-encryption feature won’t be ready for a few months, Mr Yuan said.

He has faced adversity before. His first several applications to move to the US from his native China were rejected, before he was finally able to make the leap in 1997. He worked at a videoconferencing company that was acquired in 2007 by Cisco Systems Inc., leaving in 2011 to found San Jose, California-based Zoom. His priority, he says, was a frictionless user experience for business customers. But that left holes in security settings.

Use of Zoom exploded as the coronavirus pandemic has forced more people to stay home. Where once it enabled client conferences or training webinars, it is now also a venue for virtual cocktail hours, Zumba classes and children’s birthday parties. It became the most downloaded free app on Apple’s iOS App Store, leapfrogging bigger names like TikTok, DoorDash, and Disney+.

The number of daily meeting participants across Zoom’s paid and free services has gone from around 10 million at the end of last year to 200 million now, the company says. Most of those people are using its free service.

Zoom’s initial public offering just under a year ago was one of 2019’s most successful, making Mr Yuan a billionaire. While the stock market has taken historic tumbles over the past month, Zoom’s shares are up.

But the platform’s surging popularity has attracted trolls and hackers, as well as scrutiny from privacy advocates. The practice of “Zoombombing” — where people gain unauthorised access to a meeting and share hate-speech or pornographic images — entered the popular vernacular almost overnight. Security experts found publicly highlighted problems with Zoom’s technology could leave user data vulnerable to outsiders’ exploitation.

The Federal Bureau of Investigation issued a warning Monday about videoconference hijacking, spurred in part by Zoombombing incidents. In the U.S., 27 Attorney-General’s offices have raised questions about privacy issues, Zoom said, adding it is co-operating with authorities.

On April 1, Mr Yuan issued a lengthy blog post on Zoom’s website vowing to devote all his engineers to fixing trust, safety and privacy issues.

“I thought I was letting our users down,” he told the Journal on a video call, using a Zoom virtual background depicting the Golden Gate Bridge. He hasn’t had more than 4½ hours of sleep a night in the past month, he said. “I feel an obligation to win the users’ trust back.”

To some extent, Mr Yuan is paying the price for well-meaning decisions he made early during the coronavirus crisis. When it hit China late last year, he quickly moved to make Zoom more widely accessible for free so medical professionals and others could remain in touch. When financial analysts in early March asked him how Zoom would stand to benefit from its sudden popularity — then still mainly overseas — he said “support for each other is more important than revenue.”

Though he gives no hint of regretting that choice, Mr Yuan now says “sometimes you have a good intention, and sometimes you get punished,” adding “we need to slow down and think about privacy and security first. That’s our new culture.”

Security researchers also have scrutinised Zoom’s links to China. Researchers at the Citizen Lab, a security research group affiliated with the University of Toronto, on Friday said Zoom used an encryption technology that is considered substandard, and that in certain circumstances the company stored encryption keys — long strings of numbers and characters that can be used to access encoded communications — on servers based in China.

Brendan Ittelson, head of technical support at Zoom, said because of the distributed nature of the company’s infrastructure, meeting data can be routed through different data centres around the world. Zoom’s system first tries to send this data locally, but if the connections fail, the backup route might send it elsewhere.

The encryption set up could give sophisticated hackers — those working for a government, for example — a way of listening into Zoom conferences, said Bill Marczak, a research fellow at Citizen Lab.

“We’re not claiming that this is evidence that you should forever delete the app,” he said. “If you’re having a virtual hangout with our friends, you’re probably fine. If you’re discussing classified information, you should maybe think twice.”

Zoom had created a system to prevent this data from being sent through China when calls originate in the US. But when traffic surged starting in February, some data was mistakenly routed that way, the company said, adding that it has remedied the problem.

Critics also have questioned whether Zoom’s heavy reliance on China-based engineering could pose a security risk.

“Zoom’s operations in China were always a concern, but less of a priority when highly sensitive conversations about company or government secrets — or about people’s private medical health information — primarily took place offline in an office,” said Jacob Helberg, a senior adviser of Stanford University’s Cyber Policy Center and formerly a policy adviser at Google. “Now a significant portion of these conversations have moved to Zoom.”

Mr Yuan said the Chinese government has never asked for information on traffic from foreign users. Zoom was banned inside China for two months last year because it was a U.S.-based company that wasn’t formally registered in the country, Mr. Yuan said. Zoom formally registered within China last year and, Mr. Yuan, said authorities there care only about local meetings.

The backlash against Zoom hasn’t come just from security professions. Some corporate users have dropped the platform, including Elon Musk’s Tesla and Space Exploration Technologies, Mr Yuan said.

“I really messed up as CEO, and we need to win their trust back. This kind of thing shouldn’t have happened,” he said.

Tesla and SpaceX didn’t respond to requests for comment.

The barrage of criticism has left Mr Yuan feeling like someone has put his company in their crosshairs.

“Every day has felt like something is behind this trying to destroy us,” Mr. Yuan said. But he is too busy right now to spend time on such suspicions.

At this point, Zoom’s mass popularity is something Mr Yuan suggests he would rather not have had. “Hopefully we can go back to business customers after this,” he said. “But the good news — if we can learn the hard lessons and become better and stronger and we can win users back, in one or two or three years, it may have been worth it.”

He added: “But the journey is so painful.”

3 Apr, 2020
“We have to work a bit differently”: EBay launches stimulus for struggling retail
Inside Retail

Online marketplace eBay announced on Wednesday it is doing its part to support the flagging retail industry, unveiling a stimulus package to help businesses survive the COVID-19 crisis. 

As part of this package, eBay is allowing eligible eBay sellers to defer fees for 30 days, and removing listing fees until June 30.

For new sellers opening an eBay store the business is offering no selling fees for three months to help them establish their online presence while bricks-and-mortar locations may be in hibernation.

The idea, according to eBay Australia Tim MacKinnon, is to help primarily bricks-and-mortar retailers survive through online, and lower the barrier of entry for those just now making a transition online.

“[eBay] was created 25 years ago to enable strangers to do commerce without having contact with each other, MacKinnon told Inside Retail.

“We see ourselves as a fundamental piece of infrastructure… for businesses to be able to get through this process and still maintain cash flow.”

MacKinnon said he is devastated to see so many Australian retailers closing their physical stores, and after sitting with eBay’s senior leadership team and thinking through the next few months could play out, decided the marketplace had to support the industry.

“If [retailers are] successful, we are as well, and we see that we’ve got to make sure we help them get through this period,” MacKinnon said.

