Traditonally when we think of retail, we often think of the long queing time, tones of selections and hands full shopping bags. In fact, the drawbacks like the above factors really caused a decline in the whole retail industry. ‘Retailers shut 2,700 shops in first half of the year’ (BBC News, 2019) in 2018 and the collapse of retail giants such as House of Fraser has demonstrated that now the online digital retail is really taking over the high street shopping.
Let’s look at some figures, the average person in UK spends one year, two weeks and a day of their lives stuck in shop queues according to a report by Box Technologies and Intel. (Studholme, 2018) After 9 minutes, shoppers are likely to give up queuing and leave empty handed.
If we turn our heads to the digital retail world and have a look at two examples of benefits:
Product Recommendation
- More potential revenue for retailers. For example, more than 35% of all Amazon sales are generated by their referral engine. (Rejoiner, 2018).
- The constomers review feature (if it’s a good 5 stars review!!) may lead to a higher sale on products.
- More related suggestions would let the consumers to stay on the webpage longer and view more pages. Research has shown that the number of page views which showed is positively related to higher repeat purchase rates by consumers. (Panagiotelis, Smith and Danaher, 2013).
Chatbot
- Giving customers 24hrs online service, which increases customers satisfaction.
- Reduce the cost for retailers on customer service.
- Better products information can be delivered to customers unlike human only have certain amount of memory.
Given the two brief examples, we can look forward to the future of the retail industry. Not long ago, the new idea about the ‘New’ Retail was introduced by Jack Ma, the founder of Alibaba. He introduced a brand new Hema store, which is a grocery store that combined both the digital online retail and the traditional retail. One of the reasons is customers would like to pick the products, like fresh food themselves. The high tech equipped Hema store has features including price optimization bar code, which varies according to the live time market price, the facial checkout system and even has a connected Hema store canteen, which can cook the food that picked by customers instantly and all served with robot delivers. As more and more of these new shops poping up, we are entering in a new era of retail and we should better be prepared to get us use to communicate with the new digitial tools!
Reference
BBC News. (2019). Retailers ‘closing 14 shops a day’. [online] Available at: https://www.bbc.co.uk/news/business-46142025.
Studholme, J. (2018). How to use technology to reduce queues and increase sales. Retail Sensing. Available at: https://www.retailsensing.com/people-counting/sales-queue/.
Rejoiner. (2018). Amazon’s Recommendation Engine: The Secret To Selling More Online. [online] Available at: http://rejoiner.com/resources/amazon-recommendations-secret-selling-online/.
Panagiotelis, A., Smith, M. and Danaher, P. (2013). From Amazon to Apple: Modeling Online Retail Sales, Purchase Incidence and Visit Behavior. SSRN Electronic Journal.
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