A huge proportion of UK consumers are ready for the next stage in digital retail: completely automated purchases managed by machine with no action from the shopper needed, termed Programmatic Commerce, according to new research. The study, from Salmon, suggests retailers must prepare to offer Programmatic Commerce as consumers welcome digital and fully automated services. […]
A huge proportion of UK consumers are ready for the next stage in digital retail: completely automated purchases managed by machine with no action from the shopper needed, termed Programmatic Commerce, according to new research.
The study, from Salmon, suggests retailers must prepare to offer Programmatic Commerce as consumers welcome digital and fully automated services.
Programmatic Commerce represents the next era in digital shopping using connected devices, which has already been signalled with the UK launch of Amazon Dash. Programmatic Commerce takes it a step further than Amazon Dash however, where goods would be ordered by a smart fridge and delivered before shoppers even know they’re needed.
For example, a coffee machine might re-order the owner’s favourite coffee when supplies run low with the shopper simply entering price limits, preferred brands and other options into the system on initial set-up.
The key stats from the report found that:
• 57% of UK consumers say they will be ready for this automated purchasing within the next two years, with 13% of those being ready now
• More than half (58%) of shoppers say they’re more likely to opt for a smart technology if it would enable this kind of shopping
• Consumers would be most comfortable ordering household supplies (54%), food and drink (54%) and beauty, healthcare and personal hygiene products (34%) through Programmatic Commerce
• If consumers were setting preferences for their devices to use when ordering items, most would prioritise cost above other considerations (50%). Only 25% would prioritise items’ brand
• 60% of consumers would not be willing to pay any kind of fee for this kind of system, however 41% would pay more money for a smart device if it allowed for automated purchasing
• Consumers’ main concerns would be lack of control over purchases (54%), followed by the security (51%) and privacy (51%) of their personal data
The survey of more than 2,000 UK consumers found more than half of respondents (57%) will be ready within two years to use a system that orders items automatically, with 13% being ready for this now.
Programmatic Commerce involves internet-enabled devices making smart purchasing decisions based on owners’ predefined preferences. For example, a coffee machine might re-order the owner’s favourite coffee when supplies run low with the shopper simply entering price limits, preferred brands and other options into the system on initial set-up. Programmatic Commerce represents the next era in digital shopping using connected devices, which has already been signalled with the UK launch of Amazon Dash.
The research suggests that shoppers recognise the great potential of smart technology for their retail experience. Consumers already use digital channels – from online shopping to mobile – nine times a week on average, with over half (53%) citing the main advantage as being that tech has “made the shopping process easier and more convenient.” Shoppers see the same potential gains in automated purchases, naming time-saved (37%), convenience (25%) and money saved through automatic selection of the cheapest products (37%) as the main possible advantages.
“The rise of digital has been the single greatest change in retail over the past decade. Consumers have wholeheartedly embraced online shopping services for the convenience, time-saving and enjoyment they can bring,” said Neil Stewart, CEO of Salmon. “While we expected consumers to already appreciate the benefits of digital, we have been pleasantly surprised by how ready they are for automated shopping. Our research paints a picture of a sophisticated and engaged consumer, ready to take advantage of the impact of smart technology in their digital shopping.”
The smart technology needed for Programmatic Commerce is becoming more common in British homes. Around a third (35%) of consumers either already use a form of smart tech in their home or plan to do so within the next 12 months. Importantly, 58% of consumers say that when they need to replace a device like a fridge in the future, they would be likely to opt for a smart technology option if it would allow them to use automated shopping.
Consumers have clear preferences about how Programmatic Commerce would operate:
– Consumers would be most comfortable ordering household supplies (54%), food and drink (54%) and beauty, healthcare and personal hygiene products (34%) through Programmatic Commerce
– If consumers were setting preferences for their devices to use when ordering items, most would prioritise cost above other considerations (50%). Only 25% would prioritise items’ brand
– 60% of consumers would not be willing to pay any kind of fee for this kind of system, however 41% would pay more money for a smart device if it allowed for automated purchasing
– Consumers’ main concerns would be lack of control over purchases (54%), followed by the security (51%) and privacy (51%) of their personal data
“Connected devices are growing at an incredible rate, with 26 billion expected to exist by 2020,” continued Neil Stewart. “The possibilities that these devices can offer in retail are astounding, from fridges ordering weekly groceries to cars ordering replacement tyres when they are worn down. We have already seen consumer appetite for purchases through connected devices in the launch of Amazon Dash, and Programmatic Commerce will take this further. Brands, retailers and manufacturers must prepare themselves for Programmatic Commerce, both through technology advances and through the partnerships to bring these services into British homes. Consumers will embrace the convenience of Programmatic Commerce, and those that offer it first will reap the advantages.”
In reaction to new research launched by Salmon John Pincott, managing director, EMEA, Kibo,said: “Being a success requires retailers to oil the brakes to the check-out at every step of the shopping experience.
“Making the mundane as simple as possible so consumers can spend more time doing what they enjoy is a crucial factor in ecommerce. Consumers typically swap between multiple channels before making a final purchase and any experience which decreases this ‘friction’ will grow the chances of a retailer making the sale. Automated purchasing actually takes this pain-point away for retailers in an instance and is a clear area for R&D.
“Many companies fight a never-ending battle of abandoned shopping carts as customers get cold feet or abort due to frustration with the user experience. Although automated purchasing through connected smart devices is a little way off yet, it’s clear the appetite from consumers is there. Technologies such as one-click purchasing, launched by Amazon in the UK this week, prove that making the customer journey as simple as possible is crucial in securing the sale and creating a competitive edge.”
Read the full report here
About the study
The study into consumers’ attitudes to Programmatic Commerce in the UK was commissioned by Salmon and carried out by independent research consultancy, Censuswide. 2,000 UK consumers aged 18-64 were interviewed online during July 2016.
Source: www.salmon.com
