The press has been agog recently with the news of Amazon Go. This Seattle-based superstore with its grab-and-go technology allows consumers to scan, bag and pay using their phones with no human interaction. This is being heralded as an example of how data-driven vendors such as Amazon are redesigning the future of retailing. But is Amazon Go just an experimental Petri dish in the laboratory of retail? Or is it the forerunner of a wider lifestyle revolution for the millennial generation? If online shopping was retail revolution V1.0, are spooky unmanned bricks-and-mortar stores V1.1?
It is true that the infrastructure required to deliver the frictionless checkout system of Amazon Go is not in the reach of all retailers – yet. However, a number of innovative game-changers are already redefining the shopping experience both for retailer and consumer. And will continue to do so.
Customisation, rather than generalisation seems to be the future way forward. Consider mass personalisation – this rapidly growing global phenomenon sees businesses using smart data to get a handle on what their customer would like to buy and how they would like to buy it, based on their purchasing history.
In this way, individual customers from a large base can be offered bespoke information and delivered tailor-made deals to their needs and preferences. Businesses win by gaining a deeper and richer level of data quality to increase consumer traffic and with that, more conversions. Customers win by feeling better catered-for, more cherished and valued.
Consumer packaged goods have jumped on this personalisation bandwagon too, so that mass-produced goods can be customised to the consumer – your own named Marmite jar, for example, or wine uniquely labelled for a special event.
AI was the leading tech trend of 2017 and looks set to dominate going forward. AI uses software to do tasks that normally require human intelligence. That might be designing a webpage to optimise a particular result, providing a virtual assistant to help with support for products and services or to dramatically reduce the time it takes to analyse digital marketing results. AI can do this faster, more dependably and on a greater scale than humans. There is virtually no area of software development that will not be transformed by AI in the next few years. And that includes online commerce and retail. Advisory AI can target potential customers based on their previous buying choices; think of Netflix’s recommendations formulated from your film choices and browsing history, or Amazon’s suggestions.
Autonomous AI acts as a virtual sales assistant, obediently following up your choices, reminding you of them and at the same time collating consumers’ data for analysis. Both AIs will have roles within B2B and B2C enterprises. AI works. Take Google Translate as a case in point. After applying deep learning techniques to this process, translation errors were reduced by 60%. Imagine if businesses could improve checkout designs by that order of margin, or make comparably huge strides in conversion from a recommendation engine. The impact on profitability could be immense.
We have also seen the growth of the bespoke subscription economy with its consumer-driven shift from ownership to outcomes. Uber, Amazon Prime, Spotify and Netflix are good examples.Rather than buying products, consumers subscribe to services with flexible pay-as-you-go, monthly or longer-term contracts. Eschewing the brevity of your usual retail experience – see product, purchase product – the subscription-based model is an on-going relationship, a sustained and developing dialogue between business and client, customised around the client needs.
Subscription experiences such as Dollar Shave Club or Craft Gin Club and other assiduously curated themed product packages, will continue to provide recurring revenue for smart retailers. The interplay of tech and mortar will continue to be a theme. It could be the Amazon GO model or one by menswear shop Bonobos in the States where their ‘guideshops’ allow you to try the clothes on, but you order them online for home delivery.
In the future, luxury shopping will be a curated experience. Designers may send driverless cars to chauffeur their gold card customers to their stores. There, in the privacy of the dressing room, consumers will use an interactive screen to select samples to try on. Alternatively they could call up an accurate 3D version of themselves to style the clothes for them and get suggestions about design, fit and colour choices. And expect ever-faster delivery. Amazon’s Prime Air, originally greeted as a publicity stunt but now being tested in rural parts of Britain, promises a 30-minute drone delivery. Such initiatives, should they come to fruition, could mean that one day, your newly purchased outfit could beat you home.
Retail is reinventing itself and consumers can expect to be wooed by what is being termed ‘consutainment’ – a fusion of convenience, consumption and entertainment. Lloyds in Manchester is a good example of this, where customers are treated to a coffee, free wifi and programme of events. All of these activities rely on data – customer data, stock data, knowledge about how customers are using your website and better ways to reach your customers. It’s almost guaranteed that, in the coming years, companies who know their data and use technology to harness it in new innovative ways will thrive in this brave new retail world.