eCommerce, The new dawn of Retail, and the rise of Chatbots
“Retail is dying, the retail industry is on the verge of apocalypse, eCommerce is conquering the world. Malls and Stores will eventually have to close. “
If you have been following the Retail industry for the last couple of years, this was the warning many experts and advisors in the retail industry, and focus of multiple articles.
The Retail Apocalypse
The “Retail Apocalypse” promoters argue that the growth of eCommerce will eventually put traditional Retail to rest. eCommerce is on the rise, as one of the most popular online activities worldwide, with global eCommerce sales reaching 2.3 trillion U.S. dollars in 2017 (a total global retail sales share of 10.2%), and projected to rise to $4.5 trillion by 2021 (a total global retail sales share of 17.5% ).
They argue that the retail industry appears to be going through an existential crisis, many traditional retailers have stopped growing, have been closing traditional brick-and-mortar stores (Macy’s, JCPenney, Staples and Sears Holdings had announced widespread store closing plans last year, The Limited closed all of its remaining stores, luxury retailer Neiman Marcus announced that it is looking at a possible sale of the company after it was forced to drop plans for an IPO.
In addition, according to CNBC, more than 3,000 stores were slated to be closed in 2018 by retailers including Claire’s, Signet Jewelers, Ascena Retail Group, Best Buy. Ralph Lauren announced the closing of its New York’s Fifth Avenue flagship store among others, in a step that came amid considerable upheaval for retailers that rely heavily on physical stores, as shoppers, especially millennials, are making more of their purchase online.
Is this really the case?
On the other hand, the opposing camp argues that the idea of having bricks and mortar is still an important part of businesses, as most companies admit they can’t succeed in retail without stores, with several reports and studies pointing that for every company closing store, there are 2.7 that are opening stores. In addition, it is why one of the only two trillion dollar companies, Amazon, is reportedly planning to open 3,000 Amazon Go stores by 2021.
Although it might seem that, when looking at individual sectors, there are clearly areas with retail that are challenged, overall the retail Industry is healthy, and every industry experiences turnover and change, forcing its companies to adapt their business models to overcome these changes.
What everyone is agreeing upon though …
What both camps do agree upon, is that the rise of eCommerce has been the biggest disruptor to traditional retail in recent years. eCommerce has and will continue to have, a dramatic impact on virtually every aspect of retail. The dramatic share shift from physical stores to digital commerce cannot be ignored, nor the transformative effect of e-commerce on pricing, product availability, and shopping convenience can be underestimated. With more people choosing to shop online, traditional retailers are finding it harder to attract customers to their stores.
Digital First Strategy
With disruption comes change, and what retailers need to do in order to be able to sustain and grow their businesses is to rely on technology tools, introducing technology into the overall consumer experience, as a tool to complement the digital consumer experience with the in-store experience, cleared the way for for the emergence of the “Digital-first Retail” concept, which is the tendency of consumer journeys to be influenced by digital channels, regardless of where the ultimate transaction takes place.
This is why, some of the world’s leading brands, from Apple to Nike to Wal-Mart, are investing money and resources (i.e., people) into creating product content (descriptions, benefits, images, videos, reviews) that serves as the bridge between the online and offline worlds. Rich product content both online and offline (in-store) became a must have for brand manufacturers and retailers looking to increase sales.
And this is also why, eCommerce titan, Amazon, has started investing into brick-and-mortar stores, an area of retail that Amazon originally disrupted, but it’s not about replicating this experience, it’s about trying to move quickly into the new space that is being created, where both the digital and the physical consumers’ experiences complement, rather than contradict, each other in creating an improved retail experience for the consumer, and where traditional retailers are trying to move into in order to sustain.
Retailers need to focus on creating a retail experience, where both the digital and the physical consumers’ experiences complement rather than contradict each other in creating an improved retail experience for the consumer
To make the digital transition, forward-thinking companies have been implementing technologies that allow the branding and product interaction to be intensely customizable and personalized.
Consumers’ journeys to purchase are being constantly and dramatically influenced by digital channels in a variety of locations, from in-store displays, augmented reality-equipped stores that allow the user to experience a product before purchasing, mobile engagement with AI-powered Digital Agents and Chatbots that facilitate product discovery, recommendation and support, QR code based payment solutions that help customers skip long payment queues, Artificial Intelligence, Machine learning, and deep data that helps retailers understand consumers behaviors and needs, Robotics, Sensors, and Cameras, are utilized as well to help optimize in-store economics, design better product offerings, and marketing campaigns.
How do Chatbots fit into that mix?
A Chatbot is a computer program designed to simulate conversation with human users, especially over the Internet, Artificial Intelligence Chatbots are able to identify the user’s intent and answer questions in a conversational human style
Harnessing Conversational Artificial Intelligence, or AI powered Chatbots, retailers will be able to provide consumers with a combined digital, personalized, and instant conversational experience. Available 24/7, during all the steps of the consumer’s journey from discovery and research, to purchase, and later on support. Chatbots are able to provide retail with valuable tools to engage consumers, whether in-store or even before they make the purchase decision and step a foot in the store.
In addition to Customer Engagement, some Conversational AI platforms, such as botique.ai provide data and analytics regarding consumer behaviour, information on brands and products they engage with, customers’ frequently asked questions, and support cases, all of which is valuable insights for brands or retailers to help them understand their consumers, analyze issues in their value chains or consumer journeys, and align products and content to customers’ needs.
Recommendations about specific products, answering consumers’ questions, real-time advice on brands and products, processing orders and purchases, accessing product and inventory updates, in-store availability for purchases and pickups, providing fast and responsive 24/7 customer service. Chatbots are able to engage consumers along the different stages of the consumer journey, and across all digital channels; text, email, in-app, website, etc…
“Chatbots will be an important part of every Retailer’s digital arsenal for the coming change”
Retail is not going away, traditional retail is, the block and mortars, will eventually evolve from the way we know them as a place that drives sales, to a hub where customers learn, engage, and experience brands and products, a place where Sales will not be the main focus, but where both the digital and the physical experiences complement, rather than contradict, each other in creating an improved retail experience for the consumers, in-store customer experience will be the most profitable product retailers will sell in their stores.
