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Mary Meeker, Alexa and Walmart’s smiley guy: The BloomReach Relevance Report

Almost summertime and the the living is almost easy. Take a load off and read the BloomReach Relevance Report.

Amazon and Alexa look to conquer the world

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If you’re looking for the next frontier that Amazon intends to conquer, consider CEO Jeff Bezos’ chat this week about artificial intelligence at Re/code’s Code Conference.

He said his company, which you might say is a pretty big player in e-commerce, web services, the publishing industry and the delivery business, has 1,000 people working on its Echo product, which its friends call Alexa.

Yeah, 1,000 people, as in a small town.

You know Alexa, right? It’s the being inside the Echo that keeps your shopping list, tells you the weather, plays your music, challenges you to Jeopardy and basically has you wondering why you need actual people in your life.

Re/code itself reported that Bezos said Amazon had been quietly working on this Echo thing for four years and that we’re all seeing just the tip of the iceberg at this point. Search Marketing Daily detailed how Bezos called this the first inning in the artificial intelligence/natural language processing game — and in fact it may be the first inning with only the first player up to bat.

He said that in the coming decades, artificial intelligence, natural language processing and machine learning were going to change the world in ways we can hardly imagine.

For a look at how such smart agents could help big companies’ bottom lines, check out this piece in the MIT Technology Review.

While Echo is still a somewhat new product, Amazon and machine learning, artificial intelligence and natural language processing no doubt go way back. The three broad engines of innovation are key components of progressive e-commerce operations and Amazon has undoubtedly  deeply familiarized itself with them while building up its e-commerce business.

Speaking of robotics-type stuff, which we were, kind of, it’s become old hat to talk about robots in retail. There is the OSHbot working at a Silicon Valley hardware store. There are chatbots. There are concierge-like robots roaming the halls of hotels. There are digital programs that will help you find the article of clothing that meets your personal style profile.

But you don’t hear a lot about robots working security. The San Jose Mercury News reports that space-capsule-shaped K5 is walking, or rolling, the beat at the Stanford Shopping Center, out near the university bearing the same name (minus the shopping-center part).

 

 

The machine, built by Knightscope of Mountain View, California, has been deployed in a “handful” of places the Mercury News reports.

And why not?

The sight of a robot rolling around the mall is the ideal symbol of the human and machine partnership that is growing in importance in retail and e-commerce. As the Mercury points out, the K5 isn’t meant to handle all security functions at the mall. Instead it supplements the human security force, which relies on its cameras and microphones to pick up on signs of trouble. It also has the potential to act as a deterrent to those with bad intentions, Knightscope’s CEO told the Mercury.

And hey, the thing is only paid $7 an hour, according to the Mercury, though you apparently have to deploy them two-at-a-time. A bargain, nonetheless

Spooning on a dollop of Ikea innovation

Ikea

 

The newest Ikea pop-up shop is something like what retail is going to look like in the future. OK, maybe not the whole tapping-the-wooden-spoon thing, but there are certain elements in the Toronto shop that just make sense.

The store carries only 50 items that shoppers signal they want to buy by tapping a wooden spoon on the shelf on which the items are sitting, Internet Retailer reports. When they get to the checkout, they tap the spoon again and, after making any edits to their order, an Ikea worker hauls the stuff out from the back.

The store specializes in kitchen products, hence the spoon thing, and relies on RFID to make the magic happen. The store has a display offering kitchen cabinets and appliances, Internet Retailer says, and it allows visitors to shop via virtual reality, using Google Cardboard viewers.

Now, we’re not saying that this is exactly what stores of the future are going to look like, but there is pretty wide agreement that the big, traditional stores of today are not going to be the look in coming decades. The future of retail was a big topic at the recent ShopTalk 2016, for instance.

Retail experiments have been popping up (yes, we went there) for some years. Consider venerable online retailer ModCloth’s latest experiment: Taking pop-ups to a new city each month. Next stop: Washington D.C., where the women’s clothier will open a temporary showroom featuring blazers, dresses, swimsuits and bridal gowns, Washington’s Top News reports.

The idea is to browse, shop and order at the pop-up and wait for the items to be delivered. The store offers more than just a chance to browse, though. WTOP says the stores also offer one-hour sessions with a stylist.

The pop-up efforts appear to be a sign that retailers know there is an answer out there, but that they’re not entirely sure what that answer is. Look for more, and presumably more creative, experiments to come.

As retail moves into the future, online and offline will be blended more than ever and shoppers will expect the kind of convenience and personalized service and recommendations that the online world is beginning to provide more and more.  

