Technology and shopper experience
How can technology increase consumer engagement and build life-long consumer relationships? ACRS advocates for the implementation of technology that supports human interaction and enhances shopping experience for long-term growth.
Only 7% of consumers have never purchased products online before.1 However, even if consumers are increasingly interacting with brands via digital means, they are still looking for engaging experiences, with 59% of consumers believing that companies are focusing too much on tech and losing the human element. One avenue in which businesses are addressing this concern is through livestreaming. Livestreaming combines online and offline retail experiences by enabling consumers to interact with sellers or streamers from the comfort of their own home. On Taobao, a Chinese e-commerce platform with livestreaming capabilities, shoppers can ask questions, interact with each other, send virtual gifts of appreciation, and make purchases directly within the same app. In 2018, Taobao generated over $15.1 billion USD in gross merchandise volume through livestreaming alone.2 Whilst livestreaming has grown rapidly in China, the trend is also predicted to expand to other countries, with social media outlets like Facebook offering livestream capabilities and e-commerce platforms like Amazon testing livestreaming and purchasing functionality.
How is Livestreaming Enhancing Online Shopping?
When online shopping, consumers face risks regarding the quality of a product because unlike shopping at brick-and-mortar shops, they cannot ask questions in real time and judge the trustworthiness of the seller. Along with being unable to inspect products prior to purchase, customers may perceive online shopping as risky.3 The real time nature of livestreaming increases authenticity and transparency as viewers can interact with the seller and get their questions answered more immediately.4 For example, ShopShops is a livestream platform which takes viewers to fashion boutiques in the US, where viewers are able to direct the streamer as well as ask the seller questions.5 This allows consumers to feel in control of the process, and become more at ease with the seller and the products.
Despite time differences and livestreaming sessions lasting 2-3 hours, ShopShops reports that they average 15,000 viewers and $8,000 in sales per event. Consumers also frequently send in-app virtual gifts to the streamers during their livestream as a token of appreciation6. This is because consumers are able to immerse themselves in the experience, exploring products as if they are in a brick-and-mortar store.5,6 Consumers are also able to treat sellers, streamers, and other viewers like friends, conversing and asking for each other’s opinions and advice.2
Livestreaming is growing in popularity. With the ability to develop trust and understanding between sellers and consumers as well as provide engaging experiences, livestreaming is a promising solution to address the human element that is lacking in current online shopping platforms.
1 Paxton, C. (2019). Source.
2 Wang, J. (2019). Source.
3 Aziz, N. (2018). Why Consumers are Hesitant to Shop Online: The Major Concerns towards Online Shopping. International Journal of Academic Research in Business and Social Sciences, 8(9), 1175–1185.
4 Wongkitrungrueng, A. & Assarut, N. (2018). The role of live streaming in building consumer trust and engagement with social commerce sellers. Journal of Business Research.
5 Stott, R. (2017). Source.
6 Li, B., Hou, F., Guan, Z., & Chong, A. (2018). What Drives People to Purchase Virtual Gifts in Live Streaming? The Mediating Role of Flow. PACIS 2018.
With almost one-quarter (24%) of Australians having voted queuing at checkouts to be their biggest grievance in supermarkets,1 7-Eleven has attempted to address this issue by opening its first checkout-free store in Melbourne during May. By substituting the traditional checkout counter for Scan-and-Go technology, 7-Eleven is aiming to create a frictionless in-store experience for shoppers.2 Using Scan-and-Go, shoppers walk in, grab what they want, scan the barcode, and checkout with their phone, bypassing the often tedious process of waiting in line at the cashier.
Queuing at checkouts are also a big issue in the US. Each year, American shoppers spend roughly 37 billion hours waiting in lines, which can cause stress and boredom. 3As a result, e-commerce company, Amazon introduced the checkout-free alternative Amazon Go. In this convenience store, sensors and cameras are able to automatically detect and scan products for shoppers. This enables shoppers to walk in, make their choices, and walk out within minutes, increasing convenience and saving a significant amount of time for shoppers. 4 For retailers, there are also benefits including less congestion and more space for products, better inventory management, lower labour costs, and better allocation of staff. 5 But whilst the focus has been shifted to increasing convenience and efficiency, have retailers overlooked the importance of interpersonal experiences for shoppers?
A desire for human interaction
Humans are emotional creatures who desire human interactions.5 One Amazon Go shopper recounted that they felt that they were missing something when they were unable to “exchange pleasantries with a cashier”.6 These types of interactions are able to create unique experiences, which have become almost habitual for many shoppers.
