Trending Technology for Your Tech Stack
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Even though technologies like Artificial Intelligence (AI), Augmented Reality (AR), Virtual Reality (VR), and voice are now being widely adopted, the uptake isn't as widespread or enthusiastic as it could be.
This hesitancy over improving the "tech stack" is in some ways understandable. Many businesses assume that if one strategy or platform has worked for them in the past, it will continue to do so forever, creating a reluctance to upgrade or switch to newer technologies. However, organizations with this attitude run the risk of falling behind the competition, missing opportunities, and becoming irrelevant to the marketplace.
Why It's Important to Keep Up with Technology Trends
Companies need to stay ahead of trends in consumer behavior and evolving technologies. By staying ahead of the curve, they can increase their ability to beat the competition and delight their customers.
The research firm, Gartner, Inc., acknowledges the pivotal role that technology is playing in customer experience strategies, citing digital commerce as a key way for retail organizations to acquire customers, develop relationships, drive revenue, and reduce costs.
Digital commerce, harnessing data, and technology-driven initiatives provide benefits to both operations and customer experience management. They offer retailers more ways to sell products, greater options for interacting with consumers, and the ability to differentiate themselves from the competition.
Across all channels — web, mobile, video, display, email, inventory, in-store — using the relevant technology and applying data-driven optimization in real time lets retailers convert the right people at the right time, boost sales, streamline operations, and drive brand solutions, while securing optimal impact, engagement, and performance results.
A number of innovative technologies have been making the news in recent days, each with the potential to enable retailers to extend their reach and build better relationships with consumers.
Using Chatbots And AI to Improve Operations and The Customer Experience
Successful digital marketing is driven by experience. Creating positive interactions with your consumers is crucial to driving sales and retaining customers. Chatbots are an emerging technology with the power to change the way that brands interact with consumers. It's also a technology that's positioned for rapid growth in the retail industry.
A recent study of retail brands by Juniper Networks predicts that chatbots will take away revenue from other marketing channels as the technology improves through the use of natural language processing (NLP) and artificial intelligence (AI). Figures from the report suggest that retail sales due to chatbots will nearly double each year, reaching $112 billion by 2023.
Thanks to the automation of customer sales and support processes, retailers will also see an increase in savings. In fact, retailers can expect to cut costs by $439 billion a year in 2023, up from $7 billion this year, as AI-powered chatbots become more sophisticated at responding to customers.
Research also suggests that as increasing numbers of retail brands adopt the technology, more consumers will feel comfortable interacting with chatbots in the resolution of customer service issues, as well as for making direct purchases. A customer-facing survey conducted recently by marketing firm Uberall indicates that 20% of consumers polled are "very interested" in chatbot experiences from brands, while 80% indicated that they have had "generally positive" interactions with chatbots so far.
Much of the focus to date has been on messenger bots for eCommerce experiences. Messaging-based bots can already be found in many proprietary retail apps and attached to branded Facebook Business Pages. Their remit has largely been in customer service delivery, but as they begin to improve the customer service experience across a range of industries, chatbots will be seen increasingly as a benefit both on the UX side and as a means of reducing costs.
The rise of chatbots for customer service delivery comes at the same time as a decline in the use of voice telephony for customer support. From their current rate of around 45% of interactions with customer service, call volumes at the average contact center are expected to decrease to 14% by 2022. This shift from voice-based customer service to digital is creating a space for asynchronous, messaging-based technologies like the chatbot.
AI and chatbots will continue to improve the buyer experience and lower cart abandonment at the pre-sales stage of the customer journey through personalized recommendations and predictive handling of consumer data. Post-sale, AI-powered chatbots will facilitate self-service, helping customers do research and resolve their problems more quickly.
With processes like delivery scheduling and the management of returns coming into the chatbot orbit, retailers will have to start thinking more strategically about how they automate more of their customer service operations.
Beyond the message interface, chatbots are already playing a role in-store. Systems like the Pepper chatbot assistant deployed at Mall of America during the 2017 holiday shopping season can provide an easy and interactive way for shoppers to get the information they need, reducing the burden on in-store assistants and reducing the volume of complaints.
Chatbots at physical stores are expected to play an increasing role in customer experience delivery in the coming years. Advanced search functions will enable consumers to more easily find what they need and exactly where to find it, effectively turning a store into a search engine. With help from artificial intelligence, interactions with chatbots will give retailers deeper insights into their customer base while establishing another touchpoint that powers a more personalized shopping experience.