Experiments like Ikea’s wooden spoon and ModCloth’s foray into bridal wear and the physical world are just two signs that the evolution is continuing.

Pay as you go

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As mobile traffic to digital commerce sites shows no sign of slowing down, conversions — or actual sales on mobile devices — continue to lag stubbornly.

No doubt, the difficulty of tiny keyboards and small screens contribute to the sluggish conversion growth. But mobile also suffers from a disadvantage when it comes time to pay for a purchase. Typing in credit card numbers, security codes and zip codes on a smartphone can be a marathon exercise in frustration.

But it turns out, the Pittsburgh Post Gazette reports, that consumers’ security worries represent a big blocker to mobile commerce when it comes to using smartphones to pay. The PPG cites a study by The Pew Charitable Trusts that found that consumers of all ages worry about identity theft and raids on their accounts that could result from using mobile devices to buy stuff.

Though the Gazette says Pew reported that the concerns “cuts across generations,” there is clearly an age divide on the mobile payment habit. The story says Pew found that millennials and Gen X consumers make up 72 percent of mobile payment users.

Pew says it’s up to banks and mobile payment providers to explain the safety features of their systems and to put consumers’ minds at ease.

That said, it wouldn’t be a crazy argument to make to suggest that consumers will become more comfortable with mobile payments over time. The more positive experiences consumers have making smaller — and initially infrequent — purchases on mobile, the more likely they are to use their devices again and more frequently.

And it’s wise to remember that the mobile payment industry and e-commerce retailers are not standing still. Any number of competitors are offering and working on system to streamline the payment process online, which will no doubt help with mobile momentum.

Of course, a bad experience or widespread security failure could set back the mobile conversion movement.

Mary Meeker has spoken

Mary Meeker deck

You could think of it as the “Old Farmer’s Almanac” of the tech world: Every year venture capitalist Mary Meeker comes out with her report on internet trends and let’s just say she doesn’t kid around.

Two hundred thirteen slides laying out where we all are headed in terms of technology and connectivity. Given that she works for Kleiner, Perkins, Caufield, Byer, one of the most storied firms in Silicon Valley, people and businesses pay attention.

The picture for retail: Mobile is where it’s at, but not necessarily where retailers are spending, Meeker concludes, according to Retail Dive. Meeker focuses a lot on advertising, Retail Dive says, pointing out that consumers spend 22 percent of their time on mobile devices, while advertisers spend only 12 percent of their ad budgets on mobile.

Presumably the 22 percent figure refers to the portion of media-consumption time consumers spend on mobile. (Oh, and, one small correction to the Retail Dive piece: Connect was held in Rancho Palos Verdes, which is in Southern California, not Silicon Valley.)

You can read USA Today’s coverage here.

Another big takeaway? E-commerce is growing fast. OK, maybe you knew that, but Meeker points out, via Retail Dive, that digital commerce sales have grown from 2 percent of the retail biz in 2000 to 10 percent last year.

Another fun fact: Companies are making it to $100 million in online sales faster than they once did. Meeker’s report says that it took Nike 14 years to hit the big figure in e-commerce, while Lululemon took only nine years (through sheer determination?) and Under Armour only eight. (They really stepped it up.)

But Meeker pointed out that the United States has nothing on China when it comes to an e-commerce habit.

Meeker also mentioned one of our favorite subjects: The ways in which text messaging has the potential to propel mobile in a big way. We, of course, think she’s right.

Meeker also touched on the importance of customer experience, pointing out that retailers that were once online only are wading into brick and mortar. Meeker points to Warby Parker, which Retail Dive reports has higher sales per square foot than Tiffany’s, which sells really small and really expensive stuff.

RD notes that, like Apple, Warby Parker creates a retail space where people can noodle around with products (we guess you can noodle with eyeglasses) without feeling pressure to buy. It’s all part of what we were talking about earlier. You know, retailers experimenting and such.

One thing is for certain: We’re in for some fun times as retail finds its way.

Quote of the week

“As retail evolves,” he said, “there are elements that are timeless. Today, as much as ever, our customers need us as their advocate for low prices. Smiley represents that commitment.” — Wal-Mart Stores’ Chief Marketing Officer Tony Rogers to Advertising Age on raising the profile of the retailers iconic smiley face.

Photo of Alexa courtesy of Amazon; photo of Ikea store courtesy of Ikea, screenshot of Mary Meeker’s title slide courtesy of KPCB. iPhone photo by Jason Howie and newspapers by Jon S. published under Creative Commons license.

Mike Cassidy is BloomReach’s storyteller. Contact him at mike.cassidy@bloomreach.com; follow him on Twitter at @mikecassidy.