Automation, personalization in retail can exceed consumers’ comfort: Oracle

Time-poor consumers are increasingly seeing the value in personalization, but even with this greater acceptance of the use of their data, retailers still need to be careful not to cross the line into "creepy" targeting.

A new report from Oracle finds that while consumers are excited about certain technological advances in retail, other inventions leave them uneasy. As retailers look to adapt to the increasingly digital landscape, they should take into account consumers' comfort levels with automation and artificial intelligence.

"Luxury brands have a leg up on traditional retailers as they are more focused on protecting and consistently executing on their brand promise," said Jeff Warren, vice president of strategy at Oracle Retail, Minneapolis, MN.

"This consistent brand experience is necessary to facilitate deeper consumer engagement that can facilitate deeper personalization and customization through new technology like 3D printing and virtual reality," he said. "Ultimately we believe retail will need a strong store associate to drive a personal experience for consumers but we will see new technologies drive traffic to stores."

Oracle’s “Retail in 4 Dimensions: Understanding Customer Behavior in an Age of Relativity” is based on a July survey of more than 15,000 customers in key markets across the globe.

Purchasing profiles
Oracle’s report lays out three different shopping personas prevalent today. While these are presented as personalities, the agency points out that a single shopper may fit into more than one profile, switching between the behaviors based on the situation.

The Nomad is an omnichannel shopper whose purchase path traverses the bricks-and-mortar store, social media, ecommerce and more. This consumer finds inspiration in a number of places and will use the method of purchase that makes the most sense to get a particular product into her hands.

Oracle found that 42 percent of those surveyed shopped both online and in-store on a weekly basis. These shoppers are particularly interested in cross-channel services, such as checking inventory on a mobile phone will in-store or returning online purchases to a bricks-and-mortar location.

While online shopping and automation are impacting the retail business, in fashion, the physical store experience is still of interest, as shoppers want to be able to see and feel items in-person. Fifty-five percent of consumers browse fashion in-store every week, while only 40 percent browse online weekly.

Online is growing, but in-store browsers still outnumber those on ecommerce. Image credit: Saks

The Nomad also values convenience, making seamless shopping another way to win their repeat business as she collects the latest fashions or beauty products.

Beyond the purchasing experience, the returns process is considered when consumers desire ease. More than eight in 10 consumers want free return shipping on online orders, while 34 percent want the return window to be longer than 30 days.

Unlike the Nomad, the Player is seeking a combination of brand and tech-driven experience in his shopping experience. In the retail environment, this may manifest in virtual try-on experiences, while ecommerce orders delivered by drone would pique the interest of this shopper online.

Among all consumers, almost half would like to see some kind of virtual experience for trying on apparel. Automated features such as auto-replenishment and 3D printing are also of interest to consumers, with 48 percent and 43 percent intrigued by these possibilities, respectively.

While auto-replenishment is supported, consumers want control over what is sent. For example, a third of respondents are hesitant to have a grocery store deliver items based solely on purchase history, but 40 percent would be open to having a store suggest a shopping list, allowing the consumer to choose what to actually buy.

This tactic has been adopted by the beauty industry, with brands such as Lancôme and Estée Lauder offering the opportunity to automatically resend regularly used products.

Estée Lauder allows consumers to automatically repurchase products. Image credit: Estée Lauder

The Dealer is on the hunt for the best price, which means she will gladly give up her information to receive promotions. While 87 percent of consumers said they would usually be willing to give up their email address for an offer, around a third said they would always share their contact details in exchange for a promotion.

About half of consumers also value targeted deals based on their loyalty data or what they are currently looking for.

When personalizing the user experience and marketing communications can be an effective way to cater to consumers, retailers need to be careful that they do not overstep boundaries. Consumers are more apt to approve of retailers using the information they have provided to them, while third-party data such as social media is less accepted.

Convenient commerce
Automation appeals to consumers in certain aspects of the retail experience, with 47 percent looking forward to automatic checkout in the future. Solutions such as self-checkout or mobile payments that get shoppers out the door in a more streamlined manner also appeal.

Online, 57 percent also want one-click checkout.

The patent held by Amazon for its 1-click payment technology expired Sept. 11, meaning other online retailers can begin implementing similar convenient checkout systems into their own digital marketplaces.

For luxury brands looking to take advantage of the growing hunger for ecommerce, 1-click purchasing should be an interesting prospect. The technology allows customers to quickly make purchases without having to go through complicated forms and confirmations, leading to a smoother online shopping experience (see story).

Moda Operandi incorporated Amazon's 1-click payment system. Image credit: Moda Operandi

When it comes to technology, virtual reality appeals to consumers’ desires for a more engaging shopping experience, but elements of virtual assistants may cross a line.

While a number of retailers have rolled out smart fitting rooms, adding a robotic assistant to these spaces would be considered creepy by 39 percent of consumers.

The Fourth Industrial Revolution is bringing about rapid change, forcing both consumers and companies to adapt at a challenging pace, according to the CEO of GDR Creative Intelligence speaking at the National Retail Federation’s Retail’s Big Show on Jan. 17.

Whereas innovations during previous industrial revolutions moved humans from manual labor to more cognitive tasks, the fourth includes disruptive technology such as artificial intelligence that threatens to take intellectual jobs away from humans. The “Retail Opportunity for the Fast Changing World and the Human Mind” session uncovered predictions as well as opportunities and challenges for retailers during this time of change (see story).

"Creating a single view of how a consumer engages with a brand is critical to pursuing these three personas," Mr. Warren said. "We have a strong belief that cloud infrastructure is critical to innovative a better experience for consumers by removing the time and cost associated with maintaining legacy systems and enabling IT teams to collaborate on new projects.

"With a single view of how a consumer engages with a brand, retailers can create more targeted and personalized incentives to reward loyalty and repeat purchase behavior from an omnichannel perspective."