Self-checkout systems are a similarly autonomous retail innovation. However, customers unfamiliar with the technology have shown a preference for traditional checkout methods as well.7 With full reliance on mobile apps, checkout-free stores may receive a similar lukewarm reception from shoppers due to unfamiliarity and the lack of human interaction, requiring retailers to gradually build consumer trust in the technology.
Whilst the Scan-and-Go technology is useful for low-touch, low-relationship purchases, such as ones where shoppers know exactly what they want prior to entering the store. 7-Eleven and other stores in the convenience store industry, fast food industry, and possibly even the grocery industry are built on these types of transactions, making the technology very attractive within this industry. However, in some instances, shoppers may still be looking for human interactions in-store or need to be taught how to use these new technologies. As a result, it may be a better solution to offer Scan-and-Go technology alongside traditional checkout methods.8 With technology evolving at an exponential rate, retailers may need to take a step back and consider consumer comfort whilst guiding them through to a new era of technological innovations.
1 Canstar Blue (2016). Source.
2 McIlvaine, H. (2019). Source.
3 Stone, A. (2012). Source.
4 Jacobs, K. (2018). Source.
5 Polacco, A. & Backes, K. (2018). The Amazon Go Concept: Implications, Applications, and Sustainability. Journal of Business and Management, 24(1), 79-92.
6 McNichols, J. (2018). Source.
7 Collier, J. & Kimes, S. (2012). Only If It Is Convenient: Understanding How Convenience Influences Self-Service Technology Evaluation. Journal of Service Research, 16(1), 39-51.
8 Elmas, M. (2019). Source.
How sound effects our everyday wellbeing has been of recent interest, with health researchers and city governments looking not just at reducing the negative impact of noise pollution, but tailoring sound to benefit health.1 Similarly, in the realm of retail, sound can form impactful part of a customer’s brand experience and is an often-overlooked touchpoint for retailers. An act as simple as playing music in-store can be beneficial, with 86% of Australian shoppers finding it enhances their shopping experience.2 But sound can do so much more, through the concept of sonic branding. More than just a catchy jingle or theme song, sonic branding sets the goal of creating a tangible effect through the purposeful use of sound.3
Why should retailers use sonic branding?
Chiefly, sonic branding aims to communicate a brand’s image in an instant. It encapsulates the brand’s personality and illustrates what it stands for. The sound of the brand becomes ingrained in its image, contributing significantly to brand recognition.4 Sonic branding has been found to have other important effects for retailers. Sound can be an effective brand trigger, functioning as stimuli to evoke memories of brand experiences in customers, building on and strengthening their brand loyalty.5 The emotional and sensual stimulation that music provides is a further medium through which sonic branding functions. Tailored music, congruent with brand image and self-identity, can foster emotional ties not just between the brand and the consumer, but also between consumers in the wider brand community.6 Crucially though, sonic branding needs to be approached holistically, and purposefully designed to resonate with the brand’s core values and purpose. Attempting to shoehorn in an existing piece of popular music, especially without due consideration of its meaning, may come off as inauthentic and insincere.
Who is already using sonic branding?
In February this year, Mastercard launched a new sonic brand built around a distinct and memorable melody. Intentionally composed to be flexible, the melody is incorporated into a range of Mastercard’s audio assets- from EFTPOS payment acceptance alerts, to music scores for advertising, or even the hold music from customer service.7 With the increasing popularity of audio mediums through streaming music, podcasting, and smart speaker/home-assistant use, establishing a unique and representative sonic brand and identity is now important for retailers.
1 Roberts, A. (2018). Source.
2 Mood Media. (2017). Source.
3 Beckerman, J., & Gray, Tyler, contributor. (2014). The sonic boom : How sound transforms the way we think, feel, and buy.
4 Clara Gustafsson. (2015). Sonic branding: A consumer-oriented literature review. Journal of Brand Management, 22(1), 20-37.
5 Fulberg, P. (2003) Using sonic branding in the retail environment – An easy and effective way to create consumer brand loyalty while enhancing the in-store experience. Journal of Consumer Behaviour 3(2): 193–198
6 Murphy, L., Shermann, A. and Moscardo, G. (2013) Building brands with music: Australian cases. In: P. Tschmuck, P.L. Pearce and S. Campell (eds.) Music Business and the Experience Economy: The Australian Case. Berlin, Germany: Springer, pp. 153–174.
