Updates On Boundless Retail: From Omni-Channel To Customer-Centric

In this first entry of our “Updates on Boundless Retail” series, we take a closer look at Amazon’s and Walmart’s recent acquisitions, how they are becoming more alike than ever in terms of the shopping experience they provide, and why a customer-centric approach is what will define the next stage of Boundless Retail.

On June 16, the retail world was shaken up by two major acquisitions. Amazon announced its $13.7 billion acquisition of Whole Foods while Walmart announced it is buying premium menswear brand Bonobos for $141 million. For us, these two announcements offer a rather intriguing juxtaposition to re-examine the current state of retail and the way an emerging convergence of online/offline retail channels is shaping the sector’s future.

On one side, the Whole Foods acquisition solidifies Amazon’s entry into brick-and-mortar retail, as the deal bought Amazon “431 upper-income, prime-location distribution nodes” that will further boost its logistical prowess, particularly in the food and grocery categories. On the other, Walmart, the biggest physical retailer in the world, is buying a fashion retailer that uses its physical stores strictly as showrooms and sells everything through its website. As a result, both companies are racing against each other to become more like each other, as they blur the line between physical and online retail.

In our 2016 Outlook trend report,we observed:

“As ecommerce, physical, and on-demand retail become tightly integrated, our smartphones are becoming our passports, connecting our online preferences, profiles, and activities to our offline shopping experiences, and vice versa. Boundless Retail allows consumers continuous access to sellers who build relationships through multiple touchpoints and channels.”

Now, halfway into 2017, it is becoming clear that the concept of Boundless Retail is evolving into an even more seamless and customer-centric stage. The omni-channel approach that most traditional brick-and-mortar retailers have started to adopt is certainly helpful in meeting the increasing demand in ecommerce. However, it lacks the fluidity that exemplifies the reality of shopping today, where the customer journey no longer follows through one particular sales channel but rather would jump between various channels as they wish. For instance, they may discover your product on a social channel during commute, order it on a desktop device when they are at work later, and then decide to pick up the item in store on their way home. Or they may discover your product when they are window shopping and later decide to make an impulse purchase on their mobile device.

This kind of random and mutable shopper behavior enabled by the abundance of retail channels renders the previous channel-defined strategies no longer efficient, since the siloed way of thinking prevents retailers from truly embracing a customer-centric approach that prioritizes consistently optimized customer experience over driving customers down particular sales channels. Amazon and Walmart, as the biggest retailers in ecommerce and brick-and-mortar respectively, understand this new retail reality. On a closer look at these two acquisitions, it is clear that both companies are actively implementing a more seamless shopping experience that is not so much as omni-channel but rather channel-agnostic.

Amazon has been trying to get into the grocery business for a couple of years now, first with private-label food products sold on Amazon.com and later with AmazonFresh slowly rolling out to select markets. In fact, one could say that Amazon has been eyeing the grocery market since 2012 with the acquisition of Kiva system, which span out from Webvan, the first ever on-demand grocery platform. Buying Whole Foods instantly gives Amazon access to the premium grocery customers they have been chasing after and, more importantly, the mass scale it needs to make the grocery business operational as a modularized service.

As analyst Ben Thompson pointed out in his Stratechery post, buying Whole Foods sets up the infrastructure that Amazon would need to launch Amazon Grocery Service, where the ecommerce behemoth would leverage its distribution scale to take over the perishable goods market and disrupt all food-related businesses. Amazon chose to commoditize its cloud platform and made Amazon Web Services (AWS) a white-label product that all businesses can use and build upon, which ended up dominating the web service market with it unparalleled scale and cloud computing power. Now it is aiming to do the same with perishable goods.

Amazon could care less if a rival online retailer wants to host their website on Amazon Web Services, as it will only feed into their cloud business. (Walmart, understandably, aims to undermine Amazon by ordering its vendors to use AWS competitors instead.) Similarly, the perishable goods that Amazon holds under its grocery operations now gain a high-volume brick-and-mortar channel, and vendors could care less about whether their products are being sold via Amazon Fresh or Whole Foods stores. Buying Whole Foods provides Amazon with a guaranteed, large-volume customer of the perishable goods in its network so as to justify scaling up its wholesale grocery operations and better compete with other grocery retailers.

