Are consumers ready to use automated purchasing tech on a wide scale?
At the Internet Retailer Conference and Expo in Chicago, Ken Cassar, principal analyst and vice president at Slice Intelligence, shared findings about the current state of purchase automation, with some big insights into what drives customer adoption of these services and how brands and retailers should think about leveraging them into the future.
“For most of us who started purchasing in the early days of e-commerce, it was really about [price and selection],” Mr. Cassar said. “Over the course of time we’ve found out that that changed. The importance of convenience really rose to the top.”
Mr. Cassar explored the popular subscription model for automated CPG replenishment — services like Dollar Shave Club — noting that the most cited source of consumer frustration with the model is a lack of control.
Amazon Dash buttons offer a fix for this, giving customers convenience alongside control of the order. But despite 2.2 million Dash buttons being sold, the device hasn’t reached ubiquity. Mr. Cassar noted that 52 percent of Dash buttons purchased in 2015 had not been used once by April of 2017. The buttons also greatly favor the most popular brands that offer them.
Mr. Cassar discussed vendors exploring other takes on automated purchasing. For instance, Gillette’s shave club allows members to replenish items by text message.
One difficulty CPG vendors are facing in the space, according to Mr. Cassar, is in shipping. With 60 percent of CPG customers ordering between one and three items, automated purchasing services take an unsustainable hit on shipping costs. Finding a way to incentivize queuing items in the basket will be critical to making the next generation of auto-ordering and replenishment services economically feasible.
With smarter voice-activated AI, sensor-based replenishment, new wearables and in-automobile voice assistants on the horizon, Mr. Cassar gave advice to brands attempting to navigate automated purchasing in the near future.
“Put yourself in the shoes of the consumer,” Mr. Cassar said. “Think through every step, from the detection or anticipation that they need a product, to the purchase through the delivery. Think about ways you can reimagine that process to deliver more and more convenience to consumers.”
DISCUSSION QUESTIONS: What methods of auto-ordering and auto-purchasing will be most successful in giving users more convenience while also giving them more control of their orders? How can retailers and brands incentivize customers to queue items in auto-purchasing baskets to bring down shipping costs?