“I understand that retailers are just trying to take stock of what is happening, and the level of change right now is incredible. I wouldn’t try to tell others [how to react], but I would say that just as Australian retail got together to rally support for those affected by the bushfires, the only way we’re going to get through this is working together.

“And fundamentally we have to work a bit differently… I think i’m optimistic that when this is over, a lot of businesses will be in a much stronger position.”

Just like in several other areas of retail, eBay has seen the behaviour of its users changing over the last few weeks. Isolation categories – hand sanitiser, puzzles, toys, etc – have seen a massive spike in sales, while other areas of the site have fallen.

“The growth is strongest in what people need right now, and the more discretionary categories are not seeing as much growth. It’ll be interesting to see what will happen when offline retail is not available for those categories,” MacKinnon said.

“I think we’re still early in seeing these trends play out. I think everybody agrees there will be a change in consumer behaviour.”

1 Apr, 2020
Catch reports near 300 per cent increase on sales of household goods
Inside FMCG

With Australian supermarkets under pressure to maintain stock levels, and many consumers heeding government advice to stay home where possible, online retailers have witnessed a surge in sales in the last month.

In early March, Roy Morgan reported that online grocery sales increased by over 45 per cent in the prior weeks, putting logistical pressure on retailers’ delivery networks alongside increasing pressure to keep shelves filled as consumers continue to stockpile grocery and medical items.

Online retailer Catch.com.au has reported a major uplift in site activity in recent weeks as consumers gravitate online, with traffic to its grocery pages up 467 per cent YoY.

Household, pantry, health and baby products have proved the most popular, with the retailer working around the clock to maintain supply and meet demand.

Sales of household goods on the site soared by 290 per cent in the first two weeks of March, compared to the same period last year; pantry goods, such as pasta, noodles and rice, rose 234 per cent over this period, while health and beauty lifted 233 per cent.

The online retailer, which was purchased by Wesfarmers last year for $230 million, operates as an independent business unit under the leadership of Kmart Group managing director Ian Bailey.

Since the deal was completed, Catch has benefited from the support of Kmart Group’s scale and capabilities to drive growth. Now, the focus in on maintaining stock and a reliable delivery service throughout this busy period.

“Our number one priority during these uncertain times is our customers and making sure they have access to the products they need, when they need it. We will continue to bring our customers a convenient shopping experience from the comfort of their home across a huge range of products,” Nati Harpaz, managing director, Catch.com.au said.

As with Australia’s big supermarkets, the online retailer has been forced to implement limits on certain high-demand products such as wipes and soaps.

“By working with our partners to source extra stock and by imposing a limit on certain items, we aim to help those in need of products such as kitchen and pantry essentials,” Harpaz said.

31 Mar, 2020
https://www.theage.com.au/business/companies/store-closures-jobs-losses-retail-industry-braces-for-another-brutal-week-20200329-p54ezt.html?list_name=44_age_newsalert&promote_channel=edmail&utm_campaign=theage-am-newsletter&utm_content=TOP_STORIES&utm_med
SOURCE:
The Age
The Age

About 1700 staff employed by retail group Brand Collective – that manages labels including Shoes and Sox, Clarks and Mossimo – will be stood down at the end of the week as the government scrambles to assemble a wage-support package and the retail body predicts more store closures.

The head of the Australian Retailers Association supports the government's package but called for greater clarity on rent support, predicting more closures in clothing, footwear and accessory stores as businesses struggle with falling foot traffic resulting from stay-at-home advice designed to contain the spread of the coronavirus pandemic.

Russell Zimmerman, executive director of the ARA, said technology related outlets and book stores appeared safe, for now, as demand for products assisting in the transition to work-from-home arrangements was on the rise.

"Where it comes to people trying on clothing as a consumer, they might be very concerned about trying a jumper on that might have wiped across someone's face that might have had coronavirus," Mr Zimmerman said. "Immediately clothing and footwear comes to a standstill."

The three-pronged burden facing retailers – keeping staff safe, plummeting sales and brand damage for those stores that do remain open – meant it was becoming increasingly untenable to keep bricks-and-mortar stores operating, Mr Zimmerman said.

"Retail is staring down the barrel of sales that have gone down by approximately 75 per cent," Mr Zimmerman said, adding store owners were only making enough money to cover wages.

"How do you pay for your stock? For services? Your utilities bills? There is insufficient money going through to operate a business. If you continue to operate your business in this fashion, you will become technically bankrupt."

Mr Zimmerman said a lack of force majeure clauses that include pandemics meant business owners are still legally responsible for covering lease payments and, while the industry supports the federal government's work around wage support, it awaits further guidance on rents.

The private sector has stepped in to support with rents, with Australian banks now extending the six-month deferral of loans to businesses with up to $10 million in debt, including commercial landlords, on the condition tenants affected by the pandemic are not evicted for failing to pay rent.

However, others in the industry, including Brand Collective chief executive Martin Matthews, are calling for mandated rent-free periods or rent subsidies for business owners until the major disruption ends.

Brand Collective revealed it would temporarily stand down the majority of its workforce from next week as the business told its landlord it could no longer afford to pay rent.

"There is a high degree of uncertainty about our legal obligations during this period and we are hoping to work constructively with landlords to manage this – shopping centres can’t survive if retailers don’t survive," Mr Matthews said. "Clear government guidance on how landlords should approach rent holidays during this period is required."

The kitchen and laundry appliances chain best known for its Appliances Online blimp that flies over Sydney also announced this weekend it would shutter a string of stores in an effort to adhere to occupational health and safety standards and assist in curbing the spread of the coronavirus.

Winning Group, the parent company of Appliances Online, will close 22 bricks-and-mortar facilities starting Monday but said it would continue its online operations and committed to retaining its staff with full salaries.

Chief executive John Winning said it was a "proactive" step to close the stores "in a commitment to the safety and health of our team and our customers".

These closures come as troubled department store Myer joined swathes of other Australian shopkeepers that have temporarily halted trading. The 120-year-old company said it would shut 60 stores from Sunday for at least a month.

While there had been speculation Myer might open "dark stores" – using store fronts to operate click and collect-like operations – for now, the retail giant is pushing customers to shop online.

 

27 Mar, 2020
Coronavirus: Government orders 10,000 ventilators from Dyson
SOURCE:
BBC News
BBC News

The government has ordered 10,000 ventilators from Dyson to help deal with the coronavirus crisis.

The firm, headed by British inventor Sir James Dyson, said it had designed a new type of ventilator in response to a call on behalf of the NHS.

The order is still subject to the devices passing stringent medical tests but that is expected to happen quickly.

