Prize of the Machine - Programmatic Commerce
Developments in technology have always driven changes in commerce, making retailers adapt their methods. In 2016, we’re on the brink of a new digital revolution, with the rise of the Internet of Things set to transform the way we live and work. Right now, there are more than 5 billion devices connected to the internet, and by 2020 Gartner predicts that this will reach 20.7 billion. At Salmon, we predict that this development will drive a new retail phenomenon over the next decade: Programmatic Commerce.
Programmatic Commerce encapsulates a shift in consumer behaviour, with buyers allowing purchase decisions to be delegated to connected machines. Imagine the coffee machine in your kitchen not only detecting when the coffee is running low, but automatically reordering supplies according to your pre-set preferences. Or, picture the tyres on your car detecting when the tread is close to the legal limit, then sending a message to the cars’ manufacturer, enabling them to order replacements in advance. Buying and selling, particularly of routine purchases, will be transformed into an automated process, guided by artificial intelligence.
WATCH: Programmatic Commerce in action -
We anticipate Programmatic Commerce will include three major trends.
1. Technology that makes decisions - Marketers are already making use of data to achieve personalisation for consumers. Programmatic Commerce will take this one step further, replacing consideration with automation for routine purchases. Connected devices like fridges will learn consumers’ product preferences and prepare replacement orders. There will be scope for the process to be fully automated, depending on user preferences.
Consequences for marketers: Machines would be pre-programmed with brands, meaning that retailers could effectively be locked out of the ordering process. Marketers would need to engage with consumers at a much earlier stage in the process.
2. Digital assistants come of age - Consumers are becoming much more comfortable with digital assistants such as Siri and Cortana – and crucially, are comfortable with allowing them to access personal data. Currently, smartphone personal assistants can alert you to an upcoming anniversary, using personal data to provide convenience. Programmatic Commerce will take this one step further, as your assistant could recommend a gift based on its information about the recipient’s age, gender and wish-lists.
Consequences for marketers: SEO would become far less dominant in product searches, and marketers would need to ensure that products and content are clearly targeted to meet assistants’ search criteria.
3. From demand creation to anticipation - The increase in device sensors, combined with accessible personal data, will create a situation where demand can be anticipated. As above, car tyres could alert manufacturers as tread wears down, giving manufacturers unprecedented insight into likely demand. This will enable improvements in supply chain efficiency and cash flow. Manufacturers can ensure that replacements are available for consumers, and consumers can benefit from improved convenience.
Consequences for marketers: The sales and marketing department will play less of a role in creating demand for a product in the market.
Programmatic Commerce depends on one key facilitator: the willingness of the user to allow decision-making to be delegated. This change in consumer behaviour, tied with the advance in connected technology, will transform commerce. Retailers will face new challenges, in needing to form a bond between the consumer and brand at a much earlier stage in the consumer journey. But there are also huge advantages in terms of operational efficiency.
As ever, retailers who are quick to adapt and provide enhanced consumer convenience will win. Ultimately, as the Internet of Things become commonplace, business must ensure that they invest in strategy to ensure they are poised to take advantage of programmatic commerce.
WATCH: See Neil Stewart explain Programmatic Commerce at Salmon’s Commerce 2020 event -
Main fridge image source: www.samsung.com