The short version? They see all the retailer touch points that validate those market shifts and trends. Today, they’ve worked with over 10,000 retailers, brands, and distributors, achieving an estimated $13+ billion in Gross Merchandise Value in 2016. CommerceHub CEO, Frank Poore, shared his thoughts on just what those trends that are happening right now — impacting both consumers and businesses alike.
The early stages of this can already be seen with voice-ordering capabilities like Alexa and Amazon Dash, but Frank suggests that the evolution will be significantly deeper. Anything consumer purchase that is consumable and satisfies a specific need will be on auto-pilot. The consumer will be removed from the purchase decision for consumables like toilet paper, paper towels, undershirts or razor blades. These items will automatically replenish as the product itself recognize it’s time to reorder.
Physical retail will be less about facilitating the pickup of a product and more about providing unique experiences. Frank shared an example where you imagine yourself as a customer walking into a Nordstrom and using augmented reality to try on clothing in a virtual representation of the wedding you’re attending next week. Retailers will win by knowing their customers better than their competitors and providing differentiated experiences. The key, however, will be making the experience so immersive that the customer wants to come back, instead of just a ‘cool’, novel feature that is only tried once.
Much of the future of retail will be invisible for the consumer but will be manifested in lower costs that are only possible with truly agile and fluid supply-chains. With automated replenishment of consumable goods retailers can more effectively leverage just-in-time inventory. When replenishment is managed by the items themselves, demand can easily be predicted, which reduces storage costs for the retailer and eliminates supply chain complexity.
Frank asserted that the days of retailers carrying a curated assortment online are over. With drop-shipping, there is no physical limitation to the number of products a retailer can carry online. The challenge is only to select products that are consistent with the retailer’s brand image. The most effective way to build out an assortment is through an AI-influenced algorithms that analyze the product assortments of competing retailers and relevant brands, and then compare those products to the demographic profile of a retailer’s customers to select the products most likely to appeal to their customers.
The distinction between retailers and brands is going away. Frank shared that they already see brands partnering with other brands to sell each other’s products and retailers building multi-billion dollar private label businesses. In the future, consumers will make purchases from one party and the fulfillment of those orders will be bid upon by other parties, including retailers and brands. Algorithms will optimize for lowest fulfillment cost and fastest delivery in real-time, which could result in one retailer taking an order that is fulfilled by another, potentially competing retailer, which is closer to the consumer.
With immersive shopping experiences already here and around the corner, it’s an exciting time to be a modern customer. Businesses will need to heed the trends in order to deliver experiences that will soon become the ‘convenience’ standard.