Dyson has had hundreds of engineers working round the clock to design the ventilators from scratch.

Blitz spirit

It hopes to build the ventilators at scale from its UK base in Wiltshire - using aircraft hangars that were used to stuff parachutes in the World War Two.

However, the blitz spirit the company is keen to channel will not produce immediate results.

It is thought that even if regulatory approval is forthcoming, it could take a couple of weeks to move from prototype to the device being made in significant scale.

In the meantime, the government has told the BBC that is "picking the low-hanging fruit" by buying as many existing models as it can.

Currently, the NHS has just over 8,000 ventilators, the government thinks it can procure a further 8,000 from existing domestic and international suppliers.

It estimates that the NHS will need at least 30,000 to deal with the potential flood of virus victims.

However, NHS Providers chief executive Chris Hopson told the BBC's Today programme: "We need to remember that this is a marathon, not a sprint.

"When it comes to miles eight to 10, those ventilators that are currently being procured and ordered from around the world will be very helpful, although the lack of ventilation available right now is a real issue."

By way of comparison, the state of New York has targeted the same number of 30,000 required ventilators, even though it has a population one third the size of the UK's.

Not the only game in town

The race has been on for weeks to produce tens of thousands of ventilators to keep people with Coronavirus-related breathing difficulties alive.

In one corner is vacuum and hairdryer maker, Dyson.

It's working with The Technology Partnership, a medical company based in Cambridge - but it's not the only game in town.

In the other corner - a consortium of manufacturing companies including Airbus and GKN, which makes parts for cars and planes.

The approaches of these two groups are very different.

Dyson insiders have told the BBC they have a working prototype, designed and built from scratch, which has been tested on humans and is "ready to go".

The consortium of medical, military and civil engineering companies - which includes Airbus, Meggit, GKN and others - is working to ramp up the production of an existing design.

Meanwhile, the German engineering firm Bosch has said it would develop an automated test for Covid-19 that can give results in less than two and a half hours.

It says that it intends to roll the new test out in April in Germany, with other countries following later.

Usually, these processes would take months or even years.

It is a measure of the current emergency that the decision making process has been reduced to days.

20 Mar, 2020
Aussie retailers are beefing up their delivery networks, as coronavirus pushes shoppers online
Business Insider

Australia’s national postal service and major retailers are putting new measures in place to deal with the coronavirus pandemic, as more and more housebound Australians turn to online shopping.

A spokesperson for Australia Post said the company was confident it would be able to keep up with any spike in delivery demand, noting there was “plenty of capacity in the network”. The government-owned company pointed to the Christmas period, when it experienced its busiest month in history, with 40 million parcels delivered in December, as an example of its capability.

However, the business is putting in place other measures to make online shopping safer and easier for Australians staying indoors. Parcels will no longer require a signature for delivery or collection, with drivers or post office staff instead able to sign on a customer’s behalf and leave it at the door.

Major supermarkets Coles and Woolworths have both reined in their online delivery and click-and-collect options for groceries, with Coles suspending the service nationally and Woolworths suspending delivery in Victoria.

Both companies said last week they had seen an unprecedented and significant increase in online orders as increasing numbers of Australians work from home and self-isolate due to the virus.

To combat this, the two are currently hiring additional fulfilment workers to boost online delivery capabilities, and Coles has put the call out for another 60 delivery drivers. Woolworths, which uses third-party delivery partners, said it was “working closely” with them to increase the number of drivers in its network.

Last week, it also took the unusual step of recruiting around 20 head office staff to help stack shelves and pack orders in its online distribution centres.

Outside of groceries, analysts have predicted a bump in online sales across the broader retail sector.

Online electronics and home goods retailer Kogan recently warned customers it was experiencing a high volume of orders across Australia and New Zealand, saying delivery times could be affected.

A spokesperson for the e-tailer said its most popular products in recent times included smart TVs with inbuilt streaming, freezers, computer monitors, standing desks, laptops and home office furniture, as working Australians kit out their home workstations.

EBay Australia managing director Tim MacKinnon said he expected to see an increase in shoppers coming to purchase from eBay, and that the retailer had already seen a run on items such as health products, video games, books and cleaning products.

“We expect, as retailers see offline traffic decrease, even more will set up a channel through eBay,” he said.

“We also think we’ll see more Australians use eBay to sell from home as you can list and ship items without having to have contact with the buyer. People may start eBay businesses as a way of generating income.”

Australia Post said it was currently seeing international delivery delays due to the coronavirus, but was “working with partner airlines and other postal operators to move items as quickly as possible”.

While online demand in the current and coming weeks may hit unprecedented levels, analysts are predicting enthusiasm for online grocery delivery will persist after the virus is contained, with Morgan Stanley saying it could lead to a fundamental shift in behaviour.

“We see this global surge in online grocery adoption changing consumer behaviour as the extent to which people realise the ease/convenience of shopping for groceries/consumables online over the next few weeks/month should lead to more long term online grocery purchasing,” it said.

20 Mar, 2020
Afterpay and rivals crash over Millennial armageddon fears
SOURCE:
The Age
The Age

Millennial juggernaut Afterpay has come crashing down to earth, with more than $11 billion wiped off its market value in less than a month amid rising concerns the buy-now-pay-later operator's customers could struggle financially as the economy falters.

Afterpay's shares plunged more than 35 per cent on Wednesday alone to a low of $11.92 amid growing signs that the world is facing a prolonged downturn triggered by the coronavirus pandemic.

This includes a warning from ratings agency S&P of a global recession and the possibility that Australian unemployment could hit its highest point since the 1990s as industries such as airlines, retail and hospitality are hit by the virus.

"The falls for buy-now-pay-later versus traditional financials have likely been steeper as reduced consumer demand and higher unemployment would likely be focused in younger Millennials who make up a disproportionate share of the retail workforce and buy-now-pay-later users," said Andrew Mitchell, senior portfolio manager with Afterpay investor Ophir Asset Management.

"Financials in general have fallen significantly over this time on the triple whammy of potentially reduced availability of funding, higher funding costs and a likely bad debt cycle brought on by reduced consumer demand and higher unemployment as social containment measures bite," he said.

Both Afterpay and Zip attempted to soothe market concerns last Friday about the pandemic potentially triggering a wave of defaults from their younger shoppers and also harming the extensive debt funding needed to support their consumer finance business models.

"We are well prepared to respond to any changes in customer repayment behaviour, however, we have not seen any changes relative to past performance," said Afterpay in a statement on Friday which was provided in response to "market enquiries".

