TECHNOLOGY

Starbucks among brands on cutting edge of AI in retail

BY CSA STAFF

Coming soon to Starbucks: virtual baristas.

The coffee giant plans to add a Siri-like virtual assistant to its mobile app that will allow users to place an order by talking to a virtual barista that will then send the order to a store nearby user where it will be made by an employee.

The new AI feature is just one example of how a handful of brands, including home improvement giant Lowe’s, are using artificial intelligence in their operations, reported Adweek.com.

"AI is going to be like electricity or the Internet — it's going to be foundational technology [for] which most things are built," says Kyle Nel, executive director of Lowe's Innovation Labs.

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Amazon increased holiday TV ad spend in a big way

BY Deena M. Amato-McCoy

While most retailers reduced traditional advertising spend in favor of digital sources this holiday season, Amazon made an unprecedented move to television.

This was according to the “MediaRadar Trend Report” that examined holiday advertising spend among Amazon, Walmart, Target, Macy’s, Sears, Kohl’s, Nordstrom, and J.C. Penney, between October and November 2016.

When comparing holiday ad spend by retailer, here is how the companies fared:

Amazon: While Amazon saw print ad spend decline (-10%), it aggressively increased spend in linear TV ads (76%) and digital (224%). In fact, Amazon owned the biggest increases in each area year-over-year.

Walmart: Walmart, the top brick-and-mortar retailer by sales volume, decreased ad spend across print (-15%) and television (-10%) compared to last year. The drop in TV spend was the third largest behind Sears (-53%) and Nordstrom (-45%). The company spent considerably on digital advertising, upping its investment by nearly 170% (+168%). The increase was second only to Amazon (+224%).

Target: Target was the only retailer to increase ad spend across every key marketing channel: print, TV and online. Investments in print went up 4%, while TV grew 54%. The increase in print was the second highest following Kohl’s (59%). Target was also the runner-up for its TV increase, losing only to Amazon (+76%). Target also spent more on digital ads compared to 2015, raising spend by 161%. Only Amazon (+224) and Walmart (+168) spent more.

Macy’s: Macy’s decline in print ad spend was the biggest across all eight retailers. The company cut investments by a quarter (-24%). It did boost TV (+20%) and digital (+34%) spend considerably, however.

Sears: Sears saw pronounced cuts across the board. Though print spend lowered by just 5%, TV was more than halved (-53%) while online de-creased by almost three-quarters (-72%). The cuts in TV and digital were the biggest among the eight retailers.

Nordstrom: Nordstrom also cut holiday ad spend across every channel, but to lesser degrees in most areas. Print spend dropped nearly a quarter (-23%). Only Macy’s saw print investments decline more (-24%). Similar-ly, TV (-45%) and digital (-28%) spend all lowered. The cuts in TV spend were second only to Sears (-53%) while the drop in digital was the third largest behind Sears (-72%) and Kohl’s (-58%).

Kohl’s: While six out of eight retailers reduced spend on print, Kohl’s put forward the biggest investment year-over-year, increasing it by 59%. The rise in budget seemed to be taken from TV (-7%) and digital (-58%). Kohl’s nearly 60% drop in online ad spend was beaten only by Sears (-72%).

J.C. Penney: J.C. Penney’s print spend declined 17% in 2016, the third-biggest drop on the year behind Macy’s (-24%) and Nordstrom (-23%). Digital spend was also down by a modest 7%. TV, however, was up 49%, the third-largest growth among the 8 retailers, following Amazon (+76%) and Target (+54%).

“Most retailers are reducing print spend while focusing on other channels, like linear TV and digital,” said Todd Krizelman, CEO and co-founder of MediaRadar. “Online ad spend, however, saw some of the biggest increases percentage-wise. This is driven by shifting consumption and shopping patterns among holiday consumers.”

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Generation Z leads the omnichannel parade

BY HBSDealer Staff

When it comes to combining in-store visits and online product research or purchase, Generation Z (ages 18 to 26) leads all other shopper age groups in the U.S., lending some spark an otherwise flat “omnishopping” environment.

Just-released findings from GfK’s annual FutureBuy study show that nearly half (46%) of all Gen Z shoppers in the US have researched an item on a mobile device and then bought it in a store – a strategy known as “webrooming.” That level is up 5 percentage points from 2015 and beats other generations by 12 to 27 points.

One-third (32%) of Gen Z US shoppers report they researched a product in a bricks-and-mortar store and then bought it online via a mobile device (“showrooming”). This compares to 24% just a year ago, and bests other generations by 11 to 20 percentage points.

Frequency of showrooming is also higher among the younger generations, with Gens Y (ages 27 to 36) and Z much more likely to say they showroom at least once a week. Generation X (ages 37 to 51), on the other hand, tends to fall into the “once every few weeks to once a month” category.

Overall, webrooming – reported by one-third (34%) of all US shoppers – is much more common than showrooming (21% of US shoppers).

Somewhat surprisingly, Gen Z was also most likely to cite concerns about credit card and personal information security as a reason to avoid shopping online. One-third of all Gen Z shoppers in the US mentioned this worry, up from 26% last year. But the top reason for avoiding online shopping remains the cost of delivery, cited by 50% of all shoppers and 51% of Gen Z.

“These findings really illustrate that generation is a major factor in determining how someone prefers to shop,” said Joe Beier, EVP on GfK’s Shopper and Retail Strategy team. “They also offer a stark reminder of the importance of tightly defining the target audiences for any activation initiatives. The days of ‘one size fits all’ are clearly over.”

GfK’s annual FutureBuy study measures the shifting interactions of digital and in-person activities in the shopper experience, tracking essential trends such as “showrooming” and “webrooming.”

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