Make no mistake, Amazon still has a long way to go in its quest to conquer offline grocery business the way they did with their cloud service. At the moment, Walmart still controls the biggest share of the U.S. food and grocery market (about 14.5%), followed by Kroger (7.2%), according to estimates by GlobalData Retail. In comparison, Whole Foods currently sits a 1.2% market share and Amazon with a 0.2% share. But with Whole Foods now under its control, Amazon can start pushing for a grocery shopping experience for its Prime members that is totally fluid and channel-agnostic, using the Prime account as the cross-channel identification key, and convert more grocery shoppers into its ecosystem with the combined appeal of Whole Food’s high-end brand and an optimized shopping experience.

Of course, Walmart is not going down without a fight. The decision to acquire Bonobo’s shows the supermarket chain is determined to work towards building a more fluid, customer-centric shopping experience. Already, the company has been steadily rolling out curbside grocery pickup services in select U.S. markets. Last month, it took that concept one step further with a trial run of automated pickup grocery pickup kiosks at an Oklahoma City store.

The sustained success of Bonobo’s unique ecommerce-led, showroom-supporting strategy will provide Walmart with some much-needed insights into how to develop a flexible online/offline shopping experience to take on Amazon’s advances in online apparels, evidenced by the new fashion-minded Echo Look and Prime Wardrobe service, which brings the “try-before-you-buy” model to Prime shoppers. It will be fascinating over the next few years to watch the two retail giants battle it out over grocery and fashion retail.

So, given the current state of the retail market and the way its future is shaping up to be, what’s a U.S. retailer whose name is neither Amazon nor Walmart to do? Well, the first step is to recognize the fact that there is no way you will be able to compete with those two behemoths in terms of scale. Amazon has pretty much dominated ecommerce traffic and will continue to buy its way into the brick-and-mortar market, whereas Walmart will still have the largest physical retail store count in the world as it continues to grow and improve its ecommerce operations. There is simply no viable way to compete with their massive scale and the operational advantages that come with it.

That being said, retailers can still carve out a sustainable and profitable business by focusing on differentiation and perfecting the shopping experience they provide. As Andy Dunn, CEO of Bonobo’s, astutely pointed out, retailers need to focus on developing a unique brand identity with proprietary differentiation points that will offer customers a good reason, be it low cost, exclusive selections, personalized recommendations, or a unique shopping experience, to choose you over their default retail choices. As the kind of purposeful shopping, where the shoppers already know what they want to buy, becomes increasingly expedited and even automated by digital tools, the experience is becoming the ultimate differentiation point that retailers need to focus on.

Not every retailer can afford to be omni-channel, but every one can find a way to make their products, services, customer experience, and ultimately your brand, different enough to attract a loyal customer base. In the next stage of Boundless Retail, the end goal is not simply to be present on every sales channel, but to build a retail brand that is so distinguished and beloved by your customers that it won’t matter which channel you are on.

Here Comes Dash Wand, An Alexa-Powered Barcode Scanner For Your Kitchen

What Happened
Amazon continues with its master plan of conquering every room of the smart home with the launch of yet another Alexa-powered connected device. The Dash Wand, which the ecommerce giant unveiled on Wednesday night, is a cordless barcode scanner with Alexa integration. Designed specifically for kitchen use with its water-resistant, durable design, it focuses on facilitating grocery shopping from AmazonFresh. Prime members can either push a button and tell Alexa what to add to their shopping cart, like they would with an Amazon Tap. or simply use it to scan a barcode of the item they’d like to repurchase.

Thanks to the full Alexa integration, the Dash Wand also doubles as a smart kitchen aid, capable of finding recipes, converting units of measurement, or even finding nearby restaurants when your own culinary attempt fails. Notably, Amazon is essentially giving out this $20 device for free, as Prime customers will get 20 off their next purchase after registering the device.

