How technology is redefining the way we shop

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2016 was one hell of a year. We witnessed Boaty McBoatface, the launch of Pokemon Go, Leonardo Di Caprio winning his first Oscar, the break-up of The Great British Bake-Off, Toblerone’s changed shape, Brexit… I could go on…

 

Whilst 2016 made us feel a spectrum of emotions, it has been a significant and exciting year for the marketing world, introducing a number of technologies that are set to redefine the way we shop, understand and communicate with our favourite brands.

 

1. The launch of ‘Message commerce’

 

‘Message commerce’ encompasses the integration of chatbot technologies onto social media messaging platforms to provide an additional path to purchase for consumers. Whilst message commerce hasn’t yet taken off in the mainstream, we have seen new developments over the past 12 months. The numbers say it all, Facebook moved into message commerce in early July 2016, and already has 11,000 chatbots consumers can interact with.

 

The likes of the Guardian and Starbucks have launched chatbots on platforms Facebook and WhatsApp. Consumers are also able to order a Domino’s pizza via Facebook. This concept was taken even further in October last year, when Facebook announced the trial of food delivery in the US via company Facebook pages. Chatbots like these, will define the future of messaging commerce, spurred on by AI and machine learning

 

2. Mobile-only brands

 

According to Deloitte study: ‘There is no place like phone’, collectively, UK citizens look at their smartphone over a billion times a day, with four out of five adults now owning one. Therefore, it’s no surprise that 2016 saw the launch of new mobile-only brands such as Atom, Pokémon Go, Uber and Babylon Health.

 

However, the longevity and usability of mobile-only brands should still be questioned. Atom Bank’s annual report showed a net loss of £22.5m and low reviews on the App Store and Google Play, and whilst Pokémon Go enjoyed a 74-day long reign on Apple’s iOS store its sales dipped significantly as the craze faded. This demonstrates a need for further development of pure-play brands this year.

 

3. Battle of delivery services

 

Fulfilment was a huge topic of conversation last year, with brands giving consumers more options in how they receive purchases.

 

Amazon dominated this category with the launch of its one-hour delivery service, its Dash button (allows consumers to restock goods via the Amazon app with a single press), and its move into groceries through a partnership with Morrisons. Meanwhile, Sainsbury’s has been pushing click-and-collect by creating hundreds of new collection points, as well as redefining the purpose of a supermarket following its acquisition with Argos and the launch of its digital concessions in-store.

 

Delivery service competition, however, is not solely reserved for grocery, with 2016 also seeing a surge in on-demand delivery services such as UberEats, Deliveroo, Jinn and Henchman.

 

As fulfilment options continue to increase, we can expect to see consumer demands for greater levels of flexibility, placing a growing emphasis on omni-channel business evolution.

 

4. AR and VR hit the mainstream

 

The success of Pokémon Go opened up marketers to the possibilities of VR and AR, viewing it less of a gimmick and more of an accepted reality. Last year saw a number of brands experiment with the tech, some of it good, some of it bad.

 

Game trialled the use of AR in its store windows to celebrate the launch of Halo 5: Guardians, allowing customers to stand alongside popular characters, resulting in a well-rounded, immersive and interactive experience.

 

However, Italian restaurant chain Carluccio’s introduced VR dining to transport the customer to Sicily to feel as if they are sitting by the sea, proving more of a gimmick than adding tangible value to diners’ experiences.

 

As the technology moves out of its embryonic stages we can expect to see a wider application of the tech to diversify products and services, as well as improve the sophistication of brand communication and storytelling abilities.

 


 

Whilst the launch of new and shiny technologies, that signal alternative paths to purchase, shake up the market and excite marketers constantly looking to innovate, it can be easy to forget about the importance of integrated customer experiences. Following an analysis of the best and worst performing retailers this Christmas, those who performed best were those who implemented effective omni-channel strategies and diverse fulfilment options.

 

John Lewis, for instance, over the six weeks to 31 December, said online accounted for 40% of total sales, while sales from mobile devices were up 80% and now account for 37% of all traffic to the John Lewis website. In comparison, shop sales were up just 0.8%, with most consumers preferring the convenience of online or click-and-collect.

 

Marks & Spencer falls into a similar category, with more than 30% of the retailer’s website traffic originating from its mobile phone app, and 62% of its online sales picked up in store.

 

Where 2016 saw brands look to increase the usability of mobile apps and sites in a bid to attract the digital-only shopper, 2017 will look to join up the dots of consumer purchasing journeys to win the multi-channel consumer, who according to Sir Charlie Mayfield, chairman of the John Lewis Partnership, are the most valuable customer because they spend the most. Consequently, this year, marketers should look to increase the value of physical space as an amplifier to online sales.

 


 

By Harriet Lowe, Insight Manager

 

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