Another alarm rings: Retail fulfillment in an on-demand world.

We now live in an on-demand world. What we want, when we want it. No waiting nor queuing.

We can all agree that on-demand is re-shaping the media industry. Netflix revenues are up nearly 3X since 2013, and the number of U.S. cable/satellite subscribers is in a steady decline—with more than a half million cutting the cord in Q4 2017.

We can all agree that on-demand has re-shaped the personal transportation industry. Uber has become a verb (“uberize”)—and the subject of hundreds of consultant PowerPoint presentations—on its way to 2017 bookings of $37 billion.

Let’s acknowledge now that on-demand is about to re-shape the art and science of retail fulfillment.

When consumption flows in-stream

We’re less than 18 months away from the calendar year 2020. Measured in technology planning, testing, and implementation time, that’s the rough equivalent of tomorrow.

By 2020, according to Gartner, about 30 percent of all web browsing sessions will be done by voice. The forecast from comScore:  50 percent.

As we grasp that, let’s keep in mind that Google will process about 2.4 trillion total searches in 2020. Bing, another 350-400 billion.

Do the math. Even when you salt the numbers with a healthy (and appropriate) dose of skepticism, that’s a lot of voice-based search. All running through AI-enabled voice assistant platforms via smartphones and smart speakers.

Hmmm.

It’s possible—downright likely, actually—that some of those searchers will be searching products or services, and some of those will move beyond search and make a purchase. According to Business Insider Intelligence, that will result in some $40 billion in U.S. retail revenue by 2022—a sum roughly equivalent to the annual revenues of Best Buy.

But that’s only one reason why this will re-shape the industry.

I find of great interest a 2016 NPD study of Amazon Echo* owners. The research company found that they spent about 10-percent more after they bought the voice-powered smart speaker than they did before.

But they also found that the total number of orders went up by six percent.

Anecdotal discussions and personal observation suggests that six percent growth in order volume is just the start. The child-like ease of voice-based commerce—and the intelligence of tomorrow’s voice assistant platforms—opens up a world of on-demand commerce for everything.

Want it? Voice it. Be reminded of it? Voice it. Need more? Voice it.

Say goodbye to the batch-processing mindset that is the shopping list.

Say hello to substantially more orders and smaller baskets per order.

Welcome to the future.

And as you arrive, say hello to the inevitable financial and operational implications of day-to-day retail fulfillment:

  • Rising costs of pick-and-pack—alongside less revenue per order;
  • “One-sie” fulfillment from store, distribution centers, and VMI suppliers alongside case-pallet management;
  • To-the-home, last-mile delivery within time-bound windows, measured now in hours and minutes.

There’s yet another alarm ringing in retail. It’s the human voice.

Can you hear it?

#IamIntel

Published on Categories RetailTags , , ,
Jon Stine

About Jon Stine

Global Director Retail Sales at Intel. Jon Stine leads Intel’s global sales and strategy for the retail, hospitality, and consumer goods industry sectors. His CV includes leadership of North American retail consulting practice for Cisco Systems, and a prior stint at Intel, where he founded the company’s sales and marketing focus on the retail industry. His perspective on technology’s value in the industry has been shaped by advisory and project engagements in the United States, across the European Union, and in India, Australia, and the People’s Republic of China, and from 15 years of executive sales and marketing experience in the U.S. apparel industry, working with the nation’s leading department and specialty stores. At Intel, his current areas of research and engagement include the future of the store in this new digital age; how and where retailers turn data into competitive advantage; the role of technology within the new cross-channel shopper journey, and, the critical business and IT capabilities that industry success will demand going forward.