What Brands Need To Do
Amazon created a smart home product with an incredibly focused user case – helping people cook. With a water-resistant, durable design, it is designed to be used in the kitchen. From finding recipes to getting the ingredients to setting timers for the oven, Alexa can do it all, making it a super valuable addition to a modern kitchen.

For Amazon, this device serves as a gateway to attract more shoppers to use AmazonFresh, which underscores Amazon’s aggressive push into the grocery market. According to a recent report from Food Marketing Institute and Nielsen, about a quarter of American households currently buy some groceries online, and more than 70% will engage with online food shopping within 10 years. In fact, online grocery sales are expected to hold 20% of the market by 2025. No wonder Amazon is willing to give away Dash Wand for free in exchange of further locking Prime members into its ever-expanding ecosystem.

As Amazon continues to push into the grocery market, it is becoming increasingly crucial for grocery and household CPG brands to make their products available and discoverable through Amazon. For food retail chains, this should come as a wake-up call to invest in ecommerce channels of your own or forge alliances with Amazon rivals that can surface your online services via their competing smart home devices so as to reach grocery shoppers right in their kitchens.

 


Source: Amazon

Header image courtesy of Amazon’s promotional image

Amazon Opens Program For Creating “Watch & Shop” Apps For Fire TV

What Happened
Amazon is launching a program that invites video content owners to create shoppable streaming apps for their content on Fire TV streaming products. The so-called “Watch and Shop apps,” which now has its own section under the Apps tab, allow Fire TV users to view and purchase a curated list of items relevant to the video they are watching. Because Fire TV viewers are already logged in with their Amazon account, they can purchase the item directly from the product description page or add it to the shopping cart for later.

What Brands Need To Do
Buying products from inside a video is not a new concept — YouTube introduced a click-to-buy feature in January 2009. But with more online retailers start experimenting with interactive video each year, it becomes clear that simply dropping a link or a “Buy Now” button into a video ad is effective enough in converting customers. The friction of putting in the payment information alone is usually enough to stop shoppers in their path.

Obviously, this new program offers brands a great opportunities to explore shoppable content as both a new promotional tool and a direct sales channel. For example, a popular makeup tutorial app can create a Watch and Shop app that displays the cosmetic products that are being demoed in that particular video segment. Of course, this being an Amazon program, it would require brands to sell their products on Amazon.com.

Currently, this program is invite-only, and brands that wish to apply will need to have a Youtube channel with a minimum of 15 videos, a YouTube developer key, and, most importantly, a list of products you would like to feature in your videos, along with their unique identification number (ASIN) as listed on Amazon.com. For more information on how to apply, please check the source.

Shoppable video content has been undoubtedly on the rise for the past few years. It is especially popular among fashion and beauty brands. Birchbox, Dr. Brandt Skincare, Beautyblender, and SheaMoisture are among the first ones to try out a shoppable video layer created by video company MikMak that enables users to purchase branded products on Instagram Stories and Snap Ads with a single URL.

 


Source: Amazon Developer Blog

Amazon Debuts 4K TV With Fire TV OS And Alexa

What Happened
On Tuesday, Amazon announced a new lineup of 4K smart TVs that run on the updated Fire TV software. Integrated with Alexa support, users can evoke Amazon’s virtual assistant to conduct voice search for content or access Alexa skills via the remote control. As is the case with Amazon’s Fire TV streaming devices, Alexa will show you many results visually instead of just speaking them back. Working with two TV manufacturers, this new Amazon Fire TV lineup will be sold under either the Element or Westinghouse brand depending on the regional market, with prices ranging from $449 for the 43-inch model to $899 for the 65-inch.

What Brands Need To Do
This announcement continues Amazon’s hot streak of integrating Alexa in smart home devices. In the past month alone, the ecommerce giant introduced two new Echo devices – the Echo Look and the Echo Show – to push deeper into the conversational home gadget space. The Alexa-powered smart TVs are but another way for Amazon to make Alexa omnipresent in a connected household. As conversational devices continue to conquer the smart home space, brands that wish to stay ahead of the curve need to start leveraging the developer tools available to create voice experiences for the likes of Alexa in order to reach customers at home.

