Study: Don’t underestimate the value of AI
Brands that are not thinking about how to leverage artificial intelligence are already falling behind.
This was according to the Retail Revolution study from OMD EMEA, and Goldsmiths, University of London. It is based on 15,000 consumers across 13 European countries.
While brands are turning to more interactive technologies to engage shoppers, customers now expect “VIP treatment” when they shop. To drive the high-quality, personalized experiences customers now expect, retailers must consider how to embrace the next stage of those technologies: artificial intelligence.
According to the study, almost twice as many European consumers said they are as familiar with AI compared to those who are unfamiliar with the technology. Nearly a quarter of consumers already use an AI device or app, and 41% want to get one.
Meanwhile, 47% of consumers claimed they would act less patiently if they knew they were interacting with AI. Only 17% of consumers would reject help from AI across retail sectors. This was only slightly higher than those who said they'd reject any kind of assistance (15%).
The study did reveal two distinct groups of consumers that are reluctant to engage with AI: young people who don't think they need it and older ones who don't understand it.
Over a third (39%) of 18-35 year olds said they wouldn't consider having an AI-enabled device as part of their lifestyle said it was because they didn't need it. Another quarter said it was easier to use their existing default option.
The challenge for retailers is to create a balance between managing customer expectations, inspiring them about the benefits the technology, and deciding how to best to employ AI to create the shopping experiences of the future. However, the risk is that companies will focus on what the machines are capable of, rather than what customers want.
The key things brands need to consider when planning a deployment is where to put AI in the communication process, where humans have to take over, and making the whole process as seamless as possible. They should think about training the machines to work with the consumer to deliver value — a move that will encourage consumers to use them further. Brands should also think about matching different interfaces to different demographics.
"As an industry, we need to turn the bundle of technologies described as AI into services that people can care about, such as their insurance app or their cinema chatbot,” said Jean-Paul Edwards, Director of Strategy and Product Development, OMD EMEA. “It needs to be an upgrade to apps, e-commerce, and so on.”
Retailers that will succeed are companies that use AI to manage customers' expectations, while simultaneously inspiring them about the benefits the technology can deliver.
"People find it hard to imagine this stuff. Brands should inspire them, but inspire them around their everyday needs,” he added. “Brands need to talk about the benefits, not the features."
Day One: Amazon makes its presence known at Whole Foods stores
Amazon found a savvy way to remind customers that it now owns Whole Foods Market.
On its first day as the owner of the natural foods grocer, Amazon positioned its Echo voice-assisted speaker as one of Whole Foods’ featured “Pick of The Season” discounted products. The deal slashes prices down to $99.99 for a full-size speaker, and $44.99 for the Echo Dot, according to The Verge, which highlighted a tweeted photo of the in-store ad.
And as promised, Whole Foods lowered prices on a selection of its best-selling grocery staples across its stores, with the price cuts reportedly broader than the retailer previously announced.
Looking ahead, Amazon and Whole Foods’ technology teams will begin to integrate Prime into Whole Foods' point-of-sale system. When the project is completed, Prime members will receive special savings and in-store benefits at Whole Foods. The two companies will continue to invest in additional areas over time, including in merchandising and logistics, to enable more lower prices for Whole Foods customers.
The partnership could also improve Amazon’s returns operation — a process that typically required customers to make trips to the post office or dedicated Amazon lockers.
“These trips include long wait times, and inconvenient locations or hours of operation,” Tushar Patel, CMO, Kibo. "With this acquisition, these friction points will no longer exist, as customers will be able to utilize the weekly trip to the grocery store to also take care of their returns at the same time. Additionally, Whole Foods stands to bring in additional foot traffic by providing the ability to pick up or return in store, which will sway grocery customers who don't typically visit Whole Foods.”
GNC steps up online payment options for Chinese customers
A wellness retailer is making is easier for its Chinese shoppers to make online purchases.
By partnering with Alipay, GNC Holdings is enabling all registered users of the payment platform in China to purchase vitamins, supplements, minerals, herbs, sports nutrition, diet, and energy products on its e-commerce site. Besides being a leading online payment provider in China, Alipay has 520 million registered users that access the platform to make online and mobile payments.
The partnership is part of GNC’s ongoing effort to support growing demand among Chinese customers for health and nutritional products sourced from the United States. Besides the country becoming more health conscious, demand is on the upswing since Chinese customers trust the authenticity and quality of U.S.-based merchandise. These two factors are contributing to a growing market among China’s vitamins and dietary-supplements, a segment that is expected to increase to $28.7 billion by 2021, according to Euromonitor International Ltd.
The move is also expected to contribute to GNC’s climbing online transaction growth. Despite these gains however, GNC’s same-store sales (which include GNC.com) slipped 0.9% in domestic company-owned stores for the second quarter ended June 30.
Yet, GNC’s interim CEO, Bob Moran remains bullish on the company’s online efforts.
“For the second quarter in a row, we saw meaningful transaction growth, improvement in our dot.com business and increased enrollment in our loyalty programs,” he added. “We believe this business is headed in the right direction, and we remain focused on execution and sales growth.”