The future of retail is automated
What does the future hold for online commerce? For several years now there has been very little innovation in the industry. A level of maturity has been reached online and it is no secret what makes an online store great. Many of the current challenges which exist for online retailers today are business problems, such as logistics and channel management. But things are set to change again. Everyday network enabled devices, labelled as “the Internet of Things” are going to give us the chance to automate. This could spell an end to many of the mundane tasks which we perform on a regular basis. It will happen by connecting us with retailers’ applications which can carry out auto-order replenishments. It may sound like it’s a long way off, but this future could be closer than you might expect. Prepare for programmatic commerce.
Commerce 2020
Last week I attended the Commerce 2020 event, hosted by the London based ecommerce consultancy, Salmon. There was a very interesting agenda, and the idea of programmatic commerce was presented. This video gives a quick overview of the concept:
Delivering frictionless customer service
Is this the natural progression of retail and technology? Making life easy and connecting services in this way makes sense. The driving force will be customer experience. Having a frictionless service which means not spending time doing menial tasks will benefit everyone. There is one commodity which no amount of money can buy, and that is time. By pre-selecting preferences and trusting the provider to perform a good service, a trip to the grocery store could become a thing of the past. No matter how much people try to convince themselves otherwise, shopping for essentials is not fun! Convenience when it suits the end user is a very attractive proposal and programmatic commerce will deliver this.
What will drive change?
At the backend, there will be a huge benefit to retailers and manufacturers. Knowing where and when demand will come from will make logistics, delivery and fulfilment much more efficient. The costs incurred by online retailers in delivering items is today’s biggest overhead. Any opportunity to save money through optimisation will be welcomed in such a competitive market. It will be interesting to see which factor will drive the most change. Does the aim to improve customer experience lead to a reduction in business costs? Or is an improved customer outcome just a result of an attempt to save money? I like to think that companies are now focusing on a “customer first” strategy.
The human to computer interface
There are two things which will underpin how a programmatic commerce future will evolve successfully. The first is data. Understanding what customers want, when they want it and building up millions of profiles, will require storage and analysis at scale. Many retailers are already starting to do this. Loyalty card programs have enabled large chains to understand customer behaviour in a much more intelligent way. Analysing the huge amounts of data effectively will become vital. The second is the rise of the digital assistant. Apple’s Siri, Microsoft’s Cortana and IBM’s Watson are all aiming for dominance in this market. Being able to understand sentiment and intent is the key here. There is still work to be done in refining the technology and implementation, the experience at present is far from ideal. However, the pace of improvement and the race to deliver the best service (which will could potentially lead to the highest adoption) means mass adoption is not far away. Despite some sceptical warnings around computer AI, handing off mundane tasks to computers is very exciting.
How far off is a programmatic future?
The technology to deliver a programmatic commerce solution is already in place. Most large retailers have a large amount of customer data but the real shift will be in customer behaviour. Are we ready to trust some of our decisions to machines? Once a compelling use case has been proved and IoT devices are more prevalent then I have no doubt this will become more common. The sector which is best able to deliver a service like this is grocery and customer packaged goods. There is already huge competition and a desire to offer something new with increasing efficiency. A typical grocery purchase is usually not very considered and regular choices are common. There is a huge risk of lock-out for brands. Once you have made your decision there is much less chance of changing and the lost customer will probably never return. Retail and commerce trends are always difficult to predict. Within 3 years I can imagine the largest grocers looking to win back some market share previously lost to low-cost competition, with this sort of technology.
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