How We Can Help
The Lab has extensive experience in building Alexa Skills and chatbots to reach consumers on conversational interfaces. So much so that we’ve built a dedicated conversational practice called Dialogue. The “Miller Time” Alexa Skill we developed with Drizly for Miller Lite is a good example of how Dialogue can help brands build a conversational customer experience, supercharged by our stack of technology partners with best-in-class solutions and an insights engine that extracts business intelligence from conversational data.

If you’d like to learn more about how to effectively reach consumers on conversational interfaces, or to leverage the Lab’s expertise to take on related client opportunities within the IPG Mediabrands, please contact our Client Services Director Samantha Barrett (samantha@ipglab.com) to schedule a visit to the Lab.

 


Source: Fortune

Amazon Adds Computer Vision To Alexa With New Echo Look Device

What Happened
On Wednesday, Amazon unveiled a new Echo device, and it is a big departure from the smart speakers introduced in the Echo lineup so far. Named Echo Look, the newest hardware product from Amazon looks more like a desktop security camera than a connected speaker. But Amazon is actually positioning the device as a hand-free selfie camera and style assistant that can help you take selfies hands-free. Equipped with built-in LED lighting and a computer vision-based background blur feature, it promised to capture the best full-length pictures and videos of you in different outfits for review, comparisons, and style recommendations.

Echo Look comes with a companion app that has a Style Check feature to compare two outfits and rate which is better based on machine learning algorithms. The feature was first added to the iOS Amazon app last month as Outfit Compare and does not require an Echo Look to work. And because it is powered by Alexa, you can ask Echo Look to read you news, play music, or access any of the over ten thousands third-party Alexa skills, just like you would with all the other Echo speakers. This product is available by invitation only for now, and Amazon did not announce it will become widely available.

What Brands Need To Do
By introducing computer vision into the Echo lineup, Amazon is making a strong push to enhance Alexa’s capabilities. Positioning this new device as a “hands-free camera and style assistant,” as Amazon’s product page reads, is a strong reformation of Amazon’s ambition in conquering the fashion industry. Echo Look will help Amazon gain access to millions of its customer’s wardrobes, thus allowing it to glean a huge amount of data from the user-generated pictures to gain great insights on what its customers like to wear and would most likely buy.

Besides, it seems safe to assume that this is merely the first step in Alexa’s evolution. By adding cameras to Alexa-powered devices, the voice assistant now has “eyes” and no longer has to solely rely on voice command for input. Using camera as an input source and combined with machine learning and object recognition, Alexa will grow much more powerful in time.

Wait until Amazon start allowing developers using Alexa Voice Service (AVS) to incorporate visual input into their Alexa-powered products, the new kind of smart home devices will become available as a result present an exciting opportunity that brands will be able to leverage to engage with customers. For example, when a smart fridge can see that you’re about to run out of milk and triggers Alexa to remind you that, it would mean that CPG brands and food retailers will have to rethink their marketing strategies and product design to accommodate this type of conversational smart home devices and new shopper behaviors they engender.

If you’d like to learn more about how to effectively reach consumers on conversational interfaces, or to leverage the Lab’s expertise to take on related client opportunities within the IPG Mediabrands, please contact our Client Services Director Samantha Barrett (samantha@ipglab.com) to schedule a visit to the Lab.

 


Source: Amazon

Images courtesy of Amazon’s product demo video

 

Amazon Updates Alexa Developer Policy To Ban Ads In Most Third-Party Skills

What Happened
Amazon has updated its developer policy to explicitly prohibit marketing messages in most third-party “skills” for its voice assistant Alexa. The updated policy now simply bans skills that contain “any advertising for third-party products or services.” Exceptions are made for music streaming, radio, and news briefing skills, which can continue to carry sponsor messages or audio ad breaks, but otherwise Amazon is banning ads on the Alexa platform.

