Retail brands are reeling from a turbulent 2018 and as customers continue to tighten their belts into the first quarter of 2019, we reveal the steps that retailers are taking to keep up with the pace of change.
From supermarkets automating elements of their supply chain, to consumers installing Amazon Dash Buttons and self-ordering fridges in their kitchens, auto-replenishment is a hot topic for many retail experts.
Whether you think auto-replenishment is a great time saver or a complete invasion of privacy, we’ve asked some of the most influential experts in the retail industry to discuss this topic and reveal if auto-replenishment could be the saving grace of retail.
Auto-replenishment for retailers & consumers
Auto-replenishment has sparked debate between retail industry experts, exchanging views on whether auto-replenishment is actually how consumers want to shop, with some saying that it’s a step too far, too soon.
Below, we’ve examined some of the pros and cons of auto-replenishment to better understand how these new technologies could disrupt the retail industry, for better or for worse!
Why auto-replenishment should be the future of retail
Natalie Berg, in the Voices of Retail ebook by RingCentral, argues that we no longer go shopping – we ARE shopping.
In the not-too-distant future, Natalie pictures a world where our smart devices will make purchases for us automatically, without us ever needing to touch a screen, type a letter or visit a store. She calls this ‘a complete convergence of the digital and physical worlds.’
To some, the prospect of a self-ordering smart fridge might seem like a complete invasion of privacy. However, Natalie asks us to visualise the time saving benefits of a self-replenishing fridge; imagine never needing to say ‘I forgot to buy milk…again’.
Zak Edwards, MD at Prezzybox.com adds another positive angle to the integration of auto-replenishment technology, suggesting that it really could provide the perfect in-store experience. Zak asks us to imagine this scenario:
“On your device, you visit your favourite stores website. In real time, the retailer can check the stock levels of a given item using RFID (Radio-frequency identification) technology and tell you exactly how many they have left, alongside what colours, sizes and other variations, right at that very moment.”
Zak goes on to explain how this not only benefits the consumer, but the retailers too:
“This level of granularity has never been possible before. For example, if an item is popular, and running out of stock, then the stock order system can automatically create a purchase order, which can then be shipped straight to the store. All of this can happen with zero human interaction.”
The brands benefitting from auto-replenishment
What’s interesting is that auto-replenishment technology appears to lend itself more favourably to some products than others.
For example, in the US, the Packaging Digest reports that brands such as Peet’s Coffee and Ziploc have seen a staggering 50% of their sales via their integrated Amazon Dash Buttons.
Bathroom tissue brand Cottonelle also reported that their Dash Button has helped contribute to the brand doubling their ‘share of wallet’ in 2018.
Whilst this is just a small selection of brands, they must each have something in common in order for them to have got it ‘right on the button’.
Is the customer always right?
In Oracle’s Consumer Behavior Report, almost half (48%) of all consumers placed high importance on auto-replenishment as part of their shopping experience. Additionally, 40% of those surveyed would be impressed if their supermarket used data to suggest a shopping list to them automatically.
The above statistics highlight the consumer’s growing thirst for automation across everyday tasks and chores, but do the retailers have everything in place to deliver on this yet?
Natalie Berg explains that in order for retailers to be able to tap into the wallets of these technology-savvy, millennial consumers, the responsibility is on the retailer to get this right.
Berg adds: “The most successful retailers will be those that think like their customers, connecting the dots to create a seamless retail experience.”
Why there has to be more than auto-replenishment in retail’s future
With all of the positives surrounding auto-replenishment, must come the negatives and there’s plenty of debate to be had on this front.
In Forbes magazine, Ashwin Ramasamy dissects the tech-based predictions for retail in 2019 with interesting results:
“Nearly 40% of consumers who use subscription services cancel their subscriptions within a year of subscribing as the novelty wears out.
“Subscription companies that focus on replenishment (e.g. a recurring monthly supply of washing detergent) and large retailers with their own subscription services will likely experience greater customer loyalty than upstart curation-themed subscription businesses.”
Figures such as these could go some way to explain why we’re not seeing as many retailers exploring auto-replenishment technology as we might have predicted.
Zak Edwards takes a differing view on the potential pitfalls of automation in retail.
“I think the full benefit of auto-replenishment technology could be limited to a number of retail behemoths (like Amazon) and to a handful of Omni-channel retailers who have a full ‘self service’ infrastructure – including manufacture – over which they have complete control.
“There are a LOT of moving parts in the auto-replenishment machine – all of which are completely reliant on each other. Tech, supply chain and logistics are all vital – as is real time communication between those three elements.
“If one of these three elements fails, then so does auto-replenishment – which then leads to poorer customer experience.”
Is Auto-Replenishment Convenient or a Complete Invasion of Privacy?
In 2017, Walmart raised a few eyebrows with the news that they were testing a service which delivered groceries directly to the fridge in your kitchen. Using a smart-lock system, the delivery person was able to enter, unpack and put the groceries away.
Natalie Berg touches on this in the eBook, suggesting that auto-replenishment is the perfect answer to:
“Low-level, mundane re-ordering of household products, freeing up time to focus on more enjoyable tasks.
“Shoppers will no longer have to traipse down supermarket aisles when they run out of bleach or toilet paper. They will spend less of their valuable time buying the essentials.”
Retail and the Replenishment Economy
Doug Stephens, founder of Retail Prophet predicts that the retail industry is actually on the cusp of an online shopping revolution:
“Retail is entering into what I call ‘the replenishment economy’ where our cars, appliances, connected packaging and even products themselves will begin to re-order themselves and be purchased with our approval.”
Conversely, the Oracle Consumer Behaviour Report reveals that over a third of shoppers would find this level of automation ‘creepy’ rather than convenient in their daily lives and, as such, retailers have a long journey ahead of them to challenge and change ingrained consumer behaviour.
The future of automated retail in 2019
With Q4 of 2018 being tricky for the majority of online and offline retailers, it’s even more important for the teams behind the brands to show innovation and consumer-centered thinking at the forefront of all plans.
Sunny Dhami, Director of Product Marketing for RingCentral explains that change is happening and ultimately, it’s time for retailers to evolve, or risk getting left behind.
“The investment into technology seems to be on all retailers minds but it’s how that investment is made that will determine how much of a difference it makes.
“Customer experience and technology investments are the key to growth. Retailers that build the right customer experience through the integration of technology will be ones standing tall.”
The jury is still out there on auto-replenishment, but what is clear is that retailers need to understand the primary needs of their customers when taking advantage of automated technology.
