I was asked by UKFast to join Jonathan Bowers for another one of his UKFast Round Tables. I’ve done a couple of these before and I like to jot a few notes down to crystallise my thinking around the subject. I’ve turned these into a blog post to share with you.
The Round Table this time though was to be a live webinar streamed from their stand at the eCommerce Show North to the multitude of their followers. That’s right… me on a live show. What could possibly go wrong?
Anyway, here are my scribblings on what I have I seen as ground-breaking changes in ecommerce this year.
On 11th September this year, Amazon’s patent for one-click purchasing expired.
This subsequently meant that for retailers using tokenization technology to store customers card details, customers will no longer be required to enter in their three-digit AVS/CV2 number in order to be able to make a purchase online without paying an associated royalty to Amazon.
We are already seeing the implementation of this technology find its way into the ecommerce landscape with platforms such as Magento that has implemented the one-click payment into its Braintree Payment Gateway. This can already be implemented but it will be bundled into the next Magento release.
There may not be that much difference considering the workarounds we’ve seen such as payment cards being stored in iCloud Keychains which then evolved into Apple Pay which was subsequently integrated into the Safari browser. Ironically enough, Apple was one of the most high-profile businesses that licensed 1-click off Amazon for its iTunes store.
Even more ironically, Amazon Payments is trailing behind Apple Pay in market share across the web.
However, Amazon still continues to astonish me in its commitment to innovating retail and customer experiences. I’m not sold on Amazon Dash but being a Manchester city centre dweller and not wanting to wrestle the crowds in the Arndale, I’m a massive fan of Pantry and Now. That said if Market Street’s Aldi adopted an Amazon Go style shopping experience, those frantic checkouts would be consigned to the history books.
The online shopping interface is going to be further mixed up this year with Amazon’s deeper commitment to Alexa’s ubiquity in as many homes (places) as possible. Rumour has it that the Echo Dot sells only at break-even due to Amazon’s perspective that supplying the channel is more important than making profit on the devices.
The Alexa Skills Store looks to bridge the gap and introduce voice-enabled commerce to wider businesses outside of the Amazon marketplace. For example, Ocado has launched a Skill that allows customers to add items to their Ocado shopping basket for their next order although booking the delivery and checking out still requires the use of the website.
Besides simply adding items to a shopping basket, the voice interface there is a greater opportunity to deliver a more personalised customer service in online retail. Especially if you combine this with one of the many AI chatbot services on the market - or even with an actual sales person connected on the other end ready to respond to issues such as delivery times. We are partners with Intercom and currently in discussions with them about exposing their Educate knowledge base API so that we can route it through Alexa as a customer service skill which we intend to offer to our clients.
Immediacy and omni-channel experiences
I was never a fan of online shopping. Yep, I just said that. My biggest problem is that I’m a massive impulse buyer and when I want something, I want it now. I never wanted to wait around 2 to 3 or even 5 days before my purchase was delivered. And woe betide if I got a notification saying they’d “apparently” tried to deliver but I wasn’t in even when I’d been hovering around the front door the entire morning it was supposed to arrive.
Fast forward to now and after a logistical uberization, I can now receive my purchase exactly when and where I want. Retailers such as Argos have done a phenomenal job in creating a seamless customer shopping experience that allows a myriad of delivery options beyond click and collect to items that are shipped from stores rather than the warehouse. On top of this, Amazon Locker have been rolling out across, well everywhere. Do you see those big yellow lockers in petrol stations and other public locations? You can pick up your Amazon order out of them.
You can probably tell, Amazon is my best friend for my impulsive buying.
We see Prime Now as Amazon’s next level of behaviour modification, and a way in which they are (again) resetting the hurdle for eCommerce delivery expectations.
And I’m not the only one - same day delivery is the favourite option for 61% of Gen Z shoppers who are willing to pay a premium for this service as well as being able to dictate specific timeslots at a premium price.
So why do 1 in 5 UK retailers still not offer next day delivery?
There has been a backlash on some of these innovative shopping experiences though. Fast Company reported on ex-Googlers Paul McDonald and Ashwath Rajan launching their Bodega, which is a kind of mini indoors Amazon Locker pre-filled with everyday essentials from nappies to sugar. Albeit the inventories of each locker are machine-learned to pre-empt what specific locations will need the most.
Unfortunately, and even more so in the name, should this concept take off it would put out of business many of the Latino-owned family-run stores that have been a cornerstone of American urban society for many years.
In the UK, the British Retail Consortium cited in their Retail 2020 report that there could be almost 1,000,000 fewer jobs by the year 2025. Of course there are many factors that influence this such as last year’s introduction of the National Living Wage. But undoubtedly, the growing appetite for on-demand convenience that modern ecommerce delivers will increase the rate of reduction of roles. This is such as the combined effect of a different labour-technology cost equation and shifting physical-digital space investments reduce companies human labour requirements.
However, it’s not all gloomy. Whilst there may end up being fewer jobs, the positive outcome for the ones still in roles will be felt by way of higher salaries, better productivity, wider knowledge and a higher impetus for improving the quality and contribution to the overall retail landscape.
Obligatory future-gaze klaxon
I’m not going to go all doolally on drone-delivery, and thank god Minority Report advertising still hasn’t raised its ugly and over-lyrically-waxed head no matter how many times a futurist throws it out there in the vain hope that it will come to pass. Instead, what excites me is something that is already happening and will surely grow stronger over the coming years to the betterment of not only retail but hopefully society and the environment in general.
It’s that of artificial intelligence and machine learning.
We’re already seeing data-driven and machine-learned personalisation and smarter searching via technologies such as those of our partners Nosto and Klevu which provide a much richer customer experience. However, if we can apply this data collection and intelligence upstream into the supply chain then we will see huge levels of efficiencies which, I hope, will eventually have impacts on pricing.
Yet more importantly, I hope that this intelligence will provide the ability to create a laser-focussed JIT (just-in-time) strategy that sends waves up and down the supply chain. A strategy that reduces the waste of over-production, and a logistic efficiency on a microscale that puts resource and product only exactly where it is desired, ultimately cleaving chunks off our retail carbon footprints. Who’d have thought ecommerce could save the planet?