Afterpay was not the only buy now pay later provider caught in the downdraft.

Zip Co and Flexigroup - which also have more traditional consumer credit businesses to rely on - dropped as much as 20 per cent on Wednesday to lows of $1.275 and 79.5c respectively. Splitit, which faces no bad debt risk as it relies on customers shopping with their credit cards, dropped as much as 16 per cent to a low of 26c.

Afterpay shares soared last year as investors valued the stock on the basis of its potential to dominate payment services in markets such as the US and UK, rather than the losses it has been generating.

As recently as August last year it was valued at more than 34 times its sales. The Commonwealth Bank is currently trading at 12 times its future earnings, according to ASX data.

An Australian Securities and Investments Commission (ASIC) report in 2018 said about 44 per cent of buy-now-pay-later customers had an income of less than $40,000 a year and there were already indications of a real risk that such commitments could contribute to financial over commitment by users.

A submission to ASIC at that time from the Personal Insolvency Professionals Association (PIPA) identified the buy-now-pay-later sector as a growing problem for insolvency professionals.

"When debtors apply for assistance, the buy now, pay later credit is often the most recent debt, obtained at a time when the debtor was already struggling with other loans, indicating that the debtor was an insolvent borrower," the association told ASIC.

Afterpay has been able to defy the naysayers up to this point and reported a falling proportion of bad debt in its most recent results.

18 Mar, 2020
DELIVEROO WILL NOW BRING KITCHEN AND HOUSEHOLD PRODUCTS TO YOUR DOOR
Concrete Playground

Even before the World Health Organisation (WHO) declared COVID-19 a pandemic earlier this week — and before the Australian government banned non-essential events with more than 500 people -  visiting an Australia supermarket to buy groceries had become a rather fraught affair. First came panic-buying of household staples. Then, limits on everyday items were put in place. Even after that, shelves normally stacked with toilet paper, paper towel, tissues, hand sanitiser, pasta and rice can still be found empty in plenty of stores around the country.

To help — and to help you stay home if you're social distancing or self-isolating — Deliveroo has announced that it has added kitchen and household products to its delivery range. As well as restaurants and other takeaway eateries, you can now order from local stores and supermarkets to get basic supplies dispatched to your door via the service.

The range varies depending on your area, as is always the case with Deliveroo; however, for those keen on staying home, it's a handy option.

Deliveroo has also implemented a 'no-contact' drop-off service, which lets you request that your rider leaves the food on your doorstep — so that you can still place an order if you are feeling unwell, have just returned from overseas or you're being cautious about coming into contact with other people.

 

16 Mar, 2020
Tech behind Amazon Go now available to any retailer
Inside Retail

Amazon is licensing out its Just Walk Out technology to allow other retailers to utilise the same tech powering its Amazon Go stores.

The offer utilises the same types of technology used in self-driving cars – computer vision, sensor functions and deep learning – to determine when customers take a product from a shelf and charges them for whatever they leave the store with. 

“Since launching Amazon Go years ago, many retailers have expressed an interest in offering similar checkout-free shopping experiences to their customers,” Amazon wrote on it’s Just Walk Out website. 

“We’re excited to now offer the ability for retailers to leverage Just Walk Out technology from Amazon in their stores.”

When contacted by Inside Retail, Amazon Australia didn’t confirm if the offer would be available locally. 

Bloomberg reported in late 2019 that the business would be licensing out its Go technology in 2020, stating that at the time Amazon hadn’t settled on a licensing model. Amazon vice president of physical retail and technology Dilip Kumar declined to confirm to Reuters what the model would be earlier this week.

The General Store partner and chief strategy officer Danny Lattouf told Inside Retail it was a smart move from the global marketplace should consumers adopt this kind of store experience.

“The gain here is ultimately monopolising the infrastructure and services that support this experience – let alone the data that comes with it,” Lattouf said.

“It feels like a merging of two business divisions for Amazon, taking a highly successful AWS business model and pairing it with retail for their customers – in this case, retailers.

“It could also be quite strategic as a defensive move to Chinese counterparts who are implementing similar technology.”

According to the website, installation of the Just Walk Out technology will take as little as a few weeks, and can be done while a store is under construction or as an addition to an existing store.

Though Amazon launched the first Go store in 2018, other retailers locally and internationally have since trialled their own versions of a smart-camera led store model. 

Woolworths launched its first Scan&Go concept store in Double Bay in September, 2018, and has since expanded the premise out to at least five other stores.

Convenience chain 7-Eleven also launched a checkout-free trial store in 2019, with customers only able to pay via the 7-Eleven mobile app. Customers scan the barcode of what they wish to purchase, pay using the app, and exit the store.

And it isn’t only large-scale retailers trying their hand at checkout-free locations, with NSW-based The Party People trialing app-based payments in its pop-up stores across Sydney and Melbourne. 

However, the experiences delivered by these local offers don’t come close to replicating the Just Walk Out technology, according to Lattouf.

“In the examples we’re seeing here the retailer is forcing the customer to do all the work, I personally see it as serving the retailer more than it does the customer,” Lattouf said.

“I think we [Australians] will consciously think we’re not ready for it, but the moment you experience it you’ll never want to wait in a retail queue ever again.”

10 Mar, 2020
Grocery deliveries delayed as online shopping soars
Most retailers are still out of stock of toilet paper even though retailers are rationing purchases and suppliers are increasing production.

Coles is advising e-commerce customers to pick up orders rather than have them delivered as a surge in online demand amid the coronavirus crisis leads to a blowout in delivery times.

Unprecedented demand from consumers hoping to avoid the shops and bypass out-of-stock essential items such as oilet paper, tissues and paper towels has fuelled record online grocery sales growth.

According to Nielsen Homescan data, online grocery sales rose 45 per cent in the four weeks to February 22, 2020 compared to a year ago, underpinned by demand for basic foodstuffs such as pasta (up 76 per cent, eggs (72 per cent), canned meals (71 per cent) tea (62 per cent), rice (58 per cent), flour (55 per cent) and shelf-stable milk (50 per cent).

The online teams at Coles and Woolworths are working overtime to meet demand but delivery times have more than doubled and there are not enough delivery windows.

 

Most retailers are still out of stock of toilet paper even though retailers are rationing purchases and suppliers are increasing production. AAP

Some shoppers have waited almost a week for orders which would normally be delivered the same day or next day, while express delivery services such as Woolworths' Delivery Now are unavailable.

The delays are particularly galling for customers who signed up to Woolworths Delivery Unlimited program and Coles' Delivery Plus programs, which cost between $15 and $19 a month or between $119 and $169 a year for unlimited deliveries.