What Brands Need To Do
With this policy update, it is clear that Amazon intends to impose a tight control over the marketing messages delivered via Alexa. The timing suggests this could be a response to the recent incident where Burger King released ads intentionally crafted to trigger Google Home. This means brands will no longer be able to sponsor a popular skill, other than the three exempted categories, to reach Alexa users. Instead, brands interesting in exploring voice-activated smart home devices as a marketing channel should reorient their strategy towards building branded skills that can provide users with functional values and engaging conversational experiences.

How We Can Help
The Lab has extensive experience in building Alexa Skills and chatbots to reach consumers on conversational interfaces. So much so that we’ve built a dedicated conversational practice called Dialogue. The “Miller Time” Alexa Skill we developed with Drizly for Miller Lite is a good example of how Dialogue can help brands build a conversational customer experience, supercharged by our stack of technology partners with best-in-class solutions and an insights engine that extracts business intelligence from conversational data.

If you’d like to learn more about how to effectively reach consumers on conversational interfaces, or to leverage the Lab’s expertise to take on related client opportunities within the IPG Mediabrands, please contact our Client Services Director Samantha Barrett (samantha@ipglab.com) to schedule a visit to the Lab.


Source: TechCrunch

Amazon Lends Alexa’s 7-Mic Voice Processing Tech To Hardware Makers

What Happened
Amazon continues to expand Alexa’s footprint by opening up its far-field microphone and voice processing technology to third-party manufacturers to integrate into their own voice-activated devices. The new development kit also includes access to Amazon’s proprietary software for wake word recognition, beamforming, noise reduction, and echo cancellation as well as reference client software for local device control and communication with the Alexa Voice Service. Right now this development kit is by invitation only, which hardware makers can apply for one here.

What Brands Need To Do
With Alexa Voice Services, Amazon is already encouraging other companies to build the Alexa into their own products. Now with this new developer tool, device makers will have an easier and less expensive way to incorporate Amazon’s voice recognition tech into more voice-activated connected devices, potentially expanding Alexa’s reach even further.

A new CIRP report estimates that there are now 8.2 million customers who own an Amazon Echo device, up 60% from the 5.1 million Echo users that CIRP cited in November 2016, making it one of the fastest growing connected home devices in the past few years. Led by Alexa, voice-activated devices are poised to change the way many customers search for information and interact with businesses. Brands seeking to stay ahead of the curve will need to start developing a conversational strategy to figure out an authentic way to establish a brand presence on the conversational devices.

How We Can Help
The Lab has extensive experience in building Alexa Skills to reach consumers on conversational interfaces. So much so that we’ve built a dedicated conversational practice called Dialogue. The “Miller Time” Alexa Skill we developed with Drizly for Miller Lite is a good example of how Dialogue can help brands build a conversational customer experience, supercharged by our stack of technology partners with best-in-class solutions and an insights engine that extracts business intelligence from conversational data.

If you’d like to learn more about how to effectively reach consumers on conversational interfaces, or to leverage the Lab’s expertise to take on related client opportunities within the IPG Mediabrands, please contact our Client Services Director Samantha Barrett (samantha@ipglab.com) to schedule a visit to the Lab.

 


Source: The Verge

Alexa Users Can Now Activate New Skills Just By Asking

What Happened
Amazon is making it even easier for Alexa users to discover and activate new skills, which is Amazon’s way of calling voice-only app for its voice assistant made by third-party developers. Amazon has added a functionality to catch failed launch intents of non-enabled skills and allow users to invoke skills that haven’t been enabled by saying valid invocation utterances. This means Alexa-users will no longer need to pre-enable skills before using them. 

Previously, users have to enable a skill via the Alexa app on their mobile devices before they can use it on Alexa. Those who failed to do will be greeted with an error message and a prompt designed to teach the customer how to enable the skill.

This addition also offers a certain level of flexibility by allowing utterances similar to the rigid invocation pattern to result in skill enablement. For example, users can say either “Open up the Jeopardy game,” “Start up Jeopardy,” or “Launch the Jeopardy skill,” all of which will launch the Jeopardy skill for them even if it has not been enabled before.

