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The Rise of the Machines

The connected fridge of the future will enable programmatic commerce. Image via Salmon

Programmatic Commerce is a new channel set to redefine retail with its own rules. What is it?

Connected devices able to make purchase decision on behalf of consenting consumers and businesses based on pre-programmed preferences. As an example, you wake up in the morning and your coffee machine tells you it’s almost out of your favourite blend.  Your internet enabled coffee machine then instantly does the ordering for you – adding it to your shopping basket, along with the washing powder that needs replacing. The machine has had pre-programmed parameters set based on preferred brands, price limits and other learned preferences.

Shopping changed forever with the birth of the internet.  Programmatic Commerce will be the next revolution. Such concepts present almost limitless opportunities for retailers, brands and smart device manufactures to revolutionize the way that goods and services are offered to customers.

Programmatic commerce: a world where mundane repeat purchases and those easily being shared (especially millennials), add to the reasons programmatic commerce will become commonplace in the future.

Where at the moment, much of advertising is pushed around emotion, the future could well be geared more to utility and, of course, to price. While consumers will undoubtedly still look for variety in their lives, the whole conversation really changes what loyalty looks like in terms of basic everyday goods. For brands the challenge is to ensure they are not locked out due to competitors dealing exclusively with smart device manufacturers..

Salmon commissioned an independent research consultancy to explore consumer attitudes and expectations surrounding the concept of automated purchasing. The results:-

Product types that consumers are most comfortable having ordered via programmatic commerce

54% household supplies, food and drink
34% beauty, healthcare, personal hygiene

Youth leads the change towards programmatic, while older shoppers require convincing.  32% of 25-34 yr olds are totally comfortable with the idea of programmatic commerce vs 7% 55-64 yr olds.

As might be expected, the expected time savings (37%) and convenience factor (25%) are cited as major benefits, but a third key element is cost.  More than a third (37%) see programmatic commerce as a potential money-saver, highlighting that it would offer them a way to automatically purchase the cheapest products within a category. Bargains, not brands, win the heart of the consumer here.

Key Out takes

  • Programmatic commerce will be especially important for the consumer goods and grocery markets.
  • The access to personal data will eventually make search and pay per click less dominant.
  • Marketing will play a lesser role in driving decisions, as demand can be anticipated
  • Speed, convenience and simplicity will drive customer demand. However, brands and retailers still need to prove that customer data is being used securely and appropriately.
  • Older shoppers are less accepting of the idea of technology automating their purchases. However, they hold the wealth.

Time for businesses to really start thinking about it.

Source: Forbes & Salmon