"I can’t even select a delivery day at all anymore. You’ll need to start refunding people like me who paid months ago for a year’s worth of delivery and now cannot get any," Kate Schneider complained to Woolworths via Twitter.

Coles is recommending that online customers opt for click and collect, rather than delivery, and is prioritising deliveries to people who are sick, elderly or have special needs.

"There's been a huge increase in orders," a Coles spokeswoman said, adding that Coles' full team was working to clear the backlog and all Coles' delivery vehicles were on the roads.

Similarly, Woolworths said it was ramping up delivery capacity with the support of transport partners and doing all it could to fulfil orders as quickly as possible.

"Like our supermarkets, our online teams have been working hard to manage higher than usual demand for deliveries over the past week," the spokesman said.

"Delivery windows have been filling up faster than usual and we apologise to customers for the inconvenience this has caused."

The risk for retailers facing out-of-stocks and slow online deliveries is that customers will shop around to source much-needed supplies and customer loyalty will diminish.

“Managing stock levels will be critical as continuous out-of-stocks will result in shoppers store-switching to get the products they need," said Bernie Hughes, managing director of Nielsen Connect.

Out-of-stock will also affect brand loyalty as shoppers are forced to choose brands they don't normally buy.

Mr Hughes said pantry stock-piling would bring forward future purchases for products such as toilet paper and lead to a sales trough in the medium term as consumers worked through stockpiles.

However, other categories, such as shelf-stable foods, could enjoy a sustained sales boost as more consumers ate at home.

Citigroup's head of research, Craig Woolford, agrees, saying pantry-stuffing could add 1.2 per cent to 2.5 per cent to Coles' same-store sales in the March quarter, "but the uplift could easily result in a similarly weak result in [the June quarter] given pantries are full."

Most supermarkets remained out of stock of toilet paper on Monday even though retailers have rationed purchases to one or two packs and suppliers have increased production and are delivering directly to stores rather than to distribution centres.

“Unfortunately many stores are still selling out within an hour of delivery,” a Coles spokeswoman said.

On Monday, Aldi joined Coles in limiting customers to one pack of toilet paper and put up signs nationwide saying: “We apologise if this act of courtesy is a disruption to your shop.”

4 Mar, 2020
Catch's secret weapon: "we ranked number one for Black Friday"
SOURCE:
Ragtrader
catch.com.au CMO Ryan Gracie discusses the online shopping market from Cyber Weekend to Christmas and 2020.

What campaigns did you execute to promote Cyber Weekend 2019 (EDMs, social etc) and which were the most effective?

“Running successful sales campaigns 365 days a year is our bread and butter; Catch.com.au is always on. So, when it comes to major sales events such as Cyber Weekend, it becomes less about creating new campaigns and more about re-adjusting existing campaigns to push even harder.

“The number one priority for sales associated with key retail calendar dates, such as Black Friday and Cyber Monday, is to first ensure that internally, our buyers and our suppliers have sourced and curated the best deals available. When it comes time to promote the event, we utilise all available channels to ensure current and prospective customers are targeted and well aware of the promotion.

"This includes running highly segmented email campaigns, push notifications on mobile apps, updating messaging in SEM, attention grabbing creatives across social, working closely with our affiliate networks, creating clear banners that are used across all Catch.com.au platforms, and of course, leveraging our PR team to share targeted deals that will appeal to different shoppers.

"We are everywhere that customers are, but it’s important that we are there when they have intent to buy, and also there to create impulse. SEO was especially strong, with Catch.com.au ranking number one for Black Friday.

“It is a combination of all channels that drive people to the site whether we’re hosting a category or industry-specific sales event or not, but at the end of the day, it’s the deals that get people over the line.”

Has the strategy changed from previous years?

“We tweak the strategy, but this is retail. People want great brands at great prices, so that is core to any strategy and it underpins all of our sales events, and Cyber Weekend 2019 was no different; sell amazing products at unmatched prices. It’s all about delivering value to the customer.”

How did Cyber Weekend 2019 compare to the previous year in terms of sales and visits to the site?

“Catch.com.au experienced exponential growth in both sales and visits to the website during Cyber Weekend 2019. The 2019 numbers were a significant increase on the previous year.”

What promotions did you offer?

“Savings of up to 70% off thousands of products, sitewide, as well as heavy discounts on individual products, and savings across specific categories and sub-categories.”

 What were some key selling items or categories during the Weekend?

“Sports Apparel, Technology and Fashion were amongst the top-selling categories during Cyber Weekend 2019. With over two million products on the site, we have a great spread of sales, but the headline categories always over-index during sale periods.”

Geographically, where did a majority of sales and traffic come from?

“As is true for the rest of the year, the majority of sales and traffic for Cyber Weekend 2019 came from Australia’s two major capital cities - Sydney and Melbourne. That being said, Catch.com.au also has many loyal customers in regional towns and cities across the states.”

Were the majority of purchases via desktop or mobile?

“The majority of purchases were made via mobile. Sales on the Catch.com.au app make up a significant proportion of sales on mobile devices.”

Was Cyber Weekend more popular/busier than the Christmas trading period?

“It is tricky to compare trading during Cyber Weekend and the total Christmas trading period. Christmas trading takes place for many weeks in the lead up to December 25th, whereas Cyber Weekend happens over the course of just four days.

“With that being said, both periods are, and in 2019 were, extremely successful. If we are to look at sales made during a limited period of time - i.e. four days - Cyber Weekend absolutely proves more successful due to the limited time the campaign is live for. On the flip side, the Christmas trading period shows a consistent number of high sales for a longer period of time. It’s also debatable as to whether Cyber Weekend in fact just pulls sales forward. I don’t believe that people suddenly have extra money to spend, they just spend it at a different time. Our job is to ensure they spend it with us on those massive sales days.”

How did you keep the sales momentum going into Christmas and New Year?

“Our momentum strategy remains simple but effective throughout the year; deliver great products at great prices, ensure fast delivery, maintain exceptional customer service, and drive campaigns that reach a large audience. We also have a strict customer onboarding and retention strategy that keeps new and current customers visiting and purchasing on Catch.com.au.”

When is the next big trading day or event for you?

“With everyday low prices, and a core range of products that appeal to the majority of Australian’s, we would consider every day to be a big one as we continue to experience significant YoY growth. We do like to reward our customers with extra savings and we look to hold even bigger events throughout the year.”

