With touchless, contactless, voice-activated technologies in play, retail business models are on the precipice of another major digital disruption
A mystical ballplayer once famously said, “if you build it, they will come.” But retailers expecting that to be the case today may as well be living in their own little Field of Dreams.
In the Age of the Customer, shoppers set their own terms. It’s no longer enough for retailers to build the glitziest downtown stores or the snazziest online portals. Consumers know they have a world of options at their fingertips every time they open a web browser. And they flex their muscle by patronizing retailers that bring them superior experiences while turning their backs on those who do not.
We know the success stories – as well as the failures. Online sites from (A)mazon to (Z)appos have thrived by providing hard-to-beat customer service and lightning-fast delivery times. Meantime, brick-and-mortar retailers from (Z) Gallerie to (A)scena Retail (Lane Bryant, Ann Taylor) have gone bust because of an inability to adapt to the requirements of operating in an e-commerce world.
The COVID-19 pandemic did not help. Indeed, it hastened the demise of many teetering physical retailers who, despite having online presences, still depended on a certain level of foot traffic to survive.
“In a world where the population has been told to stay-at-home, wear masks and avoid physical contact, the idea of going out shopping for fun seems perverse,” writes Futurist Sean Culey in a P3 Logistics Parks blog. “Shopping has become a necessity that people try to avoid rather than embrace. Many clothing retailers have had to close their changing rooms, removing the 'try before you buy' benefit that buying apparel from a physical store had over online retailers.”
For those retailers able to weather years of digital transformation and a historically devastating global health crisis, hope lies ahead in adjusting to the fact that the industry is about to undergo even more change.
And you can thank Amazon for some of it. Not quite content with having us all shop from our computers and smartphones, it has started pitching an entirely new way to buy and pay for products. One where the consumer didn’t even need to go online. One where they simply said out loud what they needed, and it arrived hours later – via Amazon, of course. Which helps understand why the e-commerce giant invested so much into developing the Alexa digital assistant and its speech and voice recognition capability.
For several years, Amazon Pay executives have been touting the idea that modern retail is about eliminating consumer inconvenience and replacing it with seamless and enjoyable end-to-end experiences. They believe touchless, contactless, voice-activated technologies will play a critical role in bringing that vision to reality.
Whereas today, one might use apps on some connected device to select and pay for items from specific web portals, tomorrow they might just whisper what they want to do and an Internet of Things (IoT) in your ear or on your person just makes it happen. Imagine it. You’re walking down a street. Say a few words. And within minutes or just a few hours a product you had in mind is paid for and on its way to your doorstep. You never had to look at or touch a thing.
Amazon, obviously, would love to have its voice technology at the center of such innovation. But other technologies such as Google Assistant are competing for a piece of what could be a lucrative market for embedding voice-activated technology into the buying journey.
Despite such innovation, nobody truly believes physical shopping will completely die on the vine. But the brick-and-mortar store of the future will be radically transformed by technology. Again, Amazon has been an instigator for much of this change. A few years ago, it launched a string of Amazon Go physical stores in select metropolitan areas. Unlike most traditional stores, there are no registers or cashiers in these shops. Instead, you have an app on an IoS device that is recognized the moment you step inside. As you place items in your cart, the app takes note. And on your way out, everything is scanned, tabulated, and charged to your digital wallet in what Amazon calls a “Just Walk Out” experience.
Amazon has also been testing a biometric scanning device called Amazon One in some Amazon Go locations that lets shoppers pay for goods by waving their hands over scanners. Whereas this might have been balked at pre-COVID, Culey notes the increased aversion to handling cash or touching number pads suggests people might be more open to paying for items in this manner. He says biometric payment systems are already well established in places such as China, where systems such as 'Smile to Pay' allow you to purchase and pay for goods through facial recognition. Culey says such biometric technology could eventually be used anywhere people buy things, including fast-food restaurants, cinemas and drive-throughs.
“The days of (getting in line) to pay for goods and fumbling around for change will rapidly become a thing of the past,” he says. “Soon, your face or your hand will be your own debit card – something you’re unlikely to accidentally lose or leave at home.”
All of that said, there is one major dependency that will have to be addressed for this vision to eventually become reality: delivering goods to homes and businesses even faster and more efficiently than today.
Transporting items from Point A to Point B is an expensive affair in the best of times. It becomes incredibly expensive if you’re pushed to do it within 24 hours, and few companies have the wherewithal to do so. At present, Culey says e-retailers such as Amazon are controlling costs by automating warehouses and hiring gig workers who are paid for what they deliver but do not (yet) receive health, vacation, or retirement benefits. The long-term plan for many of these companies, Culey says, is to automate the “last mile” even more by using emerging technologies such as airborne drones and small road robots.
The major bottleneck to this technology has been safety legislation. But Culey predicts these obstacles will begin to subside as the technology gets more refined. And “again, COVID has helped shift people’s opinions on drones due to the need to support a more home-based consumer base and provide non-biological method(s) of delivery.”
So, it is apparent that retail business models are on the precipice of another major digital disruption. Much of it is driven by the continuing need to deliver faster, better, and more personalized service to customers, Culey says. But a large part just has to do with the desire to continually create cohesive end-to-end retail journeys spanning whatever physical locations remain in existence as well as every digital touchpoint.
The Field of Dreams for retailers will no longer be something you build, or a place you go, but an overall experience driven by a plethora of emerging automated technologies.
Note: This article is an adaptation of a blog post written and published on behalf of P3 by futurologist Sean Culey.
Get social with us!