Marketing Case Study Analysis on Future of Shopping

Question

Task: Please take some time to view the following four videos (at least twice) on the future of shopping.

Video 1.Alibaba’s New Retail Experience (5mins) https://www.youtube.com/watch?v=336YkwayCD4
Video 2. Retail 2020: 5 Technologies (6mins) https://www.youtube.com/watch?v=iRvaWHk3A8k
Video 3. Supermarket 2020: A vision of the future (4mins) https://www.youtube.com/watch?v=z6Ezl-_jhzU
Video 4. Location Based Marketing (3mins) https://www.youtube.com/watch?v=UC5vB7wLXcA

Now answer the following 4 questions through this marketing case study:
1. Does the huge growth in ‘online shopping’ really mean the extinction of the traditional ‘high street’ store…or can they successfully co-exist?

2. Discuss the 5 ‘New’ technologies outlined in video 2 and explain the advantages and disadvantages of each technology.

3. In video 3 we see Symphony Retail’s vision of Supermarket 2020. Discuss what your Supermarket of the future would look like and what it should contain/not contain.

4. We are told that Location-Based Marketing is about connecting people, places and media (Video 4). What are the ethical considerations around businesses knowing every ‘place’ we visit?

Answer

1. Can traditional high street shopping can coexist with the huge growth of the online shopping
Traditional high street shopping is facing a slump in recent times due to the unimaginable growth in popularity of online shopping; lots of people are moving towards the convenience of online shopping owing to lack of time for going to shop physically. Some countries have not updated their grocery shopping experiences and are still dependent on traditional shopping but tech giants like Amazon and Alibaba have changed the face of the online and in-store experience for the consumers. Alibaba’s supermarket Hema in China has revolutionized the online shopping experience and the in-store experience is the best in the supermarket chain (Alibaba.com., 2021). Hema was first conceived in 2015 with only one store and with the success of its store, it has created several stores in multiple cities and the store has many facilities that are lacking in high street shopping. The online website delivers the products anywhere as soon as possible to maintain its loyal customer base (www.youtube.com, 2021). Many people want to visit Hema to experience the store of choosing fresh foods. It also offers fresh fish and meat as well as processes it for the benefit of the consumers and they also provide a dining experience at Hema. The online stores recommend the foods meant for health-conscious customers as well as people addressing different dietary needs, which influences the consumers to buy them.

Fig 1: Alibaba supermarket Hema
Source: (Wu et al., 2018., p.80)

High street shopping on the other hand is a boring shop with no recommendations and often lacks competitive advantages. The fulfilling center at Hema delivers the best of the products at reasonable prices. The store delivers quickly within a 3 km radius to its consumers and also mentions the out of stock items and recommends alternatives, while the online shopping provides free delivery at any distance, given the total amount of purchase exceeds a pre-fixed amount by the concerned company, like 20 GBP for super-saver delivery in Amazon, UK. All the product details and ingredient lists are also provided if the product is scanned. The store has its digitized payment mode called the Alipay and the traditional market has the payment mode either in cash or card which is lagging far behind. It has been researched that Amazon does not need any checkout queue or anything, which is a contrast to the high street shopping experience and is much more preferred by the customers.

Amazon utilizes the face recognition app and enables one to access the store with the customer’s account credentials; these facilities are slowly declining the popularity of the traditional market system. Hema markets do not have separate warehouses, fully automatic fulfillmentcenters with helpful employees who provide a world-class modern supermarket experience to the consumers. Not only Alibaba but also other supermarket chains are improving their experience with the integration of offline and online markets into one. With the current world situation of the global pandemic, online shopping has become a necessity rather than a luxury and if at this rate the online shopping and offline shopping experiences at supermarkets improve, high-street shopping may cease to exist and can become obsolete with time.

2. Advantages and disadvantages of the 5 new technologies outlined in the 2nd video.
Retail shopping has been changing at a very fast rate, and with the present pace, it may change within the next 10 years. The advantages and disadvantages of the 5 new technologies can be enlisted as follows:

Beacons technology
Advantages

• With the help of proximity data, Beacons technology helps the brands to allow personalization of their marketing and segregate their customers.
• Geo-targeted messages a unique feature of the Beacon technology increases the open rate for the companies which compels the people to open their message because of the relevancy.
• The setup is easy and the technology is very cost-effective in nature.
• The beacon technology not only increases the in-app sales but also increases local sales. The technology drives the traffic of the shopping tools for the promotion of the nearest physical location.

