Is search about to get too good to be good for retail?
Tech refinements presented at Shoptalk are based on the idea that shoppers know what they want. But discovery is sometimes more productive when it's inefficient.
LAS VEGAS — At Shoptalk, several players — retailers like American Eagle, social media companies like Pinterest and tech juggernauts like Google — have all been working to refine the starting point of the online shopping journey: search.
Search is a tricky pathway, where imprecise language can fail to yield helpful results. When it comes to shopping, that means a frustrated customer and a lost sale. As shown at Shoptalk in various demonstrations Tuesday, voice and images could provide solutions by helping consumers communicate what they're searching for. It's yet another example of how tech, with its ability to identify where inefficiencies are and to measure the extent, is changing retail.
As Anshuman Taneja, American Eagle vice president of digital product and user experience noted at a Shoptalk session Tuesday morning, demonstrating how image-based search delivers information on products including price and other attributes, "Site searchers know pretty well what they want."
The goal is to bring up in a search the results that best match desire. That sounds both good and obvious: It stands to reason that retailers should make it as easy as possible for customers to find what they want. Grocery shoppers know where in the store to find the vegetables and where to find the milk. Footwear shoppers know to look at the various styles of sneakers on the wall and how to locate socks. Furniture shoppers walk around showrooms and sit on couches.
Online shopping is more difficult, executives noted, and search is its gateway. That has made it a preeminent tool for retailers selling online. In essence, well-designed search fosters informed decisions. "We only buy what we know," Bob Phibbs, CEO of the consulting firm The Retail Doctor, said to Retail Dive at the conference. "Everyone's telling you that it's all about becoming frictionless at checkout. But retail is a messy business. Why is it online returns are six to seven times higher than in store?"
Some developers believe it's because, as refined as it is, search remains inadequate. Whether typing their parameters, or increasingly voicing them or looking at images, shoppers throw out words and hope for the results they want. Retailers hope that ends in a sale (and not a return). Google President of Retail Shopping and Payments Daniel Alegre outlined to a Shoptalk keynote audience how far search has come and how rapidly it's improving. The idea, he said, is to "remove friction" and "drive action." Google has been a gift to retailers: In the last year searches to find whether retailers are "open now" or "near me" rose 300%. Shoppers also Google price, where they can buy what they're looking for and half are inspired by images.
Streamlining that journey isn't necessarily always in a retailer's best interest, though, according to Doug Stephens, author of "Reengineering Retail: The Future of Selling in a Post-Digital World."
"It is true that our lives are increasingly being governed by algorithms. Facebook tells me who to like, Spotify tells me what to listen to, LinkedIn tells me who to connect with and Amazon (and increasingly Instagram) tells me what to buy," he told Retail Dive in an email. "There are tremendous efficiencies in this and I find myself buying more and more things from platforms like Instagram."
But something is lost, too, he also said. "The increasingly programmatic and often latent nature of the products that are being algorithmically served up to us online is actually raising the value of truly serendipitous discovery and surprise in the offline world," Stephens said. "The data-driven nature of many online recommendations actually winds us into tighter and tighter circles based on what we've already purchased, as opposed to expanding the realm of possibilities. For these reasons, the sheer joy of discovering a remarkable little retail shop with remarkable products is something that is becoming more prized in my opinion. The most amazing purchases are often the things we didn't even know existed, much less that we had a need for them!"
Most sales still take place in stores, so "it's not a matter of being good at getting customers to click 'add to cart,'" Phibbs said. "Most of online is unprofitable and if it wasn't for venture capitalists, hedge funds and the stock market many of the brands speaking at Shoptalk wouldn't be here."
Pinterest seems to be taking all that to heart — and to algorithms. Amy Vener, retail vertical strategy lead at the social media site, compared the company's approach to fostering online search to the wonderment she experienced at the holidays as a child at Dayton's department store in Minneapolis. Pinterest, using visual-based discovery based on machine learning, aims for a level of "experiential compelling experiences" found in stores, she told a Shoptalk audience on Tuesday. "The consumer wants to do more than just transact," she said. "We have traditional ways of being able to target people and personalize their experience based on their zip code or based on their gender or based on their age, but taste is a signal that we haven't explored as a retail industry as well as we should."
Pinterest is unabashed in setting as its goal the kind of joyful discovery found in stores, although stores would also do well to remember that it is their forte, and an advantage against e-commerce, Stephens said. "Retailers with the capacity to curate unique assortments of products or to sell their assortments through a uniquely crafted experience will maintain a solid competitive position relative to online competitors," he said.
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