18 Feb, 2020
Kogan sees record half-yearly sales and profit, though revenue dips
Inside retail

Kogan has broken through the slump that affected many retailers over the Christmas period, delivering record gross sales and profit for its first half of FY2020, as well as a 20.8 per cent growth on net profit. 

Gross sales grew to $322.9 million for the half, 16.4 per cent up on the prior corresponding period’s $277.3 million. Gross profit also saw strong growth of 10.6 per cent to $49.9 million, up on the $45.1 million achieved the prior year. 

Additionally, the business’ net profit rose 20.8 per cent to $8.9 million, from $7.4 million during the first half of FY19. 

However, revenue from third-party brands fell by 25.3 per cent compared to the prior year, while revenue from exclusive brands rose 17 per cent. Along with declines across Kogan Travel and Kogan Insurance, the business saw total revenue fall 5.3 per cent to $219.5 million. 

“This half has been a period that saw us taking significant steps to invest in the future success of our platform and make it easier than ever for customers to shop with us,” Kogan founder and chief executive Ruslan Kogan said. 

“In particular, the continued growth of Kogan marketplace has led to a transition period for the company. 

“As we further enhance the Kogan Marketplace platform it will enable us to achieve ongoing growth without relying on inventory and associated capital requirements and constraints. “

The marketplace offer saw gross sales improve 44.6 per cent in the December quarter compared to the September quarter, and Kogan said the vertical has a backlog of sellers ready to be onboarded to the platform. 

During the half the Kogan brand launched four new verticals in Kogan Super, Kogan Mobile NZ, Kogan Credit Cards and Kogan Energy, and improved loyalty program Kogan First memberships “significantly” – though the business didn’t specify the exact growth it achieved.

In regard to the upcoming half, Kogan didn’t give a firm outlook but said January gross sales had grown 17 per cent on the prior year. 

Additionally, having now diversified itself across 14 different verticals, Kogan is looking to reach a 1 per cent market share in each of these industries – having already reached this in Kogan Retail and Kogan Mobile Australia. 

And while the business didn’t report any impact from the ongoing threat of coronavirus, it did cede that should any of its international suppliers or manufacturers suffer sustained closures or delays 2H20 earnings may be impacted. 

14 Feb, 2020
The use of meal delivery services like Uber Eats and Deliveroo in Australia has doubled in 18 months, according to new research
SOURCE:
Pedestrian
Pedestrian

It should come as no particular surprise Australians are enormous fans of meal delivery services.

But still, the rate of growth is huge. According to new research from Roy Morgan, the use of meal delivery services doubled in the 18 months since the research company did its last study into the then-burgeoning industry in mid 2018.

According to Roy Morgan's research, nearly 4 million Australians aged 14 and over now use meal delivery services, as compared to 1.98 million in mid-2018. 

This growth is driven largely by younger Australians, with over a quarter of millennials and Gen Z saying they use meal delivery services. By comparison, only 6.3% of baby boomers do.

Uber Eats remains the king among services, with 11.5% of Australians reporting they use it.

Roy Morgan CEO Michele Levine said in a statement provided to Business Insider Australia the rapid development did not come as a shock.

“Roy Morgan has closely monitored the usage of apps over the last few years and the rapid take-up of meal delivery service apps since Uber Eats and Deliveroo launched in mid-2015 is no surprise,” she said.

“Uber overtook the taxis as the preferred private transport service in mid-2019 and with only a fifth of Australians now using meal delivery services there is still plenty of room to grow usage. Already the younger generations of Millennials (29.7% usage) and Generation Z (28.7%) are approaching market penetration of a third.”

Not everyone is cheering

The frictionless ease of use promised by food delivery apps hasn’t necessarily been applauded by all stakeholders.

Despite the success some restaurants have seen selling their product through services like Uber Eats and Deliveroo, others are more circumspect on the impact on the restaurant economy.

Following the announcement this week that George Calombaris’ restaurant empire had collapsed, newly appointed administrators KordaMentha was quick to point the finger at meal delivery services as a pain point for the industry.

“Other factors were generally difficult trading conditions in the hospitality industry in recent years due to the expansion of the on-demand economy via services such as UberEats and Deliveroo, increasing costs, fierce industry competition and changes in consumer tastes to favour cheaper mid-tier dining options,” KordaMentha’s statement read.

At the end of 2019, restaurant industry body Restaurants and Catering Australia (RCA) issued a call for consumers to ditch the apps to which they had grown so accustomed.

“We encourage people to actually go to their favourite restaurants to either pick up their food or dine in rather than use a delivery platform,” RCA CEO Wes Lambert told Business Insider Australia. 

“Convenience is obviously a strong driver for patrons, but it is important diners understand that restaurants will close if something doesn’t change soon.”

With delivery app usage only going up – and younger people driving the shift – it seems something might have to give.

11 Feb, 2020
'Hollowed out': Google's nightmare comes true as search business slows
SOURCE:
The Age
The Age

New numbers from Alphabet this week confirmed a major fear that has lingered around the internet giant for years: the Google online search business is slowing.

In its 2019 financial report, Alphabet split its advertising revenue into three buckets for the first time: Search, YouTube and a network business that runs marketing spots on other websites. Search sales rose 15 per cent in 2019, a slower pace than the 22 per cent in 2018.

"This hollowing out of search is real," Mark Shmulik, an analyst at Sanford C. Bernstein, wrote in a note to investors after the results. To maintain growth at even this lower level, Google will have to generate more revenue from its Maps service, image search and shopping search ads, he said.

Google search is one of the most profitable businesses ever created, helping the company amass a cash hoard of more than $US100 billion ($148.5 billion). It took Google from a garage in Silicon Valley to a trillion-dollar giant that dominates digital advertising, online video, maps and email.

Search grew rapidly as more people got online looking for information. Smartphones also boosted usage and revenue climbed after Google loaded more ads into the top of mobile search results. But there are limits to the growth of such a large business.

Google can only stuff so many ads onto its website without lowering the quality of search results. On mobile phones, ads often fill the entire screen, forcing users to scroll down if they want to see free listings. Over the years, Google has used various tweaks to wring more clicks out of search ads. But there may be limits to that, too. Recently, it changed the way ads are labeled, causing some people to say it was trying to blur the line between ads and free results. The company quickly backtracked.

And fewer people are joining the internet in the most lucrative search ad markets. From 2017 to 2019, the number of internet users in Europe grew 10 per cent, while in North America growth was only 2 per cent. In Asia, the online population jumped 19 per cent, according to data aggregation company Statista. Google worked on a censored search service for China, the world's largest internet market, but scrapped the project after some employees and US politicians criticised the effort.

