Three tech innovations that’ll change the way we shop online
The way we shop is in a continual state of flux. Amazon, the pioneer of online retail has just announced own-brand grocery launches. Add to that fresh and frozen deliveries in the US with Amazon Prime Now, retailers certainly have considerable food for thought. There’s no respite on our shores either – as the likes of ALDI and Lidl continue to shake up grocery with a focus on price, convenience and own-brand (more on this on our blog later this week).
Yet while instore isn’t set to go away any time soon, some much-hyped technologies on the horizon are set to make online as compelling as ever, and improve our overall retail experience to boot. As virtual reality, machine learning and other tech take off, they promise to blur the lines between in-store and online shopping.
Here’s my take on how technology will impact the consumer retail experience in the (not-too-distant) future.
1. Sofa-surfing and VR – what’s next for online shopping?
Let’s face it. Ordering your weekly shop online is hardly a user-friendly process. It’s clunky and a pain to navigate. You could argue that the big four have dragged their feet when it comes to online retail, but the situation is actually more nuanced. Traditional supermarket brands have masses of store real estate to consider and distribution models that are designed to get product to store, not to customers’ home addresses. Plus, they’re also often lacking the R&D budget to be technology leaders because they’re sinking their investments into their physical presence.
Projects like Tesco Pele, however, which recreate the supermarket in virtual reality, suggest the tide is turning. Immersive, realistic VR food shopping has incredible potential. First off, walking the aisles is more closely aligned with how many of us actually shop. Today, we’re more likely to pick and choose items, and top up our food supplies each day. Just look at the current proliferation of Co-op stores. I certainly prefer to arrive with a loose idea and be inspired – shopping as discovery can be far more engaging than a big weekly shop with a list.
Replicating the in-store environment online would be a boon to retailers. There’s the opportunity to up-sell and increase online footfall. Who’d leave the house to shop if you could have the same experience on your sofa? I’d be surprised if a big player like Amazon doesn’t get into VR technology soon. It has a tremendous buy-in into the online sector – and the R&D capabilities too. That’s if Google or Facebook don’t get in on the action first.
2. Machine learning – the rise of smarter product recommendations
While VR’s a way off, supermarkets should have nailed recommendations yesterday. Traditionally the domain of online retail, the same principles could see wider introduction in-store. Machine learning algorithms – and the smarter recommendations they entail – could transform what we put in our shopping baskets.
In a nutshell, machine learning is a form of artificial intelligence that provides computers with the ability to grow and change when exposed to new data. What we currently have in-store is based on plain facts and is more static. Plus, it’s a post-transaction experience. You might be offered a few suggestions at the counter based on your purchases – i.e. “customers who bought the same items also bought X”. Machine learning, however, is more predictive. It can identify your gender from what you buy – or even offer up recommendations based on the order of your purchases. SAP has piloted vending machines with this kind of technology built in – the challenge for the traditional bricks and mortar retailers is to integrate the same kind of technology with the store experience.
Admittedly it would be a big investment to implement the principles of machine learning in-store. But with technology like beacons, shelf-edge stickers and RFID, on-shelf recommendations are certainly a possibility and the VR stores discussed above present the perfect opportunity to “custom fill” shelves with just the right product for each individual shopper. Retailers are sitting on more data than they know what to do with – using it in the right way will not only improve sales, but please shoppers.
3. Amazon Dash and the future of brand loyalty
We’re now far-removed from the unrivalled marketing power of the shelf; browsing an online store doesn’t give packaging the same “encourage someone to pick me up” power that a store shelf does, and if the products you order are going to arrive wrapped in a brown box, the branded packaging inside has less of an effect – but the brand itself becomes all the more important.
Differentiating on packaging will continue to be important for products that end up on shelf in the home, but the emphasis will shift to building and retaining loyalty rather than inspiring the initial purchase.
Amazon – a very strong brand in its own right - is well aware its customers have a far stronger relationship with the brands they purchase than they do with it; that’s one of the reasons why it has introduced a new own-label range with a distinct brand identity rather than Amazon-branding them. Who knows – maybe in years to come we’ll see the big four stocking Amazon’s brand ranges too?
Amazon Dash is particularly relevant – seeing as its first iteration was effectively a facilitator for repeat-purchases. It made frequently bought items, like detergent or other essentials, available at the push of a button. Having ascertained that the move did indeed engender loyalty, Amazon has taken Dash a step further. The new version is more versatile, playing right into Amazon’s hands. It can be placed anywhere, linked with other devices and connects directly with an Amazon Fresh account. By doing so, it has effectively closed the loop.
Moving forward, I expect to see more branded delivery packaging (“ship-ready packaging” rather than today’s “shelf-ready packaging”). What we’re seeing now is private label brands preparing their products for an audience who will order it on the strength of the brand name. Customers expect it to turn up looking appropriately impressive, undamaged and without excessive packaging which needs disposing of, creating waste.
As online shopping continues to grow, brands face a real challenge. The internet will continue to vie with bricks and mortar. To survive, both brands and retailers will continue to grapple with the now-familiar conundrum of how to remain relevant across both platforms.
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