Ecommerce is known for its waves of innovation. From the rise of pure-plays to the advent of multi-channel and subscription commerce, we’ve seen the category disrupted more than once.
Now, a handful of innovations are vying to again change how we buy as these technologies move from the emergent to the mainstream. Augmented Reality (AR) got off to a slower-than-expected start but appears to be gaining steam. Artificial Intelligence (AI) is rapidly shedding its dystopian baggage to find a home in countless applications. And voice-first design for smart devices? It’s a thing.
Each of the three is affecting commerce in its own unique way: one more behind the scenes, the others far more in (or literally on) your face.
Seattle is the epicenter for smart voice-first design.
While Amazon won’t release specific Echo sales numbers they did claim that sales last holiday reached the millions and that the Echo Dot and Fire TV stick were the best-selling products in any category at Amazon. In other words, they sold a lot. An SNL parody is usually an indicator that you’ve arrived.
However, despite Alexa’s popularity, we’re still early in our understanding of how voice-enabled assistants and voice-enhanced designs will impact our lives, to say nothing of our buying habits. Google, Apple, and Microsoft aren’t exactly asleep at the wheel with large investments being made. While the Apple HomePod and Google Home have a lot of ground to make up, each has its own ecosystem to leverage.
With Amazon at the forefront a lot of attention is going toward commerce, but most numbers show that few of us are shopping on our Alexa devices. Alexa’s shopping limitations are obvious. You can’t browse what you cannot see, making it hard to shop by voice.
We take for granted how valuable in-person interactions are for unpacking meaning. Conversations contain a lot more than voice alone, including non-verbal cues, gestures, and, importantly, retained context. For all the innovation packed into a voice assistant experience, they are still best served for binary-like requests. This doesn’t mean that commerce is crippled however.
Voice assistants are great for buying what you already know.
The potential for replenishment-based orders where brands, quantities, and price are already set is great. The Amazon Dash button set the stage for this and there’s little doubt, at least on behalf of this prognosticator, that what little sales are made via Alexa, most are of a replenishment nature.
Amazon isn’t going to be content to rely on replenishment purchases alone. What’s to prevent your Alexa from sending some selections to your Fire, laptop, Echo Show or smart TV? A voice-enhanced shopping experience could let you shop without tapping or clicking: “Alexa, send some Puma sneakers to my TV. Now, show me more options in blue.”
By pairing voice-driven UI with screens you get a powerful experience that’s dead simple for consumers. Add in intelligent recommendations based on AI-enhanced personalization and you can see how two emergent areas can work together, creating experiences that are not only great for consumers (ease, personalization), but are also great for retailers (high conversion, low touch).
Aside from obvious challenges such as lacking visuals, voice design faces another hurdle. It’s getting smarter all the time, but consumers likely don’t know it. Without visual cues to announce a new feature, users will go uneducated, locking them into the cohort of capabilities they were introduced to.
While the interaction modes for voice-enhanced designs have yet to be fully cracked, the real enhancements in voice experiences, particularly those with commerce applications, might just be tied to another emergent area – AI.
Artificial intelligence is the future that’s here now.
The truth is AI has already arrived and is affecting what you buy. Google and Facebook employ AI in their advertising algorithms, leveraging it to optimize campaigns to bring buyers and sellers together. Other Seattle-based companies like Whitepages leverage it to send fraud flags to online retailers.
Many ecommerce companies, like Amazon, currently use recommendation engines to suggest related products. But these early uses are just the start of tapping AI’s retail potential. Even Amazon seems to know that, and is now testing a more advanced machine-learning based recommendation feature called Scout.
So, like it or not, AI is influencing your buying decisions. Additional opportunities abound. Subscription commerce is particularly ripe, especially that focused on product curation and sampling. The frequent repeat nature of a subscription service lends itself particularly well to AI. Your steady stream of preference data is all the fuel it needs to generate smart recommendations.
In this regard, Stich Fix is ahead of the curve using a combination of data sources including Pinterest board image scanning, style quizzes, textual customer feedback, and more. Its AI-driven recommendations are then passed onto a human stylist for final approval and the personal touch – a note to the subscriber.