Disadvantages

• Access to one's data without informing can put off the consumers. Marketing promotions should be done according to the preference of the consumers.
• Bluetooth technology is the most important aspect of beacon and if anyone does not enable one’s Bluetooth the technology remains dead.
• Installed brand apps can help beacon technology to communicate with the consumer’s device. Macy’s has already implemented the use of Beacons at their store.

Fig 2: Facial recognition
source:(Lionbridge AI. 2021)

Facial Recognition
Advantages

• Face recognition can help the shopper shop without the fear of having to save any personal banking data.
• It is a cost-effective technology with no additional tool required.
• A lot of time is saved by facial recognition. Shops at Amazon have eliminated the ques and checkout processes and one can come and buy the product and leave without any hassle (www.youtube.com, 2021).

Disadvantages

• Face recognition is still not a reliable source many people with the same facial structure may get away and brand promotion to different individuals may create confusion in the customer base.
• Lack of regulation in the AI system can be misused and data of thousands of people can be misused for one's benefit.
• Proper rules should have to be maintained for proper biometric systems. The lack of it may disrupt all sectors.

Robot assistance technology
Advantages

• Robot assistance technology can assist in different local languages set by Artificial intelligence and algorithms.
• The assistant has a 3D scanner that identifies the products and helps in navigating the isles to direct to the product.
• The robot can arrange a video conference to answer any query beyond its knowledge and checks the price, out-of-stock products, and low stock with arrangement for more improved recommendations.

Disadvantages

• Very expensive technology with few tasks
• Restricted programming tools with no variations
• Requires high maintenance cost with time-to-time program development (www.youtube.com, 2021).

Smart mirrors
Advantages

• Smart mirrors do not need any changing rooms one can use the virtual image imposition tool and can see for oneself how it looks.
• It may help consumers to upload the picture on social media to get reviews from their friends and families.
• Oaklabs fitting rooms are made with these concepts with customization in shape cut and size and the product is delivered by the sales staffs using big data

Disadvantages

• Not a cost-effective option
• Artificial intelligence might not understand the specific body type
• Not a time-effective option.

Auto checkout
Advantages

• Robot support and interactive displays help in the auto check-out process.
• The items are automatically scanned and the amount is charged from the account.
• Faster option than traditional checkout processes.

Disadvantages

• No human interaction and no smiling greeting may put off some consumers.
• Robot support may have programming problems which may result in a loss for the company.

3. How symphony shopping retail experience will change the face of shopping at stores and what things should it contain.
Symphony is an AI-enabled retail supermarket that has completely changed the face of the shopping experience in the supermarket. The store mainly works in the retail sector with an improved shopping experience. The chain has made a strategy that should be included inside the supermarket. It mainly works in some countries in Europe and Northern America (Symphonyai.com. 2021). The store has analyzed that pantry loading at the grocery stores has declined and online shopping has increased exponentially.

The layouts of the conventional grocery stores are likely to change in near future, giving way to a more developed and thought-out layout, for the benefit of the customers. The supermarket of the future should have a customer-centric shopping experience which is an important aspect of retail marketing. The future shopping center should possess a plan which may help grocery shopping for the future and create innovative plans for the supermarket of the. Convenient shopping and the multi-channel has created a scope for reimagination for the future. The modern and fresh market has given way to the reduction in sales at traditional grocery stores. Click and collect areas are expected to increase radically within the in-store and drive-thru facilities in the future retail stores, while the in-store dining and food court would allow the customers to dine and shop simultaneously, which will make the shopping experience more relaxing and fun, in the future. Click and collect stores beside the driveway will save time, especially for the shoppers with a busy lifestyle and thus, increase sales while popularizing the service offered. A pharmacy should be beside the click and collect and the in-house dining area the retail shop will enable the customers to dine and shop.

