Technology The Key To Fighting Amazon Say Experts As US Retailers Shut Up Shop
The impact of Amazon, and a move by retailers to open new stores as a means to deliver growth is having an impact in the USA with major retailers retrenching staff and closing stores.
In Australia retailers preparing for the local launch of Amazon are taking note, several have allocated new capital for investment in online and instore technology. JB Hi Fi is swet to announce a major technology initative shortly.
Lowes a key partner of the Woolworths owned Masters and Walmart the biggest retailer in the US are now moving to invest in online at the expense of retail stores.
Earlier this month during a visit to meet retail technology partners in New York five national retailers announced store closures among them Macy’s, JCPenney, Sears and Nordstrom.
Lowes who recently exited the Australian market after their partnership with Masters collapsed announced 2,400 layoffs.
“We are all aware of how quickly the retail industry is changing,” Niblock wrote recently. “Advances in technology and the competitive landscape continue to transform how customers are shopping and their expectations of us. In this environment, it is imperative that Lowe’s continue to evolve”.
Target stores, who are already struggling in Australia with speculation mounting that current operators Wesfarmers could close the local operations to concentrate on their K Mart operation said recently that Amazon is “cannibalizing” sales in the USA.
Also, set to cut hundreds of more jobs is Walmart. This follows the laying off 7,000 employees in September. Currently Walmart is working with Webcollage to grow their online sales with the expansion of their content delivery system across both Walmart and Sams Club.
Macy’s which is the equivalent of Myers in Australia recently laid off 6,200-employees.
They are also set to “eliminate layers of management” and cut 3,900 sales associates, as the department store shutters 68 of its 730 locations this year and shifts more resources to digital.
“We continue to experience declining traffic in our stores where most our business is still transacted,” noted chairman/CEO Terry Lundgren.
“Our omnichannel strategies continue to evolve based on the changes in our customers’ shopping behaviors, including a focus on buy online, pickup in store and mobile-enabled shopping.”
Giant US retailer Sears Holdings and JCPenney confirmed this month that it would close an additional 150 stores, consisting of 108 Kmart and 42 Sears locations.
JCPenney, which recently improved sales via a return to major appliances is also restructuring their operation to better compete with Amazon and changing retail habits.
Analysts claim that they will close 300 of its approximately 1,000 stores, CNBC said last week.
Other retailers are scrambling to find a way to keep consumers shopping on their sites and in stores.
The trick claim retail online partners are? Strong content, personalisation, via data and tech.
Sunglass Hut is employing deep learning and image-recognition technology from San Francisco-based Sentient Technologies Holdings Ltd. for its e-commerce site. When a shopper clicks on a pair of shades, the “see similar styles” option uses image recognition to show other sunglass choices, instead of predicting what the person might want based on what other people have purchased.
Several retailers including Target and Walmart have recently moved to expand their Webcollage content system to deliver product comparison information for shoppers. This technology allows a retailer in partnership with a supplier to deliver information on their own products or Vs a competitor’s products.
Personalization “is the Holy Grail,” says Salesforce Commerce Cloud Chief Executive Jeff Barnett, who works with brands including L’Oreal and Under Armour.
With online pricing and inventory easily accessible, consumers are increasingly becoming brand and retailer agnostic.
This has seen retailers turn to new technology for everything from artificial intelligence to data to draw consumers in.
The problem for retailers both in the USA and shortly in Australia is that Amazon has been investing in technologies like these for years, aiming to make it easy to find items and click buy.
The big online retailer who is tipped to launch in Australia in September 2017, has been customizing and refining its site for shoppers for years using deep learning and artificial intelligence—something it touted at its Amazon Web Services conference late last year.
On its retail site, that technology enables better search results and recommendations for customers, among other benefits.
One piece of technology allows them to automatically track pricing on a competitor’s web site and then adjust their pricing to come in under a competing retailer.
Tech providers are filling that gap for other traditional retailers that don’t necessarily have the means to do the same.
Even the smallest changes online—facilitated by artificial intelligence and algorithms—can make a difference in sales, retailers are discovering.
According to the Wall Street Journal Sentient’s technology can run multiple tests at once.
Italian lingerie brand Cosabella gauged customer response to change the colour of its “buy” button to pink and its banner to specify it is Italian family-owned, bumping up revenue by 38%. It is also using image-recognition technology like Sunglass Hut, tailoring its website to individual customers based on the advertising image they click to get to the site.
“I don’t think AI will eventually take over everything, but it will rationalize some of what we do,” said Cosabella CEO Guido Campello.
Retailers are also customizing the shopping experience in stores, where around 90% of U.S. purchasing still takes place.
Technology giant SAP SE is working with retailers on technology to help identify customers and their likes and dislikes as soon as they walk into a store, creating more of a shopper experience, said Lori Mitchell-Keller, global general manager of consumer industries.
For example, Burberry Group who recently expanded their store presence in Australia, can ask for a customer’s name and type it into an app when the person walks in, giving access to personal data, including his or her last purchase and whether the person prefers still or sparkling water—and potentially some of his or her public social media presence, too.
“If they understand you, they know how to interact with you and how to advertise to your likes,” said Ms. Mitchell-Keller.
Analysts and technology specialists, claim that the problem in Australia is that it is unclear how willing some retailers are to embrace something that goes beyond basic online shopping.
They claim that the introduction of algorithmic search recommendations and true customization requires retailers to let go of control over some aspects of the shopping experience, says Ken Seiff, managing partner at early-stage retail technology venture-capital fund Beanstalk Ventures and a former retail executive. “It’s probably the single biggest lift that retailers could get if they actually embraced it.”
Tracy Issel, general manager of world-wide retail at Microsoft, says she sees signs that retailers are diving in. She points to retailers such as Nordstrom’s discount Rack chain, which is now piloting in-store beacon technology that will direct shoppers to express checkout lines or alert them when a fitting room opens via an app on their phone with Bluetooth turned on.
“Digital transformation is upon you whether you want it or not,” Ms. Issel says.