Switching on to programmatic commerce
A new research study from e-commerce consultancy Salmon has claimed that “a huge proportion” of UK consumers are ready for what it describes as “the next stage in digital retail”: programmatic commerce, which involves internet-enabled devices making smart purchasing decisions based on owners’ predefined preferences. According to Salmon, its 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”.
With “programmatic commerce”, devices like printers will detect when they are running low on ink and then automatically order new supplies; or fridges can send an order to be restocked with foods that are running low, and it will take into account the consumer’s favourite brands and price limits.
The report is a timely one: earlier this week, Amazon announced the UK launch of its Amazon Dash button and the Amazon Dash Replacement Service (DRS).
According to Salmon: “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.”
Neil Stewart, the CEO of Salmon, added: “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.
“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 study suggested that UK consumers have clear preferences about how they would like Programmatic Commerce operate.
According to Salmon: “Consumers would be most comfortable ordering household supplies (54%), food and drink (54%) and beauty, healthcare and personal hygiene products (34%) through Programmatic Commerce.”
Their main concerns – predictably – centred around the lack of control over purchases (54%), followed by the security (51%) and privacy (51%) of their personal data. The survey also produced these interesting statistics: “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.”
The study also included this insight: “Almost three-quarters (71%) of those surveyed said that they feel automated shopping is of greater benefit to retailers and manufacturers than it is to consumers.”
The Amazon Dash launch suggests that programmatic commerce is starting to move, and Salmon believes that the momentum is now building fast.
“Connected devices are growing at an incredible rate, with 26 billion expected to exist by 2020,” predicted Stewart.
“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.”
Click here to download a copy of the Salmon report, Rise of the Machines: Programmatic Commerce and the Digital Revolution.