Easy navigation to the small sections of the store should be prioritized and farmers’ markets should be laid to provide fresh produce from regional markets with farm access (www.youtube.com, 2021). QR code has been devised to get the information about the products. The restaurants at the supermarket should have healthy options at the restaurants in the supermarket and pre-cooked meal kits should be provided. Customers can scroll the products at the touch-screen tabsprovided at the dine-in table, using their loyalty cards, to know about the products and purchase them, which would be both convenient for the customers and help them save time, while being beneficial for store management as well, since it will allow for effective crowd control. Pet stores should be beside the pharmacy for convenience. The promotions and discounts can be gone through at the touch-screen pads the whole dining in and making purchases through in-house touchpad scrolling. Click-and-Collect services as well as in-store pickup and delivery and arrangements for a special product aisle, within the layout of the future stores. Twice a week assortment changing can surprise the customer for a better experience within the special product aisle in the store. Lastly, the checkout should be fully automated with self-checkout and other AI-based tools should be provided to avoid checkout ques and arrangements. The drive-through options for smaller orders and loading dock options for larger orders have been planned for the future retail industry.

4. Location-based marketing connects different people and media. What are the ethical considerations around businesses knowing every place visited.
Location-based marketing is a comparatively newer initiative wherein the customers are tracked through their smartphone’s location and the offers in the nearby stores are projected to them, as a marketing initiative. The smartphone brand or the application provider constantly gets the location update from the things done and uses the information for marketing and advertising purposes. Google and Facebook get the location information to advertise the products of interest and also enables them to meet new people having similar interests (Myshadow.org., 2021). The presence of over 3 billion smartphones globally, allows for the establishment of a strong network of trackers through which the location of each of the smartphone users can be tracked efficiently, all throughout the day. In the year 2019, around 88% of the brand markets utilized the location data for targeting the customers effectively, and around 71% of the targeted customers responded to the LBM initiatives and changed their shopped brand from one to the other, thus, depicting the success of the process (www.youtube.com, 2021). Around 96 Billion USD will have been invested in location-based marketing initiatives by the end of 2021. The enthusiasts of LBM initiatives are majorly millennials, which accounts for 57% of the population, followed by 46% of adults with kids and 40% of the individuals who have their incomes in the range above 150K USD.

There are some ethical considerations the business needs to maintain to not misuse the location information. Privacy and securities of the individuals need to be maintained properly and proper consent is needed. An individual should have proper consent on the products and information and services of interest. The brands are targeting potential customers through location data and increasing their sales. Though there is nothing wrong with targeting the customer through locations but the privacy breach should be avoided to handle the misuse of data of location (www.youtube.com, 2021). Hackers may get the location details from the brand database of an individual and can track different individuals to make unethical market promotions and may endanger a user's bank credentials and other important documents.

Various fake websites have collected the data from the location database and have used it for their benefits endangering several customs private data and money. There should be proper laws and legal procedures to control and manage the data proposition of the GI location and the RFID information system should be regulated by the responsible governmental organization. GPS is a revolutionary application for understanding the road routes and important centers but one should be careful about the ethical use of the system. Many crimes have been committed based on the location of different individuals including cyber crimes and other criminal activities. It is advisable to not provide location information to all websites or applications only the trusted ones should have the information. Many terrorist attacks have also been planned based on location activities and some important locational information has been hidden from the public to protect the confidential information and misuse. The retail industry has been flourishing due to locational benefits but there should be proper regulations to maintain the trust of the consumers.

Reference:
Lionbridge AI. 2021. What is Facial Recognition - Applications & How it Works | Lionbridge AI.

Available at: [Accessed 9 April 2021].

Alibaba.com. 2021. Sturdy And Spacious supermaket - Alibaba.com. Available at: [Accessed 9 April 2021]. Symphonyai.com. 2021. Symphony AI. Available at: [Accessed 9 April 2021].

Myshadow.org. 2021. Location tracking | Me and my Shadow. Available at: [Accessed 9 April 2021].

Wu, X. and Gereffi, G., 2018. Amazon and Alibaba: Internet governance, business models, and internationalization strategies. In International business in the information and digital age. Emerald Publishing Limited.P.70-88

www.youtube.com, 2021. Location Based Marketing 2020. Available at: https://www.youtube.com/watch?v=UC5vB7wLXcA (Accessed: 9 April 2021).

www.youtube.com, 2021. Retail Stores of the Future: Supermarket 2020. Available at: https://www.youtube.com/watch?v=z6Ezl-_jhzU (Accessed: 9 April 2021).

www.youtube.com, 2021. Retail 2020 | 5 Technologies that will change the way you shop. Available at: https://www.youtube.com/watch?v=iRvaWHk3A8k (Accessed: 9 April 2021). www.youtube.com, 2021. Alibaba's "New Retail" Explained. Available at: https://www.youtube.com/watch?v=336YkwayCD4 (Accessed: 9 April 2021).