Apple vs. Amazon in the transformation of retail

We’ve hit peak retail

Apple is surfing the same seas as many of its competitors. As one of the world’s larger retailers, it already knows that smart assistants, chatbots, artificial intelligence (AI), data analytics, wearables, 3D printing and mobile technologies are fundamentally changing both consumer shopping patterns and retailer behavior, as evidenced in the latest Walker Sands Future of Retail report.

Shopping is yesterday

Not so long ago, if you wanted to buy something, you’d jump into the car and head down to the mall and pick something up. You might visit a few times while thinking about larger purchases, then when it came time to buy, you may have to wait a few weeks before the item was available to buy from the store. You may even need to convince a mate to help pick the item up in their truck.

Those were the good times.

These days, you see things online or at the mall because your retailer’s data analytics system has figured out what sells well in your local area, or internet tracking tech has sussed what sort of products you are looking for.

You may visit the mall to take a look at items you are interested in and then shop for them later online. You compare prices, match deals and study product descriptions on your Mac before buying a product using Siri on your HomePod (soon) or Echo speaker system.

When the delivery drone eventually delivers your purchase, you may seek tech support from a friendly chatbot, and you may engage the firm directly using social media if something goes wrong, because no one wants to use a telephone any more.

Things have changed so much

Can you see how much things have changed? Some of those technologies didn’t exist in the mass market five years ago. Incoming innovations will transform things all over again:

Think about augmented reality (AR) and virtual reality (VR); think about 3D printing; think about personalization and predictive analytics. These changes are profound and are already impacting daily lives. How much has it changed?

The Walker Sands report tells us that 78 percent of U.S. consumers own smartphones. More than a quarter of consumers own some kind of in-home smart device, such as connected appliances, lights and thermostats.

Almost a quarter (24 percent) own a voice-controlled device such as an Amazon Echo (16 percent), Google Home (6 percent). Another 20 percent of U.S. consumers plan to purchase a voice-controlled device in the next year.

That last stat will translate into excellent news for Apple Inc., I imagine. Twenty percent is a lot of sales. If only Apple had a bot-based system and AI-based voice assistant to capitalize on that, and (perhaps) a media system. Oh. It does. No wonder Amazon had a fire sale on the Echo on Prime day.

How do connected consumers shop?

So, we’re all connected consumer-somethings.

What’s really changed? The answer (according to the survey), is quite a lot. Forty-six  percent of us prefer to shop online; two-thirds of us have made a purchase using a mobile app, and more than one-in-four consumers (29 percent) always or often shop via a mobile app. Bear with me—one more statistic—it’s an interesting one. 

“One in five consumers (19 percent) have made a voice purchase through Amazon Echo or another digital home assistant, and another third (33 percent) plan to do so in the next year.

“The rapid adoption of personal assistants will only be further fueled by the introduction of Apple HomePod, quickly making voice the next frontier of commerce.”

Walker Sands also notes that millennials are even more committed to connected consumerism (my words)—they are more willing than their parents to shop completely digitally.

This is pushing retailers—including Apple and Amazon—to build direct connections with consumers.

That’s what Echo is all about. While it is part of it, it is also a lesser part of what HomePod is about—Apple is focusing that system around privacy and as a high-end music playback system.

Changes like this are why Apple’s retail stores are shops that don’t act like shops, and why Amazon is building shops that don’t act like online.

Connection is everything.

Retailers like Apple, or Amazon, need to deliver transparency, connection and authenticity 24 hours a day.

They also need to figure out how to attract, interact and retain customer relationships even when those customers want to work with them using only their voice.

“The future is now being shaped by the connected consumer and the increasingly ubiquitous nature of technology,” says Walker Sands.

The boundaries have blurred.

And within this strange new world, in which online reputation is the same as high street retail, it’s important to remember that Apple is a retail brand, surfing the same seas as its competitors. Your life has become a service industry, and the supplier relationships you choose will also define who you are.  

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Copyright © 2017 IDG Communications, Inc.

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