7 Mastercard. (2019). Source.
In 2016 coffee roaster Pablo & Rusty’s opened a new location in Brisbane, one of several in their network.1 The significance of the store however, was its payment format- the location was entirely cashless, only accepting payments via card, phone-based apps, or their own range of NFC equipped smart coffee cups. As Australia’s first cashless café, it offers a glimpse at what appears to be an inevitable future. The majority of transactions by Australian consumers are made electronically, with cash only being used in 37% of purchases as of 2016.2 While still a far cry behind the world’s cashless leader, that honour going to Sweden with 2% cash purchases,3 the overarching decline of physical cash is clear.
In a speech at the 2018 Australian Payment Summit, the RBA stated an expectation that Australia would become a near-cashless society as electronic payment technologies become more convenient and widespread.4 Policy has reflected this expectation too. Since September 2017, the ACC has enacted regulations around ‘excessive’ surcharges for EFTPOS payments collected by businesses, limiting it to the actual cost of acceptance for the business.5 There are also plans to place a $10,000 limit on cash purchases in July of 2019.6 Framed as simultaneously a strategic move against tax evasion and encouraging at transition to a digital society, any purchase over that limit would have to be made by cheque or a credit/debit card.
A case for going cashless
For retailers, going cashless brings several operational advantages. No cash means no time spent balancing a till, managing a float, or taking time out of the day to make deposits at a bank. And with no cash on premises, risk of theft and other security concerns are reduced, potentially flowing on to lower insurance costs for a store.
But a cashless society isn’t without its costs
Concerns have been raised over the impact that a shift to cashless transactions would have on particularly vulnerable groups. The unbanked, adults who do not have hold a bank account, are one such group that would be adversely affected by a decline in cash acceptance. Based on the most recent World Bank data,7 an estimated 1.1% of Australians are unbanked, equating to roughly 195,000 individuals who would find themselves struggling to navigate a cashless society. The elderly, who often face difficulties in adapting to new technology, are another population at risk of being locked out by electronic payments as can already be seen in China.8 These concerns have already resulted in pre-emptive policy in Philadelphia and New Jersey in the United States, making cash acceptance a legal requirement for retailers.9
While the benefits of cashless payments for retailers are clear, with its prevalence in Australia making it practically a prerequisite for businesses here, a cashless society hasn’t quite been realised. Although its arrival is anticipated by government organisations, its effect on vulnerable groups must first be resolved.
1 Williams, H. (2016). Source.
2 Doyle, M., Fisher, C., Tellez, E. & Yadav, A. (2017). How Australians Pay: Evidence from the 2016 Consumer Payments Survey (Research Discussion Paper – RDP 2017-04). Retrieved from RBA.
3 Glance, D. (2017). Source.
4 Lowe, P. (2018). A Journey Towards a Near Cashless Payments System (Speech). Retrieved from RBA.
5 Australian Competition & Consumer Commission. (2017). Source.
6 Novak, M. (2018). Source.
7 The World Bank. (2017). The Global Findex Database 2017. Retrieved from The World Bank.
8 Mullin, K. (2018). Source.
9 Worthington, S. (2019). Source.
In late January, 7-Eleven began trialling a self-service mobile application in a Melbourne CBD branch, allowing shoppers to scan products as they shop and seamlessly pay from their phone.1 Given the continuing automation of modern life, shoppers have grown to expect to be able to complete their shopping within minutes all without having to interact with another person. Self-service checkout terminals are becoming more prolific globally, expected to reach 325,000 units by 2019,2 with some retailers like Woolworths trialling stores that are completely self-service.3 Self-service technologies have transformed the retail landscape over the past decade, with 90% ofshoppers aged 18-39 finding the technology easy to use, and 74% of 18-29 year olds preferring to use self-service checkouts where available.4 For retailers however, the phasing out of staffed checkouts has been a catalyst for consumer deviance.
Providing convenience comes at a cost
Last year, a French shopper attempted to steal a PS4 by scanning it through a self-service checkout and fraudulently registering it as a bunch of bananas.5 While an extreme case, in Australia more mundane theft costs retailers $9.3 billion annually, with the increase in self-service checkouts coinciding with a rise in supermarket theft.2 Supermarkets with self-service checkouts are significantly more likely to experience shoplifting (86%) than those without (52%).6 Additionally, consumers are more likely to steal when dealing with an inanimate system instead of a human employee, not only due to the reduced likelihood of being caught but also the removal of the human element that encourages moral behaviour.7 Consumers steal using self-service checkouts in several ways, such as registering more expensive products as cheaper ones or “forgetting” to scan an item.
How can retailers manage self-service deviance?
Retailers have many options to combat theft while retaining overall convenience. Humanising the machines that shoppers interact with has been suggested to assist in triggering moral correctness.7 Subtle details like displaying a friendly greeting or welcoming the shopper by the name registered in their loyalty card can contribute to creating a more human interaction for the consumer, increasing empathy and reducing the temptation of deviant behaviour.
