VPAs: The Way For­ward

SAMIR ALAM ex­plores how Voice based Per­sonal As­sis­tants (VPAs) can trans­form ap­parel e-com­merce.

Apparel - - Contents July 2018 -

A look at how Voice based Per­sonal As­sis­tants can trans­form ap­parel e-com­merce

Once again, re­tail and com­merce have ar­rived at an in­flec­tion point. For thou­sands of years pre­vi­ously, the na­ture of re­tail re­mained the same– a con­sumer would meet and in­ter­act with a seller to pur­chase goods and ser­vices. The last 20 years ex­pe­ri­enced a par­a­digm shift in this an­cient craft, as e-com­merce per­mit­ted peo­ple to dig­i­tally en­gage with re­tail ac­tiv­i­ties. But de­spite be­ing one of the new­est seg­ments in the re­tail in­dus­try, e-com­merce has con­tin­ued to evolve and change at an un­prece­dented rate.

Now, we are wit­ness­ing a fun­da­men­tal change in how con­sumers con­duct their re­tail ac­tiv­i­ties– not with a click on a screen, a tap on the phone, or a meet­ing in a shop– but by sim­ply speak­ing out loud what it is they want to their vir­tual voice­based per­sonal as­sis­tants. This is the in­flec­tion point of e-com­merce where the tra­di­tional user in­ter­faces and ex­pe­ri­ences of cus­tomers will drive for­ward the na­ture of the new re­tail econ­omy. Wel­come to the fu­ture.

VPAS AND AR­TI­FI­CIAL IN­TEL­LI­GENCE

The new tech­nol­ogy that is al­ter­ing how con­sumers shop is as sig­nif­i­cant to the mar­ket as the in­ter­net was in the last gen­er­a­tion. For those un­fa­mil­iar, VPAs are de­vices that can lis­ten and con­verse with con­sumers to con­duct a va­ri­ety of tasks. A user can sim­ply speak out loud and give ver­bal in­struc­tions to the de­vice ex­e­cut­ing tasks such as set­ting sched­ules, re­minders and alarms, up­dat­ing users on news and in­for­ma­tion, mak­ing calls or send­ing text mes­sages, and of course mak­ing on­line pur­chases. De­vices such as Ama­zon’s Alexa and Google Home have be­com­ing increasingly pop­u­lar and affordable tools, powering the rise of the voice-based e-com­merce mar­ket.

These VPAs are peren­ni­ally con­nected to the In­ter­net and are ca­pa­ble of recog­nis­ing hu­man voices and mean­ings. Pow­ered by cut­ting-edge ar­ti­fi­cial in­tel­li­gence al­go­rithms, VPAs can make sense of sim­ple in­struc­tions and rapidly re­spond

with their an­swers. Due to their con­nec­tiv­ity to the in­ter­net and their so­phis­ti­cated tech­no­log­i­cal de­sign, they can be pro­grammed to in­ter­act with users through au­dio, and in ef­fect give the ap­pear­ance of be­ing just an­other per­son– a per­sonal as­sis­tant for ev­ery user. The sim­ple act of be­ing able to speak and ask for in­for­ma­tion or give out in­struc­tions has be­gun to rev­o­lu­tionise the way peo­ple in­ter­act with the in­ter­net and in­for­ma­tion in gen­eral.

The idea rep­re­sented in science fic­tion movies has nearly be­come real as peo­ple can now speak with ma­chines and have these ma­chines carry out tasks on their be­half. Not only is speech a sim­pler, eas­ier and more con­ve­nient means to in­ter­act with these ma­chines, but it also al­lows hu­mans to be­have more nat­u­rally and in­tu­itively– shar­ing their needs as they oc­cur, and leav­ing it to the ar­ti­fi­cial in­tel­li­gence of the ma­chine to or­gan­ise them. So if users for­get con­flict­ing ap­point­ments on their sched­ule when mak­ing a new en­try, the ma­chine will gen­tly re­mind them and even sug­gest other so­lu­tions. This kind of adapt­able in­tel­li­gence to prac­ti­cal prob­lems makes VPAs a pow­er­ful tool for re­tail­ers as they at­tempt to serve cus­tomers and sell prod­ucts.

DIG­I­TAL RE­TAIL AND VPA IM­PACT

The global re­tail sec­tor has been on a con­sis­tent up­ward tra­jec­tory, and is pro­jected to rise from USD 23.5 tril­lion in 2017 to USD 31.88 tril­lion in 2023, ac­cord­ing to Mor­dor In­tel­li­gence. This rep­re­sents a Com­pound An­nual Growth Rate of 5.3 per cent and in­cludes the e-com­merce seg­ment as well. The e-com­merce seg­ment, how­ever, is grow­ing at a much faster pace, hav­ing grown 24.8 per cent over 2016, to reach USD 2.34 tril­lion in 2017. So far, the e-com­merce sec­tor has wit­nessed mo­bile de­vices as a growth chan­nel for re­tail sales. The global e-com­merce im­pact was over 40 per cent of the to­tal, with USD 1.357 tril­lion in re­tail sales, with large re­gions

like China, Ja­pan, the UK and the US lead­ing the way.

