From 2017 until now, in November 2019, the closure of brick and mortar stores in the US – like Toys “R” Us and Macy’s, for example – may seem to suggest a downturn in retail. However, disruption is happening right there – the online retail segment has grown by 105% in the same period. Building on the momentum, e-commerce giants like Amazon continue to innovate by embedding artificial intelligence into their use cases and expanding their business into developing countries where brick and mortar stores are still the order of the day. This disruption being experienced by the Retail Commerce industry is quite similar to what we saw in the movie rental space – an industry ruled by Blockbuster Inc. until the early 2000s was overtaken by digital content providers like Netflix in the latter half of the decade. The parallels are strikingly similar due to unlimited possibilities in the digital space.
A key part of digital e-commerce today is the shift from personalization (providing targeted content and catalog based on the users’ segments – geolocation, demographics) to hyper-individualization. In a personalized marketing strategy, each consumer is part of a segment with largely similar choices – but there will always be certain preferences that would set each consumer apart. And hence, when a segment is targeted, the individual user would not always get a relevant offer. Taking it a step forward, a hyper-individualization marketing strategy leverages artificial intelligence and real-time data to help understand true intent behind the behavior of individual users. This allows organizations to curate and deliver content, product/service offering specific to each individual user – based on factors such as past orders, social media interests, etc. It will not be long before you will be reminded to buy a smart phone after noticing your frequency of changing mobile phones and suggesting a phone with features of your interests.
For instance, in one of our e-commerce transformation discussions with an organization, the core focus was on how to make the experience personalized, once the user logs in, and display promotions based on his/her interests in a banner slide show. Once the user clicks on the banner or pauses on a particular banner to read more, an automated chat bot would notify the user on the offer, chat to answer queries and to take the user through the purchase journey without having to step out of the chat. This would give a completely personalized touch to the entire user experience, as if an agent who knows your preference quite well is helping you with placing an order. This would’ve been a futuristic use-case a couple of years ago, but not anymore.
There are still reasons for consumers to go to a physical store. Next-generation technologies like Augmented Reality (AR) and Virtual Reality (VR) are yet to reach a stage of completely replacing a shopper's experience of touch, feel, try and buy. The next logical step for retail commerce organizations would be the adoption of hyper-individualization to ensure they are enabled to ride the wave of digital disruption.