Aside from creating more empathetic connections between machines and customers, there is also new technology being developed in Australia to eliminate self-service theft.Tiliter Technology has developed a product recognition system which uses cameras to automatically identify a product and enter its information into the store’s cashier system.8 In addition, some retailers are trialling new camera technologies that give a bird’s eye view of what customers are doing at the checkout, sending alerts to staff when there are attempts to cheat.9 Amazon’s innovative Amazon Go convenience store applies similar technology to eliminate checkouts entirely. Cameras and sensors in the store automatically detect and track the products selected by customers as they shop, automatically billing them when they exit the store. Amazon’s confidence in their technology’s accuracy is such that they’ve intentionally omitted any official process for shoppers to report unpaid for products that the system has missed.10 While this implementation of self-service is particularly theatrical, retailers need to fully acknowledge and be prepared to manage deviant consumer behaviours around retail self-service.
Image source: 7-Eleven
1 Briggs, F. (2019). Source.
2 Taylor, E. (2018). Source.
3 Brook, B. (2018). Source.
4 Downes, S. (2016). Source.
5 Kopp, C. (2019). Source.
6 Home Office. (2014). Source.
7 Mortimer, G. & Dootson, P. (2018). Source.
8 Dunn, M. (2018). Source.
9 Downes, S. (2018.) Source.
10 Statt, N. (2018). Source.
Kroger, a supermarket chain in the United States, introduced digital shelf technology in 2018 called ‘Kroger Edge’ into nearly 200 stores.1 Whilst currently being in the preliminary phases, the technology will eventually sync with consumers smart phones to highlight products on their shopping lists, or products meeting their dietary requirements, as they walk through the aisles through digital pricing technology. This type of technology is changing the way consumers shop by eliminating mundane shopping functions.
How else is technology influencing the retail industry?
Technological advancements have rewritten the consumer shopping experience, transforming it from being purely transactional to providing consumers with the best experience possible. “Scan, Pay & Go” systems have been in place in supermarkets since 2011 in the US, allowing consumers to avoid long check out queues by scanning all of their products onto a scanner or their smartphone, pay via the tills or app, then leave. Retailers across the world have slowly introduced similar technology to cater to time-poor customers, with Woolworths trialling their own version, “Scan&Go”, in a Sydney store in 2018. Amazon Go’s innovative cashierless store is another example of technology that has and will continue to influence the retail industry, with plans to expand the concept to over 3000 stores worldwide by 2021.2
Why do we need all of these different, new innovative alternatives?
The common element in all of these technological advancements is making the experience more convenient for shoppers. Some consumers want shopping to be “fast, simple and efficient” and preferring to be able to find the product quickly and easily over receiving higher quality customer service. The technology that is vital in providing more convenient shopping experiences is available, however retailers need to understand and adopt what they believe will improve the customer shopping experience.
1 Evans, M. (2018). Source.
2 McIlvaine, H. (2018). Source.
Chatbots are not new. SmarterChild, a chatbot on old messenger platforms MSN and AOL, was able to provide stock quotes, movie times, the weather, and even play hangman 15 years ago. Even older than this, ELIZA was an early chatbot developed in the 1960s that could simulated conversation based on pattern matching. However, they are quickly gaining popularity in present times for a few reasons.
Firstly, consumers are using fewer apps – of the typically ten apps consumers use in a day, eight of these are owned by either Facebook or Google.1 Secondly, the apps that consumers are using are messenger apps – the use of messaging apps exceeded the use of social media apps in late 2015.2 And finally, consumers want to talk to businesses – 54% of consumers said they were more likely to shop with a business that they connect with via chat.3
So which businesses are chatting with consumers?
A recent example of a chatbot was LEGO’s Ralph – a bot released during the 2017 Christmas shopping period to help shoppers find the perfect LEGO gift. Shoppers were asked a range of questions – including age, budget, and even personality – about the gift recipient, allowing Ralph to provide a range of appealing suggestions. As a result, LEGO had a 3.4 times higher return on ad spend for click-to-Messenger ads compared to ads that directed to the LEGO website. Additionally, the cost per purchase was 71% lower through the Messenger bot and purchases made from the click-to-Messenger ads were 1.9 times higher.4
Another example is Jetstar’s Virtual Assistant – Jess – who was introduced in 2013 as part of the brand’s website. However, she was recently adapted to Messenger in 2018, becoming the first point of contact for customers affected by the Mount Agung eruption in Indonesia. Uncommon events aside, Jess engages in over 250,000 conversations per month, reducing Jetstar’s response time from 17 hours to zero minutes. Notably, Jess has also achieved first contact resolution of 73% and is considered a leader in this space as no other airlines have launched a Messenger bot in multiple counties across Facebook messenger.5
The future of customer service?