Some of the most valuable search ads - those for specific products that people can buy - face competition, especially from Amazon.com. About half of product searches start on Amazon now, Bernstein's Shmulik wrote in a research note earlier this year. That's spurred Google to build new kinds of shopping ads, but it hasn't reversed the growth slowdown. Searches for decorating ideas and clothing are also increasingly happening on social networks such as Pinterest and Instagram. And millions of people look for music on Spotify's mobile app, not Google.

"This hollowing out of search has been underway for many years and is not well understood," Shmulik wrote.

Google is working hard to scoop up many of these more-specialised searches. However, the Bernstein analyst still expects revenue growth to slowly subside. After increasing 19 per cent a year from 2015 through 2019, Shmulik estimates Google search revenue will climb 13 per cent to 15 per cent annually in coming years.

11 Feb, 2020
Rise of social commerce inevitable in 2020, data shows
Inside Retail Australia

With almost half of the world’s population now using social media, the growing awareness of social commerce — the use of social media platforms to send traffic to e-commerce sites and drive e-commerce purchases — seems inevitable. 

Forty-nine per cent of the world’s total population, about 3.8 billion people, now uses social media, a 9 per cent (321 million) increase from 2019, according to data released by social media management site Hootsuite and socially-led creative agency We Are Social.

“We believe that social is a crucial channel for retail brands looking to connect with existing and new customers,” said Suzie Shaw, managing director at We Are Social Sydney.

Shaw said this ever-growing channel, which has now reached 71 per cent penetration in Australia, offers unparalleled opportunities to accurately target consumers based not only on their demographics but also on their interests and behaviour, allowing brands to tailor their key messages to many different audiences.

A growing number of people are also now using social media to research and discover new brands, thanks to promoted content, customer recommendations and influencer endorsement, Shaw added.

“So it’s crucial that brands have a solid strategy in place that takes into account how consumers talk about them and their products, and use social media to provide support and generally add value to their lives, to win their trust and, in time, loyalty,” she said.

Nathan Huppatz, who runs and operates Costumes.com.au, said these days retailers need to look at the bigger picture.

“Attributing value to a channel (like Google) is becoming a little harder with social platforms like Facebook, Instagram, Twitter and others,” Huppatz said.

“These days we need to look at the bigger picture. Customers might see your brand on Instagram one day, Facebook the next, and this might prompt them to do a Google search, click an ad and buy something,” he said. “So in that scenario, which channel should be attributed with the sale? They all play a part.”

According to the Digital 2020 report, the global average for daily time spent on social media is two hours and 24 minutes, accounting for more than one-third of people’s total internet time.

In Australia, this is not just socialising but a way to earn a living; nearly a third, 30 per cent, of internet users aged 16-64 use social media platforms for work.

The world’s most-used social platforms are Facebook, YouTube, and WhatsApp. TikTok, in 7th place, now has 800 million monthly active users, with 500 million of these users in China. 

The data also reveals there has been an increase in advertising audience numbers across many major social platforms. Facebook’s data shows 1 per cent growth over the past quarter, while Instagram’s ad audience has risen by nearly 6 per cent in the same time period. The standout performer is Pinterest, whose advertising audience numbers jumped 12 per cent after it added a number of new countries to its advertising targeting options. 

“We have a reasonable budget for paid marketing, mostly with Google (Adwords) and Microsoft (Bing), as well as social media platforms,” Huppatz said. “Over time, we have shifted a little more spend towards social, as we try to find the right amount of touch points with our customers.”

Dean Salakas, who owns a small chain of bricks-and-mortar stores which also sells online, said, however, that picking the right marketing channels for a business would depend on the retailer and the industry.

“For some retailers, social is the best channel and for others it’s Google,” Salakas said. “I would say all [channels] work, it’s just a matter of having the right mix and strategy for your business.”

Huppatz said to have a successful social media marketing, one needs to do research and dig into data to find out who the ideal customer is for the business.

“Build a buyer persona. Are they male? Female? Have family? Retired? Once you understand your target audience a little better you can work out where they spend time,” he said. “It might be Facebook, it might be LinkedIn, it could be Twitter. Then build some small campaigns to test the water.”

The Digital 2020 report revealed 4.54 billion people are now online, a year-on-year increase of 298 million, or 7 per cent, approaching internet penetration of 60 per cent. Half of internet users use ad blockers.

Roughly 3.2 billion people around the world remain offline.

The average internet user will spend six hours and 43 minutes per day online in 2020 — more than 100 days in total. Globally, people will spend a collective 1.25 billion years online this year. Google and YouTube are once again the most visited websites, but Yahoo! still remains popular, with its website continuing to receive more traffic than Amazon.com and the world’s top ‘adult’ websites. 

The data also showed there are now 5.19 billion unique mobile users globally and for the first time, more than half (50.1 per cent) of all internet time is spent on mobile devices.

Australia is one of the top five global spenders in consumer goods online at $1,157 average revenue per e-commerce user. Mobile is now the top device for making online purchases. The world’s e-commerce users spent more than $3 trillion on online B2C purchases in 2019, with shoppers spending an average of almost $500 each on consumer goods alone – a year-on-year increase of 9 per cent. 

“This year we will see more retailers across a variety of categories of product and service trying to find their own social commerce angle, as the technology evolves and offers new ways for users to discover, trial and recommend products – then purchase, of course,” Shaw said.

“More and more retailers will learn how to push consumers through the social funnel, from discovery to purchase, in a few taps, creating a new substantial revenue stream and winning shares over their competitors.”

In the past few years, social platforms have developed new features, like Facebook Collections and Instagram Shopping, to make the path to purchase and sharing as seamless as possible. Pinterest has recently added a new ‘Try On’ functionality that, by leveraging its AR Lens, allows people to try makeup from different brands then shop for their favourite one with a simple swipe up.

Shaw said when it comes to digital marketing, there is no one-size fits all: what’s a winning strategy for a brand can produce negative results for another one, even in the same category. 

Huppatz said there are many great tools available online for retailers and businesses just need to pick the right fit for them.

But, he said, the most important thing businesses need to consider is still to focus on the core things they need to make customers come back.

“Great product at great prices of course, but also amazing customer service and buying experience,” he said. “This includes your customer support, and everything after the purchase too. Good delivery options, great packaging. Make it memorable.”

7 Feb, 2020
NYSE owner bids $US30b to buy eBay
SOURCE:
AFR
AFR

New York | The owner of the New York Stock Exchange has made an offer to buy online marketplace eBay, The Wall Street Journal reported.

