From supermarkets automating their stock systems, to consumers installing Amazon Dash buttons in their homes, auto-replenishment is a hot topic for many retail experts.
Whatever happens in 2019, retailers will undoubtedly face a difficult year ahead, but will it be the teams harnessing and investing in new technology that come out on top? We’ve asked some of the most influential experts in the retail industry to weigh in on this topic to reveal once and for all, the benefits and pitfalls of auto-replenishment.
The pros and cons of auto-replenishment for retailers and consumers
Auto-replenishment has sparked analysis from a wealth of retail industry experts, debating whether auto-replenishment is actually how consumers want to shop and spend their money, with some saying that it’s just a step too far, too soon.
Below, we’ve examined some of the pros and cons of auto-replenishment so you can make your mind up as to whether you’d be comfortable with it becoming a part of your day-to-day life.
Why auto-replenishment should be the future of retail
Natalie Berg in the Voices of Retail ebook by RingCentral argues that we no longer go shopping – we ARE shopping. In the not too distant future, Natalie predicts that our devices will shop for us automatically, without ever needing to touch a screen or to visit a store to complete the task – a complete convergence of the digital and physical worlds.
Whilst the prospect of a smart fridge might seem daunting or an invasion of privacy, Natalie asks us to imagine the time saving benefits of a self-replenishing fridge; imagine never needing to say ‘I forgot to buy milk..again’.
Zak Edwards, MD at Prezzybox.com adds another positive slant on auto-replenishment technology, suggesting that it really could provide the perfect in-store experience for consumers in this scenario:
“On your device you visit your favourite stores website. In real time, the retailer can check the stock levels of a given item using RFID (Radio-frequency identification) technology and tell you exactly how many they have left, alongside what colours, sizes and other variations, right at that very moment.”
Zak goes on to explain how this not only benefits the consumer, but the retailers too: “This level of granularity has never been possible before. For example, if an item is popular, and running out of stock, then the stock order system can automatically create a purchase order, which can then be shipped straight to the store. All of this can happen with zero human interaction.”
The brands benefitting from auto-replenishment
Interestingly, auto-replenishment appears to lend itself more favourably to some product lines than others. For example, The Packaging Digest reports that in the US, brands such as Peet’s Coffee and Ziploc see a staggering 50% of their sales via Amazon’s Dash Button. Cottonelle also reported that their Dash Button contributed to them doubling their ‘share of wallet’ in the bathroom tissue category in 2018.
Whilst this is just a small selection of brands, they must each have something in common in order for them to have got it right on the button.
Is the customer always right?
Oracle’s Consumer Behavior Report indicates that 48% of consumers place importance on auto-replenishment as part of their shopping experience and 40% would be impressed if their supermarket used data to suggest a shopping list to them automatically.
The above highlights the consumer’s thirst for automation across everyday tasks and chores, but can the retailers deliver on this?
Natalie Berg explains that in order to be able to tap into this technology-savvy customer, the responsibility is on the retailer to get this right: “The most successful retailers will be those that think like their customers, connecting the dots to create a seamless retail experience.”
Why there has to be more than auto-replenishment in retail’s future
With the positives, must come the negatives and there’s plenty to be said about auto-replenishment on this front. In Forbes magazine, Ashwin Ramasamy diseccts the tech based predictions for retail in 2019 with interesting results:
“Nearly 40% of consumers who use subscription services cancel their subscriptions within a year of subscribing as the novelty wears out.
“Subscription companies that focus on replenishment (e.g., a monthly supply of detergent) and large retailers with their own subscription services will likely experience greater customer loyalty than upstart curation-themed subscription businesses.”
Figures such as these could go some way explain why we’re not seeing as many retailers exploring the realms of auto-replenishment technology as we may have expected.
Zak Edwards takes a differing view on the potential pitfalls of automation in retail.
“I think the full benefit of this is limited to a number of behemoths (like Amazon) and to a handful of Omni-channel retailers who have a full ‘self service’ infrastructure – including manufacture – over which they have complete control.
“There’s a LOT of moving parts – all of which are completely reliant on each other. Tech, supply chain and logistics are all vital – as is real time communication between the three elements. If one of these fails, then so does auto-replenishment – which then leads to a poorer customer experience.”
Creepy or convenient?
In 2017, Walmart raised a few eyebrows with the news that they were testing a service which delivered groceries directly to the fridge in your kitchen. Using a smart-lock system, the delivery person was able to enter, unpack and put the groceries away.
Natalie Berg touches on this in the eBook, suggesting that auto-replenishment is the perfect answer to the “low-level, mundane re-ordering of household products, freeing up time to focus on more enjoyable tasks.
“Shoppers will no longer have to traipse down supermarket aisles when they run out of bleach or toilet paper. They will spend less of their valuable time buying the essentials.”
The replenishment economy
Doug Stephens founder of Retail Prophet predicts that the retail industry is actually on the cusp of an online shopping revolution:
“Retail is entering into what I call “the replenishment economy” where our cars, appliances, connected packaging and even products themselves will begin to re-order themselves and be purchased with our approval.”
Conversely, the Oracle Consumer Behaviour reveals that over a third of shoppers would find this level of automation ‘creepy’ rather than convenient in their daily lives and as such, retailers have a long journey ahead of them to challenge and change consumer behaviour.
The future of automated retail in 2019
With Q4 of 2018 being tricky for the majority of online and offline retailers, it’s even more important for the teams behind the brands to show innovation and consumer-centered thinking at the forefront of all plans.
Sunny Dhami, Director of Product Marketing for RingCentral explains that change is happening and ultimately, it’s time for retailers to evolve, or risk getting left behind.
“The investment into technology seems to be on all retailers minds but it’s how that investment is made will determine how much of a difference it makes.
“Customer experience and technology investment are the key to growth. Retailers that build the right customer experience through the integration of technology will be ones standing tall.
The jury is still out there on auto-replenishment, but what is clear is that retailers need to understand the primary needs of their customers when taking advantage of automated technology.
By RingCentral, which provides business communications system