While becoming a parent is a wonderful occasion for any family, one of the many challenges parents will face in particular is how to deal with the change to shopping habits and the contents of their shopping baskets. As the baby grows, so do its requirements, and there is a real opportunity for retailers and consumers to take advantage in mutually beneficial ways.
The digital revolution in consumer buying patterns is already underway and this is no secret. Mintel reported earlier this year on the rise of online grocery shopping in Europe among Millennials, as they are increasingly opting for the stress-free and time-saving convenience of online shopping. It is not just Millennials, however, but new parents who could be taking advantage of technology to save time and hassle.
A revolution within a revolution is taking place – it’s called Programmatic Commerce and it will change the lives of parents and the way businesses can obtain and retain customers using the Internet of Things and smart devices.
What is Programmatic Commerce?
The Internet of Things (IoT), to put it simply, is a network of physical items that are connected online and which communicate through internet-enabled devices and systems. It has moved well beyond the ‘buzzword’ label that many have given it and is now becoming increasingly important for companies that do not want to be left behind in the digital revolution. Organisations need to carefully consider how the IoT can drive their business and benefit their customers.
So it is Programmatic Commerce that could and should be the future for retailers attempting to stay ahead of the curve. This is the idea that IoT-connected devices can make purchasing decisions on behalf of consenting consumers and businesses based on pre-programmed parameters and learning preferences – for example a coffee machine automatically re-ordering the owner’s favourite coffee when supplies run low or fridges ordering milk.
Salmon’s Programmatic Commerce report found that 57% of consumers will be ready for automated purchasing within two years, with 13% ready now. With nearly half (49%) of UK shoppers saying that digital tech has made the shopping process faster and 35% stating that they’re already using smart tech at home, the switch to more advanced technology is not just getting started but is already in full swing. Programmatic Commerce is simply the next step.
The baby care boom
One of the much-anticipated industries primed for a revolution is baby care. The reality is that new parents don’t have a lot of time; they crave ease, convenience and help. This is where Programmatic Commerce can come into play by fusing hardware capable of capturing information, data about the parents and baby, and the ability to automatically replenish.
This could be used for changing mats; retailers such as Pampers or Bounty could offer recently signed-up customers a changing mat which has the ability to weigh the baby. The hardware could then be linked to an online profile with one of the suppliers, tracking the baby’s weight and giving an insight into its size, in turn affecting the size of the nappies. Parents would then be notified that they might want to consider increasing the size of the nappies and be asked if they’d like to order.
Replenishing the nappy stock could also become fully automated – by tagging specific products and introducing connected hardware such as nappy storage boxes or dispensers, the stock levels of these items could be tracked automatically and new products ordered when stock is running low. This would save time and increase convenience for the customer.
The benefits for retailers
This new idea of ecommerce would give consumers an opportunity to partly or fully automate their repeat purchases by inputting their preferences in advance. Most likely, customers will have to select a brand on the device that is most convenient to them based on cost or speed of arrival. This development would fundamentally shift the way customers purchase products – using the automatic replenishment function, this would essentially ‘lock in’ a customer with one particular brand and its associated products.
It is therefore imperative that retailers and brands cement their relationship with the consumer for fear of being ‘locked out’ of the digital shopping aisle without their brand on the shelf. Smart shopping and the introduction of Programmatic Commerce into the mainstream will certainly help to facilitate, and almost guarantee, retailer loyalty from the customer.
The ‘oversharing of data’ myth
There will always be scepticism among parents that sharing data of their baby’s age, weight and other personal information is too much – and consumers have a right to be sceptical. However, within grocery ecommerce, online grocery retailers already collect data on consumer purchases and are able to use this data to predict future purchasing and suggest recommended buys when they next visit the site (a choice consumers can accept or not).
Using one example, Boots collects a large amount of data for parents who sign up to their personalised offers, free magazines, expert advice and Boots Advantage Card scheme (which offers parents 10 points for every £1 spent). It then takes this data which it uses to grow sales through targeted offerings. It’s clear that consumers are already prepared to hand over small amounts of data for certain benefits, and what Programmatic Commerce does is make customers’ data work harder and better for parents to make their lives easier.
This automation process can also be managed, too; human approval will be needed before automatic re-ordering can take place. After time, once the customer feels at ease with the frequency of re-purchasing, a fully automated system can be used. Consumers should expect a certain level of trust when they hand over any amount of data.
The opportunity for retailers to involve themselves in baby care using automated payment systems is huge. It is a mouth-watering prospect for brands to cement relationships, build consumer trust and be seen as an innovator and leader in technology in their field. Industry experts are labelling Programmatic Commerce as the next big thing in digital and tellingly, customers are already ready for, and excited by, the prospect of automatic re-purchasing.
Hugh Fletcher is digital business consultant at Salmon [IRDX VSMN]
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