As McKinsey puts it: “retail is under pressure.” Retail is one of the biggest industries at the moment, but it’s also facing a huge risk of loss coming from various sides. It is said by some that the name “Black Friday” (the day after Thanksgiving when all the insanely discounted sales take place in the U.S. and abroad) came to be because it was the only day in the year that stores did not end up “in the red” with numbers and had positive balances at the end of the journey. And what better example about what it can mean for the retail businesses that don’t automate than the stories of the thousands of retailers that have been trampled by the monster that is Amazon?
Before we jump into what Amazon has done for and in retail, it’s important to understand some key statistics that show the way consumer behavior has led to today’s retail standards:
- According to GE Capital Retail Bank, 81% of retail shoppers conduct online research before buying
- Salesforce says that 80% of customers express that the experience a company provides is as important as its products and services, and Digiday backs it up with the statistic that 65% of consumers have cut ties with a brand over a single poor customer service experience.
Since the launch of the world wide web back in 1993 and the accessibility of the internet worldwide (and literally at our hands with mobile devices), people slowly but surely found a quick and easy way to decide where (and even whether to) spend their money way before making a purchase, without even having to leave their homes. This was the beginning of a new way to shop, taking word-of-mouth recommendations to the next level and making way for customer-experience driven sites like Angie’s List and Amazon to really guide the buyer on their customer journey.
In a matter of years, Amazon went from relatively unknown book-purchasing site to widely known and used shopping site for items of all kinds, with thousands of customer reviews to speak for most of its inventory. They introduced the concept of a membership to cover two-day shipping, and now they’ve even branched out into the content and entertainment industries, but that’s for another blog. Amazon has been in the news a lot recently because whether it’s delivery drones (supposedly coming this year), self-driving forklifts, sorting/packing/shipping robots, and just an entire football field of robot merchandise carriers, all of these have positioned Amazon as the leading retail player in the world, putting many local and big players out of business, because no one can really keep up with their level of performance.
Besides all this great technology, there are also plenty of social reasons why retail has shifted so heavily on its head recently. Shopping can sometimes turn into an anxiety-ridden activity for buyers, especially in places where retail workers make commission for selling, because they don’t want to be cornered into making a purchase. At some point, it was widely believed that a buyer needed a gentle nudge from an associate to be convinced to buy the item they weren’t sure about; today, that nudge can come from two places: a review from a fellow buyer, or a chatbot that pops up to ask the buyer if they have questions.
The year-round buying experience also varies, because buyers behave differently depending on what is going on in their environment. The seasonality of shopping is a huge player in the retail landscape, and there’s no better example than Halloween. How many pop-up costume shops do you see come to life from end of September until the beginning of November? The holidays drive consumers to reach into their wallets much deeper and much more frequently than during the other months of the year.
For all of these reasons, the next few years will be critical for retailers who are thinking about investing in technology as a means of survival. In the case of retail, artificial intelligence, machine learning, robotics, etc. are not just about improving their business or customer service, it’s about staying afloat.
Per the Global Artificial Intelligence Study, retail (next to healthcare and automotive) could see the most immediate benefits of Artificial Intelligence, with over 300 AI use cases like anticipating trends, personalizing products, etc. With all of the customer data available so far, plus the growing amount of information obtained daily through social media, this is a golden opportunity for retailers to go down the path of innovation – before it’s too late.
For those thinking of embarking on this journey, we have prepared an infographic that not only shows you why the journey to automation of retail is necessary, but also how you can make it time effective with Lagash. We specialize in developing custom solutions for companies across all industries, and in retail there’s no time to waste. Whether you’re looking into automation as a trend or for your own personal needs, we have a proven track record that focuses on delivering the best experience for your employees as well as the end-users, and we have a team of experts ready to answer your questions. Contact us for more information and we’ll help you get on the road to automation.