The Journal said Intercontinental Exchange (ICE) is valuing eBay at more than $US30 billion ($44.7 billion), compared with eBay's value of about $US28 billion before the report. The newspaper cited people familiar with the matter who were not named.

The acquisition would represent a substantial departure from ICE's focus on financial markets. The move would call on its technological expertise in running markets to extract efficiencies from eBay's marketplace platform, which connects buyers and sellers of goods around the world.

Atlanta-based Intercontinental Exchange declined to comment on the report. EBay did not immediately respond to request for comment.

Activist shareholders have been pushing eBay to make some significant strategic changes, including selling off its ownership of online ticket resale site StubHub.

Shares in San Jose, California-based eBay closed Tuesday up almost 9 per cent. ICE's shares slumped more than 7 per cent.

ICE, which also operates futures exchanges and clearing-houses, has faced pressure from US regulators to freeze or reduce the fees it charges to operate financial markets, spurring it to diversify its business.

EBay has been shifting focus to its advertising and payments businesses amid stiff competition in its marketplace business from Amazon.com and Walmart

with Reuters

AAP

7 Feb, 2020
Colette by Colette Hayman collapses, 140 stores at risk
SOURCE:
The Age
The Age

Poor trading and a failed funding agreement have led to the collapse of women's fashion retailer Colette by Colette Hayman, placing 140 stores and hundreds of jobs at risk in the ongoing brutal retail environment.

The handbags, jewellery and fashion accessories brand was put in the hands of Deloitte administrators Vaughan Strawbridge, Sam Marsden and Jason Tracy on Friday.

It marks the fourth major retail collapse in the last few months, with fellow fashion retailers Bardot and Jeanswest raising the white flag in January. Discount department store Harris Scarfe also collapsed late last year.

Mr Strawbridge told The Age and The Sydney Morning Herald in addition to poor trading conditions, the business had been expecting fresh funding to replenish its capital after paying off debts. However, the funding deal fell through, forcing the owners to place the business in administration.

"There was some funding the directors thought would be made available, and when that didn't come to fruition they found themselves needing to appoint administrators," he said. It was too early in the process to reveal the nature of the mooted funding, he said.

Its 140-strong network of stores, which employs 300 permanent staff plus casuals, also contains a number of underperforming stores, which Mr Strawbridge said administrators were currently assessing potential options for.

The eponymous accessories label was founded in 2010 by businesswoman Colette Hayman, the former owner of jewellery chain Diva, who operates the company alongside her husband Mark.

Ms Hayman began the handbag retailer after selling Diva in 2007 to Brett Blundy's Lovisa. It remained privately owned for much of its life before investment giant IFM Investors took a stake in the business in 2017.

Company records show the retailer, which is registered as the CBCH Group, is 51 per cent owned by Ms Hayman and her husband, and 49 per cent owned by IFM.

It has yearly gross sales of more than $140 million, with the company reportedly selling upwards of three million handbags per year. Most of its stores are located in Victoria, New South Wales and Queensland, and it also has 14 stores in New Zealand.

It's unlikely to be the last major retail collapse for the first half of the year, with analysts and experts warning the poor trading conditions, high rents and weak consumer confidence could see more prominent brands give up the ghost.

Fellow handbag and accessories retailer Oroton collapsed in 2017 after the upmarket brand failed to find buyers.

Mr Strawbridge, who is also overseeing the administration of Harris Scarfe, said conditions were worse than usual, but remained optimistic about the collapsed companies' finding buyers.

"I don't think we've seen this number of retailers who've struggled at the same time before," he said. "But it would be a real shame if those businesses didn't come out of administration."

Colette stores will continue to trade while Deloitte seeks to either recapitalise or sell the business, with administrators confident there would be an appetite from buyers given the strong "heart" of the business.

Staff will continue to be paid by the administrators and gift cards will be honoured.

31 Jan, 2020
Afterpay's model 'not sustainable' warns CBA backed rival Klarna
The Sydney Morning Herald

Klarna chief executive Sebastian Siemiatkowski warned the commissions rivals such as Afterpay charge merchants are unsustainable as the Swedish group announced the Commonwealth Bank had tripled down on its investment by injecting another $US200 million ($297 million) into the business.

Mr Siemiatkowski said that Klarna, which provides a wider suite of services to consumers than traditional buy now pay later providers like Afterpay, takes a margin of 2.2 per cent from merchants to provide its service. Other operators like Afterpay charge as much as five per cent.

"We don’t think that is a long term sustainable level, we think they (Afterpay) will drop to the same levels we operate at," he told the Sydney Morning Herald and The Age prior to the launch in Australia.

Klarna is a direct rival to Afterpay, the ASX-listed market darling which has posted a dramatic share price increase in the last few years to become a $10 billion company. Klarna is valued at $US5.5 billion after the latest CBA investment.

Klarna said it has a broader suite of services that will help drive its adoption in the Australian market which is dominated by Afterpay and other rivals like Zip.

Klarna is counting on the adoption of its smartphone app and strong cross marketing from CBA to help introduce local shoppers to a service that offers more than a buy now pay later service.

“There is a global opportunity to create a very different payment experience, a very different online shopping experience across all markets, and that’s the one we are trying to bring to Australia,” he said.

This includes presenting users with images of purchases made, the ability to track deliveries and make returns all via the app.

The main difference to the app in Australia is that it will be seamlessly integrated with the CBA bank app as part of the close tie up between the two companies.

CBA last August said it was taking a $US100 million or 1.8 per cent stake in the Stockholm-based payment service, on Thursday the banking giant said it was trebling the size of its investment, giving it a 5.5 per cent shareholding.

The bank said upping its investment would "increase strategic alignment, bring additional rights, and gain exposure to Klarna’s international growth."

“Our partnership with Klarna will further enhance the customer experience in our leading banking app and address the rapidly growing demand among consumers for new payment options," said CBA chief executive Matt Comyn.

"In particular, it allows us to build on our leading technology to deliver the very best payment services for our customers and merchants in Australia, on platforms which are safe, secure, and easy to use."

The bank, which is keen to grab a piece of the booming buy now, pay later market, said Klarna would allow customers to shop at "any online store", with their shopping showing up in the bank's app.

Klarna also counts rapper Snoop Dogg as a shareholder.

Klarna has more than 85 million customers using its service globally, which is available from 200,000 merchants, CBA said. Afterpay said last month it had 6.6 million active customers, and 42,500 merchants on its platform.

CBA said it would have 50:50 ownership rights to Klarna's Australian and New Zealand business, and it had the right to partner with Klarna in Indonesia.

AfterPay has been contacted for comment.

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