Retail suffers new tech threats as Amazon turns 20

Amazon, at 20 years old, is still not finished taking a sledgehammer to the retail industry, as the image recognition tool on its new Fire smartphone demonstrates. Along with wearable technology and the ’internet of things’, it poses an existential threat to brands that don’t adapt.

Michael Barnett

I’m certain of nothing when it comes to making predictions about technology – when the iPad launched I didn’t believe there was any real use for tablet computers and now that I own one I still don’t.

But despite my questionable record, there are two things of which I think I can be almost certain regarding the closely linked trends I mentioned at the outset. The first is that they’re overhyped. The second is that, even if they are overhyped, they are still going to deal a combination of blows to already embattled retail brands.

I remain of the view that smartphone image recognition that links directly to an Amazon shopping page will probably turn out to have only niche appeal to consumers, as will connected specs, watches, cars and home appliances. However lots of niche markets added together can make up quite a large volume and the combined effects are likely to eat further into retailers’ margins.

Each of these connected devices has one potential use in common: ecommerce. Indeed the possibility of going into a shop and buying the thing you’re standing next to with one tap, swipe or blink at a lower online price might well be the most useful function any of them will ever have.

There’s also such effortlessness to the ideas of buying songs from your car dashboard, ordering groceries from a screen on your fridge or renewing your energy tariff directly from your smart meter that they undoubtedly present many more future threats to the existing means of selling them.

These technologies will crystallise the differences that have already been brought into the open by the mobile internet, between the forward-thinking digital survivors and the brands dangling forlornly over the precipice. If you have bad dreams about ‘showrooming’, where customers use your stores to try out products that they then buy online, then this vision of the future is an even more hellish nightmare where you’re effectively giving away your shelf space to your closest competitor.

As Marketing Week found from switched-on retailers and manufacturer brands in our article last week, new technologies could be promising for retailers as well as threatening. There are ways to use new connected technologies and the mobile web to enhance the in-store experience and to ensure a prospective customer sees your offering as the best.

But even if you’ve survived the first two decades of Amazon, standing still isn’t an option any more – not if you want to survive its next two.



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