Fast Five from the Valley: Edition 29
Feels like retailers are in a world of pain at the moment, and it’s not going to get any better. The news out this week is that Toys R Us failed to reach a debt restructuring deal or find a buyer, with it likely that it will close more than the 180 stores already earmarked for closure, or wind up its US operations altogether. Claire’s outlook does not look rosy either, with it filing for bankruptcy as well. Similar to Toys R Us, it is experiencing trouble from a high debt load (from a historic PE deal), declining foot traffic and shifting spending patterns. Last year saw 26 major retail bankruptcies (firms with greater than $50m in liabilities), and this year looks like will likely be worse, with 24 of the major retailers planning store closures in 2018 and 94% of retail execs expecting as many or more bankruptcies in 2018. As a backdrop, the US has about 24sq feet of retail per capita, the most in the world (~25% more than Canada).
Retailers are seeking to respond to the recent stats which identify that 70% of Americans have purchased items on their mobile and 21% of consumers are using voice or chatbots for commerce, with Target this week announcing its release of smaller format corner-store format stores and earmarking $7bn for digital initiatives and rethinking the store concept. Nordstorm also announced the acquisition of BevyUp which enables employees to assist customers with item selections digitally and MessageYes which provides AI generated suggestions through mobile messaging. Nordstorm is also going through a store design rethink. However, it’s important to remember that while the digital transformation is often initially well received by the press, it often fails to deliver the needed returns in a timely fashion in the quantity desired. In fact, this initial attention from the press and stock price bump actually drives executives to sometimes overweight on digital and not pull the plug on poorly performing digital initiatives early enough.
Meanwhile, Amazon is shifting its Prime Pantry (where consumer staples can be delivered) to a subscription service and is rumored to be targeting the travel sector next.
Self-driving trucks are gaining momentum as Google’s Waymo puts new vehicles on the roads of Georgia
Last week, Uber publicly revealed that it has been testing autonomous trucks under the supervision of a human safety driver on Arizona’s highways since November 2017. In addition to this, the talk of the town, the San Francisco-based autonomous trucking startup Starsky Robotics, has announced it had completed a seven-mile automated trip in Florida without any humans onboard. But the biggest autonomous truck driving headline came from Waymo – the self-driving division of Google’s Alphabet. The company has unveiled a new pilot project involving self-driving trucks that will be based in Atlanta.
Atlanta has been strategically selected as Google’s new playground for autonomous truck driving operations because of the high density of shippers and carriers in the area with their extensive network of factories, distribution centers, ports, and terminals at one of the busiest airport in North America. For now, Waymo will be just carrying cargo bound for Google’s data centers but other use cases will soon follow.
Waymo says the underlying custom-built sensor technology is the same as what has been tested on more than 5m miles of Arizona’s public-roads by Waymo’s fleet of self-driving Chrysler minivans. John Krafcik, the CEO of Waymo describes autonomous truck driving as a “low-hanging fruit” in the deployment of self-driving technology. The reason is obvious: most goods (almost 80%) in North America are moved on trucks and the trucking industry generates almost $700 billion per year. There are approx. 3.5 million Americans employed as truck drivers but there is a shortage of around 50,000 drivers at the moment. The high industry turnover combined with the labor shortage puts autonomous trucks in the spotlight.
From the perspective of the consultancy of a large-scale telecommunications provider, we are excited to see that autonomous vehicles are no longer the “future talk”. As leading tech giants pave the way for autonomous driving, there need for autonomous connectivity networks grows as they rely on underlying low-latency networks. We are proud to be a part of this! Did you know, that in the United States, T-Mobile looks well placed as to capture more market share from its larger main competitors as it invests heavily in its network?
M&A – not always happy ever after
Dropbox dropped a box-ful of news this week, officially announcing its IPO date of April 3 and that it will do it by direct listing, where the shares are directly sold to the public. However, while IPOs are often viewed as the end game for founders when they are establishing a company, the opposite often proves to be true. Two examples of this are Blue Apron, where shares have declined post IPO due to the entry of additional competitive threats like Amazon, Walmart (who announced that they will offer in-store meal kits) and Weight Watchers (who announced they would sell kits in grocery stores). Meanwhile Snap is shaving off 10% of its workforce. While focusing on cost bloat is a positive initiative, this does not address the perennial question of whether today’s youth will stick with the app or move onto the next big thing, especially following tweets of Kylie Jennifer (one of the Kim Kardashian team) which criticized the new design, and Rihanna who urged fans to delete the app following an ad that appeared to joke about domestic violence (causing a $800m drop in market value). The talk of the town, of course, is the failed tie-up of Broadcom and Qualcomm (would have been the largest tech M&A deal if completed), as the Whitehouse intervenes to block the deal, citing national security interests. Finally, Theranos founder has been charged with massive fraud by the SEC, following misleading claims about the sales of the company and the sophistication of its testing equipment. Holmes had to give up control of the company (which at one point was worth over $9bn) and is barred from serving as a director in a public company for a decade.
3D printers churn out cheap mass-built concrete houses
With more than 1bn people in the world that do not live in adequate housing, increasingly cost-effective 3D printing technology is poised to be the new way bring down this number. Austin-based robotics construction startup ICON has just recently presented a cost-effective solution to tackle the global housing problem: a 3D-printed home built by a mobile printer. The Vulcan can lay create a 650 square foot 1-story cement house in less than a day. ICON can currently produce houses around the $10,000 mark but is confident it can bring the costs down to $4,000 per house as it scales up their production numbers. The next major step for the company will be testing the creation of 100 cement houses in El Salvador by 2019. Have a look at how cement 3D printers work in action:
Try to beat the newest record-holder for the fastest time in solving a Rubik’s Cube in less than a second!
Remember those days when people would compete against each other to see who was fastest at solving a Rubik’s cube?
Well, it seems that those days may soon be over with the most recent record-holder, besting the previous record with an astonishing 0.637 second solve.
Oh, we forgot to mention that yes, the new record-holder is indeed, not human but a robot.
Clearly, this is another example of the impressive capabilities of artificial intelligence (AI), demonstrating yet again that man cannot hope to compete against a machine.
However, as Jack Ma, the co-founder and executive chairman of Alibaba Group, stated, “We shouldn’t fear AI”. As the world turns towards automation, human workers can be kept relevant through education emphasizing imagination, creativity, wisdom, values, independent thinking, and teamwork.
In the meantime, have a peek below at how technology has made traditional human problems look like child’s play.