It is becoming increasingly important to combine the physical and digital realms, especially in the retail industry, where this interaction has been making or braking billion dollar stallwart organisations who held major share in the 20th century.
One of the biggest challengers in this space is Amazon. And after the global juggernaut recently announced the trial of its bricks and mortar store Amazon Go in Seattle, competitors are becoming more threatened than ever before.
In order to keep up with the challenges set by Amazon when it enters the Australian market in 2017, the retail industry will need to revolutionise its processes and embrace technological change.
Tech Exec. explores the five technologies which could play a key factor if retailers are to remain competitive as Amazon rolls out their introduction to the Australian market in the upcoming year:
In a nutshell, Amazon Go is a grocery store shaped entirely around the latest technology.
Beacon technology uses sensors to communicate messages to smartphones, primarily through the use of an app. This allows retailers to digitally connect with customers in the physical store.
Amazon recently explained in a press release that: “Our ‘Just Walk Out’ technology automatically detects when products are taken from or returned to the shelves and keeps track of them in a virtual cart.”
Whilst advanced sensor technologies are likely out of reach for smaller retail stores, beacon technology is the first step towards this end goal.
Creating an app and providing offers and promotions to customers who are within the vicinity of the store creates a rewarding online experience that encourages loyalty.
Sensor-based technologies are the foundations of Internet of Things (IoT) products. IoT has illustrated how transformation can be derived from connecting devices. This has streamlined many services, and Amazon Go is no different.
Using computer vision, sensor fusion and deep learning, Amazon is able collate an array of data that can be used to further understand customers and predict their needs.
By downloading the Amazon Go app, customers can shop around the fresh food in store and any product they select from the shelves are automatically added to their virtual shopping trolley.
The app can track if a customer puts an item back, and at the end of their shopping trip it adds up the basket and charges the designated account.
Whilst beacon technologies can prove difficult to maintain in stores that do not provide public internet access, IoT is a more advanced tracking method for customers. In the case of Amazon Go, consumers have a seamless, simplified experience which only requires an Amazon account and the Amazon Go app.
Big data is a crucial asset that businesses can utilise to build customer profiles. From drawing on information about their past interactions with the company, it is possible to transform the customer’s journey.
Many large organisations operate under data silos which restrict information from being shared. If businesses are to recognise the trends and patterns of their customers, it is imperative that this data is unified and available for different departments to analyse.
Looking at Amazon Go, the use of the app in store will enable Amazon to collect information about what the customer is buying, how often, and predict what they might want in the future.
Other online shopping services have illustrated this by suggesting the customer adds items they have previously bought to their cart. To compete with the nimble behaviour of Amazon Go, organisations will need to learn how to activate their data at a speed never experienced before.
Artificial intelligence (AI) has begun to prove its applicability to multiple industries.
Building off the sensory data, AI technology can go as far as identifying where customers are looking within Amazon Go stores.
This is not only useful when it comes to advertising certain products and offering deals through beacon technology, but this also allows the company to track the customer’s route through the store and understand their behaviour.
Predicting purchasing trends, creating more detailed reports for shareholders and optimising the layout of the store are just a few examples of the many benefits AI can provide.
After the customer has exited the store, an email is automatically sent to them outlining the price of their purchased products. As a result, the store can create a link between customers and products using their mobile Wi-Fi address.
Euclid Analytics’ CEO, Brent Franson, explained this innovation and its issues to Wired:
“Solving the problem of attaching the products to the person as they leave the store is going to require something new—or something we’re not aware of today. Tying the two together at 100 percent accuracy, that’s a problem that’s hard to solve.”
Advanced technology such as this does not come without its downfalls. Failure in accuracy will either facilitate theft from Amazon stores or overcharge customers for products they did not purchase.
Innovative payment systems have become evident through organisations such as Uber providing behind-the-scenes payment experiences.
Amazon recently announced that this was a crucial feature of their new store.
“When you’re done shopping, you can just leave the store. Shortly after, we’ll charge your Amazon account and send you a receipt.”
By cutting out queueing times at checkouts, Amazon aims to provide customers with a seamless shopping experience that will improve customer satisfaction.
Amazon’s new remote payment methods are competing with e-commerce payment giant, PayPal, whose digital and mobile payments are becoming increasingly available at 18,000 bricks and mortar stores in the United States.
The retail sector can learn a lot from these innovations which aim to simplify the repetitive processes customers go through and improve the customer experience.
Amazon is going to do to the high-street what it did to the web at the turn of the 21st century. Add some much needed spark and get the masses engaged.
Sam Henderson, CEO and Senior Financial Advisor at Henderson Maxwell, believes Amazon Go will have a significant impact on the Australian retail sector. Henderson told 9Now:
“I think this is going to revolutionise the way we shop. It’s going to be a major disrupter to the other retailers in the sector.”
“The major supermarkets are going to be shaking in their boots. They’re already putting together combat teams to discuss how they can go about combatting the influence this is going to have on the retail market.”
Whether it’s as small as the introduction of beacon technology to connect with the customer on a digital level, or as advanced as introducing AI to revolutionise their store layout, organisations should begin to embrace technology in 2017.
Only by following Amazon’s lead will they improve customer satisfaction and keep up with the digital age.