AI paves the way, The future of retail over the next 5 yearsBY Australian Retailers Association
The digital economy has changed the way retailers interact with consumers. As technology has become more portable, it has also weaved its way into our day-to-day lives—from supermarkets predicting and delivering the groceries we need, to a fully integrated concierge banking service.
All this change comes down to power dynamics shifting away from brands to consumers. Australian consumers want greater convenience, more choice, and a greater social connection. With consumer expectations evolving and technology at our fingertips, what does the future of retail hold. Australia is in the midst of a retail apocalypse that has devoured iconic brands like Dick Smith, Darrell Lea, and Angus & Robertson. The digital economy has changed the way retailers interact with consumers. As technology has become more portable, it has also weaved its way into our day-to-day lives—from supermarkets predicting and delivering the groceries we need, to a fully integrated concierge banking service.
All this change comes down to power dynamics shifting away from brands to consumers. Australian consumers want greater convenience, more choice, and a greater social connection. With consumer expectations evolving and technology at our fingertips, what does the future of retail hold?
E-commerce emerged in the mid-90s and was thought to solve the challenges of traditional in-store experiences such as time, efficiency, customer service, and knowing if a product is in-stock. But aside from Amazon, eBay and Netflix, which have found success at the scale we initially imagined, the majority of e-commerce platforms are failing—with the retail conversion rate less than 10% globally across smartphones, desktops, and tablets.
Websites are built around an inherently unauthentic mechanism—a series of static pages consumers are forced to trawl through to find what they’re after. Often, they can’t find what they’re looking for and have to call the organisation in question.
Rather than investing more money into a broken model (websites and apps), retailers should and must move on to the channel that consumers prefer: messaging.
Most interactions with brands will become conversational
Report after report has shown consumers of all ages prefer to text or instant message than call and self-serve online rather than talk to a call centre agent. Consumers want to connect with brands the same way they talk with friends and family.
Imagine texting a brand to ask for a recommendation on running shoes and having curated options sent to you based on your preferences and needs. You can ask questions and complete purchases without ever having to download an app or navigate to a website. This is a reality for brands that we work with such as US-based home improvement supplier The Home Depot and Harvey Norman.
Tech giants, including Google, Apple and Facebook have also all heavily invested in conversational commerce--enabling brands to connect with their consumers via Google RCS Business Messaging, Apple Business Chat, Facebook Messenger, and WhatsApp. The main difference here is that messaging occurs on the consumer’s terms and through the channels and devices they prefer.
Conversations will combine AI and human intelligence
Consumers want to message, it’s the most natural and effortless way for them to communicate with retailers. However, to handle the scale of messaging that we’re talking about, while providing a personalised experience for consumers, will not be possible without automation.
The key to successful automation is a blend of human and artificial intelligence that allows for a personalised brand experience. Bots and AI are used to assist with low-value, repetitive conversations, freeing up humans to focus on more complex, higher-value queries.
AI will also help empower the 73,000 contact centre agents in Australia to step into new, high value roles, such as Bot Creator and Bot Manager, and learn new skills.
AI assistants will be in most homes
In Australia, when we currently talk about AI in retail, we’re mainly referring to chat bots and messaging. But in five years, AI-enabled voice assistants will be widespread – at the end of 2017, already 500,000 Australian households owned a smart speaker. Globally, the number of voice assistants in smart homes is tipped to grow to 275 million by 2023.
The majority of retailers will be leveraging in-home AI assistants to better meet consumer needs. Consumers will be able to ask Alexa, Siri, or Google for recommendations on a little black dress for instance and make a purchase through a conversation with their in-home assistant.
Time is the biggest pain point for consumers and mobile messaging along with AI voice assistants provide a much better alternative, where consumers can browse and get help quicker and on their own schedule.
The retail apocalypse will not slow down anytime soon and brands will have to adapt to the next wave of commerce driven by messaging, voice, and AI.
Andrew Cannington is GM, APAC, at LivePerson, a leading provider of conversational commerce solutions. For more information about LivePerson, please visit www.liveperson.com
ABOUT THE AUTHOR
Australian Retailers Association
Founded in 1903, the Australian Retailers Association (ARA) is Australia’s largest retail association representing Australia’s $310 billion sector, which employs more than 1.2 million people. As the retail industry’s peak representative body, the ARA works to ensure retail success by informing, protecting, advocating, educating and saving money for its 7,500 independent and national retail members throughout Australia. For more information, visit www.retail.org.au or call 1300 368 041.