It’s not hard to see how the Stitch Fix approach could be applied to other verticals. Got a new apartment? Hire a bot to decorate your living room with a look that matches your style, budget, and square footage. Have an existing piece you like? Just upload a photo of it so it’s factored in.
Outdoor retailer The North Face is already partnering with IBM to improve their shopping conversion rates. While you browse, Watson is profiling you. You didn’t think they built Watson just to compete on Jeopardy, did you? Target, in a partnership with Pinterest, now accepts user uploads of furniture so they can match your sofa to appropriate end-tables and chairs.
The partnership possibilities are endless. What’s to stop Samsung’s smart refrigerators from partnering with Instacart to order you more eggs before you’re out? Your smart car could contact Filld to gas up your car while you sleep. After all, you were nearly empty and had a long commute on your calendar.
Look behind the curtain and it’s easy to see how AI is already changing how we shop. You can be sure that anything that helps retailers sell more things, more efficiently, is going to see lots of investment.
Augmented reality still seeks its commerce breakthrough.
Perhaps the most over-hyped emergent tech in ecommerce is augmented reality (AR). AR was supposed to change how we shop by revolutionizing the experience both in-store and in-home. Initial applications appeared fraught with issues, either producing gimmicky PR stunts or buggy experiences. Consumer interest in virtual try-on capabilities actually fell between 2013 and 2014. Has the hype and promise worn off or have we just not seen the right execution?
For in-store experiences, Nike just might be the front runner. Their augmented NikeID experience empowers customers to digitally customize the look of their shoes. Customers start with a white shoe as their canvas, place it under a special light rig, and then customize the look on a digital display. The digital display is then projected onto the shoe giving them a custom look.
These shoes can then be created on site using Nike’s custom manufacturing process. It’s a cool blend of augmented reality with a bit of maker culture thrown in. Nike gets great PR saying the product was built in the U.S.A. and customers get their visions brought to life. While the NikeID experience has an indisputable cool factor, not everyone has Nike-like resources and budgets.
Fortunately for AR enthusiasts, Apple has a solution. Looking at in-home experiences, furniture is the killer use case. Multiple retailers and stylists are vying for the ideal experience by leveraging Apple’s ARKit made available in iOS 11.
Both Houzz and Ikea launched offerings last year. Based on preliminary numbers it looks like Houzz might be sitting on a winner. Its app lets you place thousands of items into the room of your choosing. The key difference here is that the objects are more lifelike than ever as the app accounts for lighting and textures. Ikea’s version, IKEA Place, leverages similar capabilities.
Buzz in AR for digital retail has been around for years. The use cases have been there, but until the advent of the ARKit the tech just wasn’t ready. If Houzz’s numbers are to be believed — that users who use the app are 11 times more likely to purchase — then we’ve likely reached an inflection point for AR in ecommerce.
Better alone, or better together?
AI has had the most impact to date, but it does its work more behind the scenes and is not something we’re likely to perceive directly when it’s done well. Its potential as a conversion driver is incredible, both in connecting shoppers to brands and in getting them in front of the right products. However, AI applications extend into operations to improve how items are picked and shipped. Look beyond the physical and AI can even help create new digital content, pointing out opportunities to develop or recommend content that shares certain desirable attributes; Netflix is a prime example.
AR has been lingering for years and oozing potential, but the technology just wasn’t there until now. It has a definite “wow” factor which will no doubt help convert customers, but its potential in commerce is likely governed by how many use cases truly benefit from its inclusion.
Interactive voice-first design is the most nascent of the three; it’s more suited for replenishment orders than actual browsing and shopping. However, with the might of Amazon behind it, and more devices and Alexa skills emerging every day, you can be confident it too will change how we shop.
Perhaps the largest impact will come from not one of these advancements, but in how they are combined. AI has the potential to address some of the shortfalls of voice-only design through smarter recommendations and improved conversational negotiation. Likewise, AR experiences could be greatly enhanced by voice inputs.
One thing we know is that change comes in waves in ecommerce. We’re not cresting yet, but early indicators are that each of these advancements will change the face of how we shop for years to come.
About the author: Alex Berg is the CEO of Fell Swoop – a UX design firm in Seattle. Prior to Fell Swoop Alex held leadership roles with Ritani, Expedia, and Blue Nile. Follow him on Twitter @alexwberg.