Digital Transformation

Innovation Driven Retail

Innovation Driven Retail

It has been over twenty years since retailers and manufacturers started selling their products online. We have gone through the periods of explosive growth and rapid declines, aka dot com bust. Regardless of the times and business models, technologies which drive consumer purchasing behavior continue to develop. As the technology and platforms continue to evolve and multiply, it is becoming increasingly difficult to stay on top of the emerging trends. It has become absolutely necessary for retailers to invest into innovation in order to deliver a continuously improving customer experience and have continued growth of the bottom line. This article goes into a few important aspects of emerging consumer technologies and marketing approaches.

From Buy Now to Context Sensitive Shopping


Online shopping used to be primarily consumer demand driven, impulsive purchasing has been limited to an in person experience at physical stores. A typical customer journey involves a product or service need, generated by a consumer’s demand. The crux of all marketing and merchandising efforts is to make this product or service available for purchase precisely when the customer wants it. The challenge is knowing when that moment occurs. With the advent of big data and marketing automation, we are now able to collect consumer behavior data and then use that data to display relevant and contextual information to the consumer in order to help them make a purchasing decision at the right time. The advances in technology now allow this to be done in an aggregated way, by targeting potential customers based on their interests, behavioral and demographic information. This is accomplished through marketing platforms like Oracle’s and Salesforce’s Marketing Clouds, Krux, etc.

What’s even more exciting is that we can now target individual people in what’s called 1:1 (one to one) marketing through a new breed of marketing technology called Consumer Data Platforms (CDP). A CDP is an information hub which connects to all channels where your consumer information may be captured and then merges that into unique consumer profiles which can then be easily activated through various marketing campaigns. Unlike a traditional CRM, it is not concerned with tracking customer’s transactions and interactions, but rather deals with the collection of information about them at much larger scale, think thousands of data points. Some of the bigger players in this field are Lytics, AgilOne and Blueconic.

Imagine as a consumer, while visiting a local car dealership, you provided them with your name and email. Later on, while browsing your favorite social network, you see an ad for a car you were looking for, then receive a personalized email which details the advantages of the model you like, and finally you receive a letter with a pre-approved loan. This is all possible today with context specific, 1:1 and omnichannel marketing. We are able to reach consumers where and when it is most relevant to them.

Is AI the Ultimate Answer?


Technology has also been steadily evolving in the area of product recommendations and personalization. In order to achieve the context specific experience described above, e-commerce and marketing platforms need to be able to analyze huge amounts of data and determine the best set of content or products to recommend at any given time. In recent years, a lot of new technologies have emerged claiming to be using Artificial Intelligence (AI) in order to achieve ultimate results. Let’s take a look at what that means. The term AI often refers to any type of logic which is executed in a manner similar to how a human would do it. The actual technology is based on neural network concept, which applies Machine Learning to large amounts of data. Underneath all that terminology are algorithms which dictate how decisions are being made based on the information provided. In simplified terms, this is akin to using analytics and predicting future outcome based on historical data, except this time machines are doing the prediction. Unlike humans an AI based system can take thousands of data points into account. These would include such detail as the time of day a customer may look at news site, what kind of news are they reading, what type of music do the like and so on. All this information is then fed into the machine learning algorithms in order provide the recommendation necessary in order to engage customers in a one to one fashion. This technology is now being added to a lot of marketing platforms, including DMPs and CDPs mentioned above. Ultimately, it will be computers that will decide what customers want and when they should be engaged in order to maximize the retailer’s’ marketing efforts.

New Concepts in Retail

It is clear that innovation is the key to staying ahead of the competition. AI and predictive analytics are only part of the recent inflow of new technologies into this industries. There are also lots of other new ideas and concepts which are being tested and even deployed on small scale that may have seemed like science fiction only a few years ago.

One such technology, which has actually been around for a few years, is digital self-service. Not so long ago, if you, as a customer, had a question about your order or wanted to return it, you had an option of calling customer service or writing an email. Both of these approached involved human input on the retailer side which often requires keeping a sufficient number of service or support representative trained and familiar with your product or service. What if you could automate this process and allow an intelligent platform to do this work instead of a human. This is now possible with companies like Parature or even known players in customer service field like Desk from Salesforce and Happyfox. Have an automated service portal allows a retailer to offer true 24/7 support with instant response and up-sell abilities. With advent of AI, the next logical step would be to integrate self-service concept into live chat applications.


Another interesting technology which is making its way into retail is Augmented Reality or AR for short. The basic premise, if you are not familiar with this tech, is that it allows you to place virtual objects into real space through the use of video screen or sometimes special goggles. There has been quite a few applications where this technology has been made available to public, like Shiseido Makeup Mirror, which allows the user, while at a kiosk setup in a retail outlet, to look a screen which live streams a picture of them take through a camera, while applying different make up to the image on the screen. Another interesting approach to AR technology has been done by Ikea through their AR Catalog App. Here, you could take a photo of your living room and place a virtual couch or a table to see how it would look if it were actually there. This can also be done in real-time as a true AR experience by moving your iPad around the room and seeing through the camera the actual physical layout plus the virtual items you have placed there. This technology is not limited to large items and room layout efforts, it is also starting to find its way into everyday shopping. IBM Shopping App can process images of products it is capturing through its camera as you walk through an aisle in the supermarket and provide you with real-time information on these products, which could be things like whether or not this particular brand fits your taste profile, or if it’s priced lower somewhere else, or if there’s a coupon. Kids looking at cereal boxes may see character jumping from one box to another, wouldn’t you want to buy this instead of an old plain ‘static’ box of cereal?

What to Look for in the Future

ECommerce is one of the largest industries which relies heavily on technology supporting it. With constant innovation driven by the desire to continuously increase sales and customer reach, we should expect an inflow of new ideas at an ever increasing rate. As technologies like AR and VR become more acceptable and accessible to the public as well as technologically and financially feasible to implement, I would expect to see new vendors to flood the market with new products which should play well with existing platforms. At the same time, AI will become smarter and smarter, which means it will eventually be able to fully substitute functions which involve human interaction like customer service. While this all may sound pretty ominous from a customer’s perspective, ultimately I believe this would benefit everyone by creating efficiencies in marketing strategies which in turn would focus more on delivering relevant information instead of trying to push things to consumers in volume. Also, just like in other industries, we should expect to see major disruptors like Uber or AirBnB change the way we do retail.

Michael Eydman is a digital transformation consultant working with large to medium sized organizations, helping them increase efficiency within existing processes, adapt formal methodologies and introduce innovation ideas to help them grow.]]>