AI and the Internet of Things are clearly influencing retail as a whole, but what effect can it have on FMCG in particular? Alison Martin, marketing and communications director at Kantar Worldpanel, provides the answers
Innovations like Amazon Dash and the Echo Dot represent the starting pistol for a greater integration of artificial intelligence (AI) into our everyday lives.
While it hides under the guise of convenience, this clever marriage of AI and the Internet of Things (IoT) is much less about what devices can do for the individual – the output – and much more concerned with what increased user interaction – the input – can do for the wealth of data held by the companies who own them.
As machine-learning becomes standard for these in-home devices, every word spoken to digital assistants Alexa, Google Home and now Apple HomePod, means insight mined, behaviour learned and marketing better optimised.
These speech recognition tools are developing fast and can make shopping digitally simpler, more personalised and intuitive. Visual discovery is another way consumers can discover new brands; image recognition is smoothing out the purchasing experience.
The Taobao platform in China has a camera device within the app. If consumers see something they like, they take a picture and – a few seconds after – will have a list of products ready to buy. The Pinterest Lens app works similarly: point the camera at a product to search for it online.
Simultaneously, technology like Amazon Dash is offering shoppers goods quite literally at the push of a button. Rather than remembering – and perhaps more often than not, forgetting – to buy everyday goods like toilet roll and bleach, it can be ordered in an instant as soon as it runs out. This automation of the shopping experience means that customers don’t really have to think about shopping at all.
The world’s leading technology companies – including Amazon, Google, Facebook and Apple – are shifting our expectations of what’s possible; helping people find products at their moment of need. As a result, retail is becoming more about how we experience everyday life rather than an event in itself. The key to success is understanding how to seamlessly blend into the consumer’s life in an easy and non-intrusive way.
But what does that mean for FMCG brands?
With these retail landscape changes, it’s clear that consumer choice and brand relationships will still feature in everyday life.
Automation might remove some individual choices, but that makes it even more important for brands to understand what motivates consumers to influence those fewer, but perhaps bigger, decisions that they make.
Here, ultimately, the challenge is to make your brand the obvious choice before someone even starts thinking about shopping the category. Brands need to go beyond the utility offered by sensors, machine learning and cloud computing to create a meaningfully different experience that is woven deep into lifestyles, not just shopping trips.
Somewhat counter-intuitively, AI actually gives brands the opportunity to personalise the customer journey like never before. While it’s currently little more than a marketing gimmick, AI provides a chance for the personalisation trend to stretch beyond packaging, to pack size, flavours and delivery format. The scope of this is huge: retailers can use AI to predict demand and set prices.
However, moving from on-demand to predictive commerce and products is the real challenge that retailers and manufacturers face next. The biggest threat is whether the bricks and mortar retailers can keep up, changing their old ways of behaving to become more intuitive and adaptive in line with this new world.