From a practical standpoint, while it's perfectly feasible to chart a complete path using chatbots from browsing all the way through purchase, retailers should put alternative mechanisms for customer support in place. Specifically, if a chatbot receives a query or problem that it's not immediately equipped to deal with, it should be able to steer the consumer to the right path for resolution — whether that be through another sales channel or via human intervention.
Opportunities and Challenges with Voice Technology
Voice technology and "conversational commerce" are positioned to gain dominance in the retail sector, with recent figures projecting that the voice shopping market will grow to over $40 billion by 2022 — up from around $2 billion today. Much of the hype surrounding voice has been due to the uptake of domestic technologies, such as smart speakers and digital assistants such as Alexa.
Deloitte estimates that around 164 million smart speakers will have been sold by the end of 2019. Industry experts predict that voice shopping on Alexa alone could generate over $5 billion per year in revenue by 2020.
Some early adopters of voice in retail have already achieved some success. For example, in the 2018 holiday season, H&M launched a voice-enabled gift guide spotlighting their home decor collection, powered by Google Assistant. The platform enabled shoppers to browse and purchase goods using voice commands. In the customer service arena, a voice-based app developed as a prototype for Alexa enables in-store shoppers to locate the products they're looking for, and answer product-related questions.
According to a recent study of voice commerce by Adobe, around 22% of businesses have already released a voice app, while 44% of businesses are planning to do the same this coming year, with 88% of businesses looking to develop voice apps for a range of different platforms.
Voice technology gives users an alternative to using a mouse, keyboard, or touchscreen to perform activities like search, purchasing, and ordering products. It's a hands-free medium that supports multi-tasking and is often faster than other methods at getting answers and results.
With voice input available over a range of different media, conversational commerce is a wide-ranging marketing approach that goes beyond the smart speaker and voice assistant to deliver on key business imperatives like customer experience, data management, analytics, artificial intelligence, and business operations. But there's still some way to go before voice is truly viable as a business enabler.
Shopping is a highly visual experience, with most shoppers wishing to see a product before buying it — especially when there are multiple options available. Unless it's integrated with visuals in some way, voice technology denies consumers the ability to browse by sight and search for products. And since many smart speakers don't have screens, confirmations of purchase can't be displayed, which can create confusion and frustration for the consumer.
However, perhaps the biggest obstacle to conversational commerce at the moment is the slow development of voice recognition. Though sophisticated systems using AI and natural language processing can display incredible voice recognition accuracy under controlled conditions, the capabilities of the technology in the real world aren't quite there yet. Filtering out noise and being able to pick out the voice of a specific user from a crowd are essential capabilities that are currently lacking.
For conversational commerce to become more mainstream, voice technology has to evolve with improved recognition accuracy and be able to deliver more personalized results.
Using AR And VR to Drive Engagement and Personalization
With augmented reality (AR) already having realized $3 billion in 2018, virtual reality (VR) is projected to generate $1.8 billion for retail and marketing by 2022. In retail, eCommerce is poised to become the largest revenue stream for mobile AR, with 32% of brands and retailers planning to use AR or VR within three years, and 45% believing that AR and VR have the most potential to amplify their customer experience. Globally, the market for VR and AR in retail should reach $1.6 billion by 2025.
Properly implemented, augmented reality and virtual reality solutions can offer an immersive and engaging experience to consumers. Augmented reality overlays can provide customers with in-store navigation and help them find the products they're looking for. Virtual reality can take information dissemination and customer engagement to new levels by providing consumers with virtual tours of a store or travel destination from the comfort of their own homes.
AR and VR give retailers options for providing rich 3D-graphical experiences rather than two-dimensional banners in personalized marketing strategies for mobile, desktop, and web shopping platforms. Customization tools can enable shoppers to create or try out unique and personal combinations of merchandise, and fine-tune their virtual environments.
For the retailer, it's best to think of AR and VR in terms of where they should fit within the customer journey. In low-end engagement, augmented reality can tap into online knowledge bases and display information as an overlay on the label or on a product as it sits on the shelf. And the display doesn't just have to be "straight reporting." When Walmart became a sponsor of the official AR game for the movie Jurassic World, consumers could go to Walmart to access virtual supply depots in the game, containing items that players couldn't get elsewhere.
