The battle for consumer’s dollars is heating up as retailers continue to come up with new strategies, designed to improve efficiency and shrug of competition. The use of robots to understand and adapt to customer shopping patterns is becoming a norm as Amazon and Walmart try to outdo each other in the race for customer traffic.
Amazon poses one of the biggest threats to Walmart’s brick and mortar business with its heavy investments to attempt to influence customer shopping trends. On the other hand, Walmart is also putting pressure on the e-commerce giant through its investment in e-commerce and emerging technologies.
So who will win the race for consumer dollars?
Walmart’s face recognition bet
Concerned by persistent decline in consumer traffic to brick and mortar stores, Walmart appears to have discovered a novel way to counter the trend. The nation’s largest retailer is developing a facial recognition technology that its plans to use to detect frustrated or unhappy shoppers.
Now Walmart plans to use video cameras at store checkout lines to monitor facial expressions. Whenever the system detects a an unhappy customer, the technology will ping employees in other parts of the store to assist the shopper as part of the new customer service strategy.
Customer service is of great importance in the brick and mortar business and retaining consumers is far easier than acquiring new ones, something that can only be achieved by improving service delivery.
Being able to respond to customer service issues would help Walmart keep its loyal customers happy and increase the chances of them coming back, instead of switching to other stores. Walmart is also planning to use the technology to analyse shoppers’ purchase behaviour.
The system under development will link customer’s biometric data with their shopping patterns and Walmart will in return be able to know the amount of money a customer is likely to spend and on which products. The data would help the retailer identify any changes in a customer purchase habit that may be caused by dissatisfaction.
Amazon’s massive e-commerce empire is one that not only continues to disrupt the traditional retail space, it also shows no signs of slowing down as its investments in logistics and products offerings continue to pay off.
While Walmart is trying to use robots and machines to increase customer traffic into stores, Amazon is planning to use similar technologies to improve its operational efficiency, to buy goods at affordable prices. For instance, Amazon successfully boosted efficiency and cut labor costs through the acquisition of robotic firm Kiva Systems in 2012 and the resulting use of robots in 45,000 of the company’s facilities.
Amazon and Walmart compete head on in drone investments
The use of drones to address customer needs is another aspect that the two retailers are paying close attention to. Amazon is believed to be planning to build a fleet of self-flying delivery drones to analyze customers’ homes while making deliveries to gather valuable information, which it can use to determine other products and services that a customer may need.
Data generated could recommend a roof repair should a drone capture a faulty roof. Drones could also recogniee if a customer’s plants or trees are dying, thus recommend the service of an arborist or a particular fertiliser.
Walmart is also betting on the drone delivery business and is in the process of testing its drone delivery service in Central Network Griffiss International Airport in Rome. The retailer has already agreed to pay $1.6 million to the county of Oneida to use the county’s air space to test the service.
The idea with the ongoing tests is to figure out how best drones can be operated in the air, alongside other aircraft. The U.S Federal Aviation Administration prohibits commercial drone deliveries as drones must always stay within operator’s line of sight. However, the agency is currently working on a new set of rules that could benefit the likes of Amazon and Walmart in future.
Amazon may be way ahead of the other retailers when it comes to the use of robots and machines, but this may not be true in a few years’ time, given the investments that Walmart is directing towards machines as it tries to counter the threat posed by e-commerce platforms.
(By Neha Gupta)