GUEST COMMENT Collaborate to innovate: How retailers and tech firms are evolving the industry toget
It’s difficult to imagine a world without Amazon and Google. The two tech giants have been at the forefront of change for nearly 20 years, re-thinking and reinventing the way we live our lives through technology. They have become not only leaders but partners, as retailers increasingly turn to them for inspiration to help transform their own products and services.
While it’s easy to assume that the new app your favourite fashion retailer has created was their idea, the reality is that behind the scenes the big players are driving change and providing the technology that fuels the customer experience. But it isn’t just the billion-pound global tech empires innovating the retail industry around the world – there are lots of examples of start-ups doing exciting things with brands too.
The presence of industry giants
Many of the top digital retail innovations in the past year have been down to brands working together. Nowhere is this more clearly illustrated than in our recent Digital Retail Innovations Report 2017
, which lists top retail technological achievements of the year. Whilst Amazon’s Alexa was ranked the number one innovation of the year in its own merit, it was also applauded twice more thanks to alliances with both Starbucks and Toyota. Alexa now boasts more than 15,000 ‘skills’ – or voice-controlled apps – including everything from checking train times to ordering pizzas from Dominos by voice.
Starbucks is also reaping the rewards from its link-up with Amazon Alexa
, which allows customers to pre-order their usual drinks before they’ve even left the house. The retailer has now found that this capability now accounts for 7% of all transactions in the US. The innovation was ranked an impressive fifth place in the Digital Retail Innovations Report, whilst the technology has also resulted in Starbucks opening a mobile order and pay store at its Seattle headquarters.
But why collaborate?
In the past decade, the way consumers shop has changed dramatically. Every stage of the customer journey has been transformed by advances in technology – from research, through to ordering and delivery. Delivery service Shutl
, for example, has partnered with retailers including Whole Foods and Hotel Chocolat, and made it possible to shop on-the-go and order a product that can be delivered almost immediately. Customers today seek instant gratification, and retailers need to constantly evolve to meet their expectations before they go elsewhere.
Looking to the exciting world of tech start-ups, German retailer Otto earned the 11th spot on our Digital Innovations list for its partnership with the tech start-up Blue Yonder. The companies have worked together to help improve Otto’s operational efficiencies, by automating the returns process and controlling stock levels by forecasting sales using innovative AI technology capable of crunching billions of numbers. The collaboration has reaped rewards for the retailer; surplus stock has declined by a fifth, and the new system has reduced product returns by more than 2m items a year.
Of course, the primary aim for retailers is to boost conversion – particularly on mobile with the challenge of load times and the small screen size. Modiface, the augmented reality tech specialist, is helping beauty brand Smashbox to do just this with its ‘gaze based analytics’. Using ModiFace’s video-based tracking of eye gaze location, the technology will track the location on a mobile screen of the user based on their video, making it easier for the brand to ideally place ads where the user is already gazing. According to the Modiface CEO, Parham Aarabi, this has resulted in “a consistent 27% increase in conversions when eye tracking has been used to provide timely product recommendations”
Collaboration presents an opportunity for retailers to meet expectations, overcome challenges and deliver the best experience possible to drive conversion. As demonstrated, it’s often when innovations collide and retailers work together, that the best retail initiatives are born.
The benefits are endless
The ideal collaboration is one that not only helps employees on the shop floor do their jobs better, but also improves the customer experience. Although chatbots have had mixed success to date
, the partnership of Staples and IBM Watson is a good example of one which is actually working well. They teamed up in an attempt to improve the retailer’s online customer service and overall experience
, and created an ‘Easy Button’ service, which uses the cognitive technology capability of IBM’s Watson software.
By teaching Watson how to handle the top 15 to 20 most common support tasks for assistants, Staples was able to relieve their customer support reps from having to respond to many of those transactional inquiries, therefore freeing them up to provide higher-level support more complex needs and requests.
Creative, useful technology is emerging across the industry, from giants such as Amazon to tech start-ups. And Walmart is even creating its own thriving digital community, by acquiring a number of innovative tech companies under one roof in its Walmart Labs
With new challenges impacting the retail industry on an almost daily basis, it’s clear that collaboration offers a means for brands to be imaginative with technology and pool their knowledge to improve all aspects of the customer experience. Guy Chiswick is MD Northern Europe at Webloyalty