At deeper levels of engagement, AR and VR have been helping customers to visualize products in order to boost their confidence enough to complete the sale. Digital technologies are making it possible to preview how an environment or person would look with the addition of specific products and taking "try before you buy" to new levels.
This approach has been particularly successful in beauty and apparel, where retailers like the beauty technology pioneer Sephora offer magic mirrors in stores and mobile apps that help consumers see what different colors and make-up treatments will look like on them.
But adopters of virtual try-on technology need to be aware of some of the potential dangers. Using visualization to see larger products in context builds confidence in a purchase and can reduce returns. This is especially valuable with commodities like furniture or real estate, which are heavy and expensive, and sometimes impossible to ship back or return to store.
(Image source: Bloomberg)
With shoes, apparel, jewelry, and cosmetics, however, virtual try-on can build a false sense of confidence in the consumer, leading to increased returns when the real item doesn't live up to the promise of the virtual image. Often, the hardware is to blame. Browsers and mobile cameras rarely capture true color and may be misleading when trying to match fashion items to skin tones and personal preferences. In addition, while many visualization apps can collect accurate body measurements, the product data available from the retailer may not be consistent across all lines.
(Image source: Ardev.es)
One use case for try-before-you-buy which enjoys lasting success is eyewear, where color and "fit" are less important than getting a feel for a style.
(Image source: Glassesdirect.co.uk)
To create even deeper levels of engagement, retailers and brands are largely partnering with specialist agencies to create one-off experiences using virtualization technology. For example, one venue at the Aldwych Hotel chain in London partnered with Dalmore Whisky to offer a "VR whisky cocktail" — a drink served while virtually visiting the distillery where the whiskey was aged, and the barley fields and water sources used in the making of the beverage.
In the future, retailers may be able to take customer engagement deeper still, through "experience sharing," using AR and VR technology to enable individuals to share their virtual experiences with others. This might manifest through the use of avatars in virtual stores and the use of collaboration or social platforms to allow consumers to share their ratings of particular products and services.
Using Application Programming Interfaces (APIs) As Digital Commerce Facilitators
Today's consumers engage with brands via social media, wearables, smart home devices, mobile, and their connected vehicles. Whatever the medium — and across all channels — they expect their experience with a brand to remain consistent throughout.
Commerce solutions based on application programming interfaces (APIs) facilitate consistency across all of these experiences. APIs provide a common medium and can separate the presentation layer from the business logic, allowing brands to be more agile and flexible in supporting multiple digital and physical channels.
Using A Digital Experience Platform (DXP) As Digital Commerce Coordinator
A Digital Experience Platform or DXP can manifest as a single product or an entire suite of products and technologies from various vendors. In all instances, it provides a technology toolkit for creating digital experiences. A DXP enables your brand to provide and improve customer experiences across diverse channels, digital experiences, and audiences.
A good DXP should be agile, flexible and easy to scale. The platform typically combines technologies and systems designed to support specific business needs. The DXP provides the foundation for all digital experiences, as new devices and channels are "plugged into" newly defined experiences.
In evaluating and choosing a DXP, you should take stock of your existing experience requirements across different channels and devices. Walk through different customer experience scenarios, then find synergies and overlaps between vendors and the solutions they offer.
Looking Towards A "Thing Commerce" Future
"Thing commerce" and the smart home represent the next wave in the development of retail — the kind of scenario where each consumer's home is filled with objects and appliances programmed to make repeat purchases based on pre-set rules, preferences, and contexts. The experience is IoT (Internet of Things) driven and fueled by a market that is anticipated to reach 30.7 billion connected devices in 2020 and 75.4 billion in 2025.
Brands looking to become early adopters in this space should be looking at embedding sensors or touchpoints in existing products and integrating analytics to capture data. "Thing commerce" makes frictionless experiences possible, resulting in increased revenues and an improved customer experience. In addition, the information that IoT devices gather exponentially improves customer insight and can fuel personalization initiatives.
Some Best Practices for Technology Implementation
Begin by assessing your technological needs and evaluating the resources available to you. On the basis of this assessment, define an IT strategy, drilling down to the types of technologies your business needs to run efficiently, and those that will enable your organization to meet performance targets and achieve core objectives.
One of the best ways to prepare your business for adopting new technologies and staying on top of emerging trends is through flexibility. At the foundational level, this may be achieved through a scalable and adaptable IT infrastructure — on premises, in the cloud, using managed services, or through a combination of deployment models.