The chatbot market is expected to be worth $1.23 billion by 2025.6 It is predicted that 50% of businesses will spend more on chatbot development over mobile apps by 2021.7 Chatbots are only going to grow in popularity, so businesses need to ensure they have the basics down to ensure a smooth experience for customers.
1 Perez, S. (2017). Source.
2 Aforo-Addo, K. (2018). Source.
3 Nealon, G. (2018). Source.
4 Facebook. (2018). Source.
5 Nott, G. (2018). Source.
6 Nguyen, M. (2017). Source.
7 Panetta, K. (2017). Source.
Image retrieved from LEGO. Source: LEGO.
The future is here with retailer’s trialling technological innovations such as in-store robots. However, shoppers are avoiding them. For example, earlier this year a Scottish supermarket chain employed their first in-store robot named Fabio, only to fire him after one week. Customers were actively avoiding the robot, despite Fabio’s sole purpose to assist in-store navigation and product choice to their unique shopper needs. Another example is a German consumer electronics retail chain who also found their in-store robot, Tom, was being avoided by shoppers, prompting the retailer to program Tom to dance ‘Gangnam style’ in a bid to engage customers.
Why are robots not effectively engaging customers?
One key reason for the lack of customer engagement with in-store robots is the misalignment between a robot’s design and its job description. For example, many of the in-store robots already available are designed to have round and friendly faces. However, these characteristics also make the robots seem submissive, rather than intelligent and competent, traits associated with more dominant facial types.
Additionally, 75% of global customers on average still wanted to interact with real people, and 59% of global consumers feel that the human element of customer experience has been lost by companies.1 This suggests that in-store robots should connect customers to human attendants to provide the much-needed human touch of customer experience.
1 PwC. (n.d.). Source.
Melbourne hosted its first Esports Open in September, 2018, where the top teams from Australia and New Zealand competed before crowds of between 15,000 – 20,000, according to early estimates, not including viewers tuning in via online streaming platforms such as Twitch.1 Major retailer JB Hi-Fi sponsored the event, providing attendees with a gaming zone and the opportunity to pre-order games at a lower price. Other brands such as Boost Mobile had activation zones to encourage attendee engagement.
So why are so many brands becoming involved with esports?
Esports is a rapidly growing industry, with estimates it will reach over $900 million globally, in 2018.2 And with over 380 million viewers globally, it is unsurprising that many major brands are already becoming involved in the industry. Of particular interest is the audience, with a studies in the UK, Germany, France and the US finding that 71% of esports fans were male with an average age of 26.3 The online viewership on Twitch alone, one of the most prominent streaming platforms, boasts 15 million daily active users.4 In August 2018, the most streamed esport globally, was League of Legends at 80 million total hours viewed, followed by DotA 2 at 70 million total hours viewed, of which 47 million were solely esports related.5 The audience for esports is enormous, growing, and an incredibly attractive segment.
So how have brands become involved with this audience?
One important consideration for brands when entering the esports industry is that its audience is exceptionally digitally savvy. Having grown up with and around technology, this audience is well aware of when they are being exposed to advertising. Brands that have found success in reaching this audience have done so organically, recognising the vital role of a game’s community and how to tap into that. For example, a non-native to the esports industry, Mercedes-Benz meaningfully engaged with the DotA 2 community through recognising the existence and power of a meme. While the meme was initially a satire of an announcer's comment promoting the Mercedes-Benz E-Class Sedan, the brand brought the irony to their own Twitter page, recognising the community’s reaction to the meme. Overall, the campaign was a success, with Mercedes generating more publicity from memes than from its ads on continual circulation as well as garnering the community's support of the brand’s involvement.6
Esports is a growing industry globally, with many major brands recognising its potential. Some esports such as Overwatch have developed a competition structure similar to traditional sports, providing some familiarity to brands new to the space. The esports industry is indeed something to be aware of, though brands should ensure they understand the community’s dynamics, particularly as these dynamics may differ substantially between games and genres.
1 Tchetvertakov, G. (2018). Source.
2 Pannekeet, J. (2018). Source.
3 Nielson. (2018). Source.
4 Gibson, D. (2018). Source.
5 NewZoo. (2018). Source.
6 Brautigam, T. (2018). Source.
Image retrieved from The AU Review. Source: The AU Review.