In­ter­est­ingly, it is per­haps the mo­bile com­merce sub-mar­ket which VPAs are ag­gres­sively tar­get­ing and lever­ag­ing as they grow more pop­u­lar over time. It is highly likely that we may wit­ness a lat­eral shift as mo­bile com­merce be­comes en­tirely sub­sumed by VPA com­merce in the next 10 years as mo­bile de­vices and VPA de­vices be­come one and the same. With the pop­u­lar­ity of mo­bile as­sis­tants such as Siri, Alexa and Google, this is a rea­son­able re­sult, as the most con­ve­nient VPA would ac­com­pany a user just like a mo­bile de­vice. In fact, the adop­tion rate for VPA de­vices has also surged, with pro­jec­tions of over 650 per cent growth rate over five years, while mo­bile adop­tion has only been es­ti­mated to be just over 285 per cent.

VPA AND AP­PAREL

For the ap­parel and fash­ion sec­tor, VPAs of­fer many new op­por­tu­ni­ties for busi­nesses to serve and delight their cus­tomers. Ac­cord­ing to a 2018 re­port from Ac­cen­ture, cus­tomers are seek­ing hy­per-per­son­alised so­lu­tions to their shop­ping needs. With an increasingly younger pop­u­la­tion, these mil­len­nial and Gen­er­a­tion ‘ Z’ con­sumers are seek­ing out greater con­ve­nience and time ef­fi­ciency when it comes to the most rou­tine tasks. These tasks in­clude things such as sched­ul­ing, in­for­ma­tion ac­cess, and shop­ping. As a sur­vey by Capgem­ini demon­strated, over 40 per cent of con­sumers pre­fer VPAs over web­sites or mo­bile apps due to these rea­sons.

For ap­parel re­tail­ers, this means that they need to en­gage with dig­i­tal trans­for­ma­tion on their con­sumer fac­ing oper­a­tions in or­der to

in­ter­face with them on this new plat­form. Ma­jor re­tail­ers such as Wal-Mart have al­ready be­gun this process by part­ner­ing with VPA provider Google to link di­rectly to con­sumers. In essence, re­tail­ers can set up a shop in­side the con­sumer’s home but the chal­lenge for fash­ion and ap­parel will be to of­fer a cus­tomer ex­pe­ri­ence that al­lows con­sumers to feel com­fort­able purchasing clothes through this method.

The chal­lenge in this space is the es­sen­tial vis­ual as­pect of ap­parel which re­quires more than just voice. Fash­ion and ap­parel re­tail­ers need to look at com­pa­nies in a sim­i­lar space to learn and de­velop their cus­tomer fac­ing so­lu­tions. For ex­am­ple, French cos­met­ics re­tailer Sephora has an app on Google’s VPA which al­lows cus­tomers to make book­ings for beauty ser­vices. The most ap­parel cen­tric devel­op­ment in this space has been from H&M, which an­nounced the launch of two sep­a­rate tools that rely on VPA sys­tems. The com­pany has part­nered with Google’s VPA to of­fer cus­tomers styling and prod­uct rec­om­men­da­tions, in­clud­ing mood boards and vis­ual sam­ples, via an au­then­tic hu­man voice.

By hav­ing a dis­play in­ter­face, con­sumers can see a dif­fer­ent colour, fab­ric, de­sign and style op­tions and then place or­ders us­ing the voice sys­tem. An ad­vanced ver­sion of this ap­proach by H&M is also in the works, which uses aug­mented re­al­ity (AR) along with VPA to help cus­tomers shop for ap­parel. The AR tech­nol­ogy al­lows users to view ap­parel prod­ucts in 3D through a smart de­vice in the com­fort of their home, and even be able to vir­tu­ally ‘try on’ the prod­uct to see how they look.

VOICE OF THE FU­TURE

As VPAs be­come increasingly pop­u­lar, there still re­main key ob­sta­cles in their path to be­com­ing main­stream. The af­ford­abil­ity of VPA de­vices has im­proved over the re­cent years, but is still a ma­jor chal­lenge in de­vel­op­ing mar­kets. The US $950 bil­lion In­dian re­tail sec­tor, for ex­am­ple, is grow­ing but the e-com­merce po­ten­tial is re­stricted due to lim­ited ac­cess to key in­fra­struc­ture like elec­tric­ity and in­ter­net for ap­parel’s com­mer­cial progress. In ad­di­tion, a sig­nif­i­cant por­tion of In­dia’s re­tail sec­tor is in the un­or­gan­ised sec­tor, with greater frag­men­ta­tion within the ap­parel and fash­ion space. How­ever, de­spite these lim­i­ta­tions, the ap­petite of the af­flu­ent In­dian con­sumer is ever in­creas­ing and VPA man­u­fac­tur­ers are re­duc­ing prices on their de­vices to gain ac­cess to the cus­tomer. With greater tech­no­log­i­cal in­no­va­tions aris­ing ev­ery day, we will soon see voice-based per­sonal as­sis­tants be­come a more com­mon pres­ence in our homes and be­come a di­rect chan­nel for our re­tail de­ci­sions.

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