What Brands Need To Do
This is a small yet significant update for the Alexa Voice Service, which allows third-party skills to be invoked without prior enablement. This not only makes for a smoother user experience but also removes a lot of the frictions in getting Alexa users to try out the skills made by brands. Now, marketing campaigns can feature skill utterances that work for customers whether or not they’ve enabled a skill allowing for easier discovery and repeated use.

According to a report from analytics firm VoiceLabs, about 33 million voice-first devices will be in circulation by the end of 2017. Therefore, It is up to brands to start working with developers to figure out their brand voice and incorporate conversational tools into their marketing efforts.

How We Can Help
The Lab has extensive experience in building Alexa Skills and chatbots to reach consumers on conversational interfaces. So much so that we’ve built a dedicated conversational practice called Dialogue. The “Miller Time” Alexa Skill we developed for Miller Lite is a good example of how Dialogue can help brands build a conversational customer experience, supercharged by our stack of technology partners with best-in-class solutions and an insights engine that extracts business intelligence from conversational data.

If you’d like to learn more about how to effectively reach consumers on conversational interfaces, or to leverage the Lab’s expertise to take on related client opportunities within the IPG Mediabrands, please contact our Client Services Director Samantha Holland (samantha@ipglab.com) to schedule a visit to the Lab.

 


Source: CNET

Amazon Prime Wins Streaming Rights Of NFL Thursday Night Games

What Happened
Amazon has reportedly shelled out around $50 million to livestream ten NFL games of the new season, five times more than what Twitter paid last year. Interestingly, Amazon won’t stream the games to anyone who wants to watch online for free as Twitter did. Instead, the NFL Thursday night games will be a new addition to the ever-growing list of perks for Amazon Prime members.

What Brands Need To Know
On a larger picture, this deal signals the continuing shift of live sports viewing from TV to online streaming. Amazon reportedly beat out the likes of Twitter, Facebook, and YouTube for the bid, which underscores how determined the ecommerce giant is about growing out its streaming offering. The decision to only allow Prime members to stream this also points to the company’s core strategy that positions the membership program as the lynchpin for fostering customer loyalty.

This marks a very different approach than Twitter, who bought the rights last year to raise its profile as a live-streaming platform and generating revenues from selling the ad slots allocated for local TV ads at a high price. In comparison, Amazon wouldn’t necessarily be interested in selling ads (although it could very well use those ad slots to promote its services and original shows.) Researches have shown that Prime members on average spend two times more than regular shoppers on Amazon every year. Therefore, it makes sense that Amazon would pay the big bucks to secure the live-streaming rights of NFL games and use it to drive signups and retain subscriptions for Prime. Other brands should learn a thing or two from Amazon’s strategy and start thinking about ways to improve and integrate their loyalty programs so as to establish a long-term relationship with customers.

 


Source: Re/Code

Amazon Invites Social Influencers To Curate Collections And Earn Money

What Happened
Amazon has launched a new initiative that aims to entice more social influencers to plug for sales on its platform. Similar to the existing Amazon Affiliate program, which allows anyone to sign up to create links and shopping ads for their own website or blog to get a referral cut of the sales, this new Amazon Influencer Program exclusively offers social influencers a chance to curate product collections on Amazon.com and generate income through affiliate sales. This makes for a more browseable shopping experience and let the influencers recommend a set of products to their fans at once.

What Brands Need To Do
With Amazon dominating online sales in the US, some brands and manufacturers have forgone e-commerce on their sites entirely, opting instead for sales and fulfillment operations managed by Amazon. This new program enables the ecommerce giant to leverage social influencers’ popularity to facilitate product discovery.

At a time when influencer marketing is becoming an essential business strategy for many marketers to reach new audiences and raise brand awareness, this is undoubtedly a smart move for Amazon to stay competitive in the ecommerce arena. More brands, especially fashion and CPG brands, should consider similar initiatives so as to leverage the personalized and authentic content created by influencers to garner social buzz and encourage customer loyalty.

 


Source: TechCrunch