For the last few years, regardless of the industry we look at, the notion that we moved to the Age of the Consumer, is indisputable. Nowhere has the disruption been more evident than in retailing, with consumers empowered by online tools and mobile devices to shop in any way they want. As we know, retailers have been adapting to this sea-change for many years.<\/p>\n
Whilst this change was enabled by ubiquitous connectivity, we\u2019re now starting to see another change to the landscape that is enabled by something else \u2013 that of real-time data coupled with artificial intelligence (AI) and automation. These technologies are not new – banks have used high-frequency trading systems for years to buy and sell shares at optimum prices in milliseconds, for example – but they have not been available at low-cost to consumers until very recently. Many retailers have been hugely successful in harnessing data to understand customers and build new models of value exchange using loyalty programmes. But arguably, these approaches still place the balance of power in the hands of the retailer, something that consumers are increasingly resisting.<\/p>\n
How are they resisting? Apart from the obvious signs of consumers holding more than one loyalty card<\/a>[1], likely for the same category, we are seeing consumers use technology to gatekeep from those who want to promote and sell. It started years ago with spam filters on email and more recently with adblockers, with research<\/a>[2] showing that up to 40% of mobile users now install\u00a0them on their browsers, cutting off another channel of communication for retailers.<\/p>\n Of course, you can still promote to consumers if you have them use your app but consumers tend not to use apps for shopping and the trend is moving towards virtual personal assistants like Siri, Alexa and Cortana being the new apps that broker interactions with services.\u00a0Is it so far-fetched to see consumers instruct a bot to shield them from irrelevant promos from retailers? Furthermore, is there any point in promoting to people when it\u2019s the bots that have the power? Imagine if your retail bot chats directly to consumers\u2019 personal bots, and not consumers themselves, most of the time?<\/p>\n Message me about clothes that my favourite celebs are posting on Instagram, that are discounted by more than 40%.<\/em><\/strong><\/p>\n Instead of fearing another cycle of race-to-the-bottom discounting, consider whether this change opens new opportunities to aggregate customer preferences in a different way. Perhaps it can help to define new service models, deliver a better-targeted product mix and optimise promotions with personalised pricing? Once customers have their preferences defined by their assistants, there will be new insights that can be used to personalise experiences, which can be an effective response to discounting.<\/p>\n Of course, not all consumers select retailers solely on features and price \u2013 even if they do, inspirational experience still counts and will be more important as transactional processes become friction-free. Importantly, retailers will need to differentiate in different ways if the purchase process tends to zero effort as assistants become more common. For this reason, the disruption brought by personal assistants is still to come. If Alexa or Cortana can search for the product that\u2019s best for a customer, across all retailers, the direct interaction with the retailer at point-of-purchase becomes obsolete. And as a retailer, you need to start segmenting your market by bot preferences, which may not necessarily be defined by actual human behaviours but by AI-created needs.<\/p>\n When we\u2019re able to a build wider ecosystem that is coupled with artificial intelligence, a more transformative customer experience can quickly be realised. In the not-too-distant future, the personal assistants will be trusted to make decisions for customers \u2013 and inform retailers to auto-fulfil when the moment is right \u2013 call it machine-buying<\/em>, if you like.<\/p>\n Send me five outfit choices that I\u2019ll like, by next Wednesday, for a party I\u2019m going to at the end of the month.<\/em><\/strong><\/p>\nMargin erosion at an industrial scale isn\u2019t inevitable<\/h2>\n
Engage your customers\u2019 assistants to redefine convenience<\/h2>\n