The Next Big Thing In Retail – Programmatic Commerce

Young business woman holding mobile phone and credit card. Woman pays for a purchase with credit card and looking in camera. Purchase and shopping online. Business infographic

The IoT, nonetheless, has been hailed as the foundation for modern day              e-commerce. As major supply chain players scramble to adjust and adapt to new windows of opportunity, yet, a new uncharted matrix frontier is unveiled – the Programmatic Commerce. The feature, supposedly, will maximize the customer’s convenience by minimizing unnecessary time spent on shopping chores, in an age where time is gold (despite the dropping price). Ladies, gents and alike; welcome to the age of matrix programming.

“Programmatic Commerce” is an electronic commerce feature where the consumer’s repeated consumption of goods and/or services is analyzed and taken over by the application to, with consent, automatically make the same decisions on their behalf. Per Salmon, a global commerce service provider, it is “where consumers and businesses allow technology to make purchase decisions on their behalf based on pre-programmed parameters and learned preferences.” Billions and billions of devices are connected to the internet today, of which the total number is expected to twenty-fold by 2020. The accumulation of data collected as a result thereof along with consumers becoming comfortable with their data being collected, millennials in particular, all build the case for Programmatic Commerce to earn a spot in App stores in the close future.

By having the your preferential parameters predefined through electronic devices, imagine waking up in the morning’s and having the coffee machine remind you that roasted beans are running low, a re-order has already been placed, and the delivery is scheduled to arrive in 20 minutes. Imagine also that the same application can take place with fresh food in the refrigerator based on the specified expiration date, with grocery list verification from the smart device before leaving home, and have grocery bags filled up in the trunk of your car upon leaving work. Thus, routine mundane decisions are left to the IoT, including grabbing the lowest price and discounts out there, as well.

Gartner found that the IoT will be key to growth in 2020, where Big Data, or in this case, vast pools of machine-generated data (sensors and transactions) and personal data (profile information) are collected to be analyzed computationally to reveal patterns, trends, and associations, especially consumption behavior and related interactions.

Collected data are queued for calculation and predefined algorithms used to replace the actual customer’s decision making. Thus, the rise of Programmatic Commerce. Repeat purchases of consumer goods/services present a key opportunity for retailers as customers today demand convenient simple non-redundant purchasing processes at a bargain. Uber’s success could be related to IoT-based convenience as well.

The marketing technique that base campaign design on consumption data analysis, or data-driven marketing, is applied to both online and offline shops to customize products and services on a case-to-case individual customer basis. Thus, unsurprisingly, repeated sales take place on a swift and regular basis with the application of artificial intelligence (AI) and electronic assistants that have become a key factor contributing to our decision-making process.

Optional purchases are reduced to qualifying items according to analyzed data, for instance, upon an online purchase, we can choose between similar items in the same price range from alternative stores. This process will become the new norm for product/service searching in the long run, with reduced influence from SEO and PPC search engine results. Access to the customer’s personal information will determine business opportunities. More so, electronic assistants will obtain data from various sources, thus, searches will change from requesting for information to recommending information.

All of the aforementioned factors, they be IoT or access personal information, will have major impacts on marketers in determining existing consumption behavior and patterns and therefore trends that reveal shifts in demand and overall consumption attitudes. Pushed marketing campaigns designed to stimulate a demand will gradually give way to pulled data-driven marketing that is synced to real time consumption that makes recommendations, instead. Customers will be locked-in with single brands while marketing increasing focuses on emotional premises. Applicability and functional usage will replace price as the main inducive factor for decision making. In the foreseeable future, Quantum Computing breakthroughs, with processing power that exceeds the fastest super computers and most sophisticated algorithms today, are expected to coalesce with the IoT and Big Data to shape necessary grounds for Artificial Intelligence (AI). Thus, even more breaking applications in retailing will arise that present, yet, even more mysterious windows of opportunity for businesses and most importantly, Logistics – an official key IoT component. Businesses and operators that want to be able to cope with change, will most certainly need to adopt business and operational models that embraces change and flexibility, and will be best equipped to weather change, and therefore, sustain growth over this long period of transition and transformation. Follow up on the latest trends in logistics and business trends with SCG’s article“Supply Chain and Logistics Trends 2016”.

Compiled by BLOG.SCGLogistics
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