Amazon's keen on both fashion and retail -- and whether those interests ever intersect could help shape the next leg of the digital retail revolution. The Seattle-based Amazon has already opened two bookstores (three more are on the way) and multiple pop-up mall kiosks. Now the endless aisle behemoth is reported to be looking at opening more brick-and-mortar outposts that could sell groceries and other items, potentially apparel. If Amazon did venture into physical retail in a more prominent way, it would follow in the footsteps of other direct-to-consumer brands such as Bonobos and Warby Parker that have ventured beyond their digital roots to meet the needs of shoppers. KeyBanc Capital Markets analyst Ed Yruma said that apparel and groceries are two categories of strategic importance to Amazon.
This week, the Fung Global Retail & Technology team was in Las Vegas to attend Shoptalk 2017, the next-generation commerce event which brings together technology and retail. One of our ongoing research themes has been the retail revolution that is currently taking place in the US and globally. With announcements earlier this week that Payless, Sears and Bebe will likely be the next major retailers to file for bankruptcy or put themselves up for sale, we believe we are still in the early stages of what will end up being a dramatic reorganization of the industry. While this means that there is still a lot of pain to come for traditional industry players, we are starting to see some of the successful next-generation strategies take shape. We picked these out from some of the companies attending Shoptalk.
According to a survey from SLI Systems, 54 percent of mid-size retailers are using or plan to use artificial intelligence (AI) as an online tool in the next 12 months. The most popular applications are expected to be personalized product recommendations, customer service requests and chatbots. The online survey of 234 e-commerce professionals primarily in the U.S., Europe, Australia and New Zealand showed that 56 percent are either using or planning to use AI for personalized product recommendations. That was followed by customer service requests, 41 percent; chatbots, 35 percent; and visual search, 32 percent. VR/AR, voice-activated apps and virtual buying assistants scored lower.In a note from late September, according to Barron's, R.W. Baird's Colin Sebastian indicated that the "overriding theme" at the Shop.org
Top executives from Target, Amazon, Walmart, eBay, Alibaba and many other innovators shared their views on the future of commerce at the second annual Shoptalk, which drew more than 5,000 attendees. Simplification, the elimination of friction, the magic of mobile devices and the evolution of shopping were recurring themes through the first several days of Shoptalk. "Our members absolutely love Scan'n Go," Iannone said, explaining how it allows members to avoid the checkout line and simply show their mobile receipt as they exit the building. "It has helped drive frequency and sales and has been a really helpful innovation for us." As is the case at Sam's Club, Target Chairman and CEO Brian Cornell shared a retail world view that envisions the seamless integration of physical and digital.
Not only are online retailers competing with other online stores and brick-and-mortar locations, but also the overall noise that is the Internet. We live in a world where consumer attention span is getting shorter and shorter: 40 percent of people abandon a website that takes more than three seconds to load, and the average shopping cart is abandoned more than 68 percent of the time. I'm hard pressed to find an ecommerce site that is not constantly scrambling to engage more and drive more sales. Technology is finally helping with those efforts in a big way. Artificial intelligence (AI), which has demonstrated its value in industries like marketing, healthcare and finance, is now making a splash in online commerce.