Ecommerce + IoT + Amazon = Not Just Web Analytics


In the eyes of marketers, ecommerce has been a “hot” online phenomenon for a few years, with many managers treating ecommerce sites as a distinct channel and require a different strategy from brick and mortar stores.

Credit: Pixabay
Credit: Pixabay

But what is “hot” today changes fast when it comes to technology. Today, brick and mortar retail, a concept once believed to be threatened by online retail, has morphed into “brick and click” as a strategy. This is due to mobile devices, and now, the infusion of Internet of Things tech.

This changed interest may herald another evolution: viewing web analytics as less of a purely “web” solution.

Part of this strategy lies with customer usage of smartphones in store, which has led to new customer experience behaviors such as showrooming. Meanwhile, retailers like Amazon are increasing their scale of product and services, all supporting the long tail theory posited by Chris Anderson back in 2001.

In fact, the tipping point may come from Amazon’s effort. Amazon stands poised to reach far beyond its online roots, more than any retailer in the world.

Much of Amazon’s foray into IoT revolved around strengthening its delivery processes, positioning certain services to have more “physicality” in the consumer home. Amazon Dash, for example, offers replenishment of everyday items such as soap, detergent, coffee, snacks, and cosmetics.

And rumors surround Amazon buying a stake in a European mapping startup called Here, according to Forbes. The mapping service could provide data and logistics for Amazon’s future delivery resources.

When it comes to Amazon, rumors can run rampant. Rumors of a “brick” Amazon -- the idea of opening bookstores -- were discussed earlier this year, an irony given its history. The rumor seemed plausible. Stores would give Amazon another means to sell its devices, complementing its reach for consumer mindshare.

But the real strategic push seems to be with expanding Amazon Web Services (AWS). Last fall, Amazon introduced Kenesis, a platform for incorporating streaming data into services. It also added a business intelligence service called QuickSight. Meanwhile Amazon cut its data storage prices to compete against other enterprise-level data storage services and to draw customers.

All of this is fodder for the thinking marketer to wonder how to select analytics solutions for an IoT future. No longer are website activity the sole proxy of consumer interest and activity. Online search is still a gold standard tactic in a digital marketing strategy.

Since the rise of the search engines -- Google, Bing, and Yahoo -- however, many other ways for consumers to gain online access has cracked open opportunity for large companies to take advantage. One look at Amazon Echo, a speaker device that allows queries to the Amazon Alexa search reference bot, and one can see how that device is a digital starting point to research information, much like Bing and Google search have been gateways for Microsoft and Google, respectively.

Analytics solutions have been shifting their capability to account for more sources. Tag managers and data layers have allowed more sources within analytic solutions. Google, Adobe, and other analytic solution providers have made strides to incorporate streaming data, a hallmark output from beacons and IoT devices.

In fact, Google’s Analytics 360 introduction may also be considered as much a response to Amazon as it is to Adobe Marketing Cloud. Services like Kenesis and QuickSight are meant to draw developers who will use AWS for back-end services. In comparison, the Google Analytics 360 suite includes a number of solutions that also interact with Google-offered cloud solutions, many of which compete with AWS for developer and start-up attention.

Despite Amazon’s history with retail, my suggestion is that competition among analytic solutions will not be an overnight domination. Websites and apps remain a central part of a digital analytic strategy for many businesses. Most importantly, Google and Adobe are more formidable competitors than Borders and Circuit City, two retailers eliminated by Amazon.

Then again, business network CNBC mentioned Amazon's claim in a shareholder report that it is the fastest company to reach $100 billion in revenue.

What I believe this ultimately means is that marketers must cross the digital frontier for building a cohesive customer experience with an open mind on how to deploy analytic solutions. The current IoT era is impacting operations as well as consumer-facing media, to a point that positions ecommerce almost as vulnerable as brick and mortar stores.

I suspect the real play that occurs for marketers will be decisions that blend IoT, web, and real-world footprints. As Amazon seems ready to prove, such decisions will be necessary for a business to be formidable in the years ahead.

Pierre DeBois, Founder, Zimana

Pierre DeBois is the founder of Zimana, a small business analytics consultancy that reviews data from Web analytics and social media dashboard solutions, then provides recommendations and Web development action that improves marketing strategy and business profitability. He has conducted analysis for various small businesses and has also provided his business and engineering acumen at various corporations such as Ford Motor Co. He writes analytics articles for AllBusiness.com and Pitney Bowes Smart Essentials and contributes business book reviews for Small Business Trends. Pierre looks forward to providing All Analytics readers tips and insights tailored to small businesses as well as new insights from Web analytics practitioners around the world.

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Re: Future?
  • 8/24/2016 3:01:47 PM
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@Pierre. Using retail space as a showroom rather than having a deep on-site inventory could make sense in a lot of cases. Of course it would save the boutique size retailer on real estate and investment in inventory that just sits there. Even the big chains like Walmart could benefit from having a lot of samples while leaving the real inventory in a distribution center or back room. Then, when a shopper sees what they want to buy it's just a matter of how fast the supply chain can fulfill the order.

Plus, if one Walmart sees little or no demand for a product where they have 20 of it, there may be another Walmart in the next town where the product sells like hotcakes.

More important, however, is that if you don't have to display multiple copies of the same product on the shelves that would free up any store to offer more variety in terms of different product types, as well as more sizes and colors. I don't have hard numbers but it seems that most retail websites have a much broader product selection than the actual stores. Why not put more options in front of the customer where they can see and touch those products.

The way things are going with things like Prime, maybe the product you select during your lunch hour can be pulled out of the warehouse and be waiting for you at the end of the workday.

Re: Future?
  • 8/24/2016 2:41:14 PM
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I think the online retail brands like Warber Parker glasses are starting to wisely use that very model, Jim.  A few of them have found that they can reach customers in a few places and have display items for them to try.  I found that out with Warber last year when I replaced my glasses, so I can see how specialty need such as furniture and eyewear can take advantage.  It's a departure from early worries about retailer being gone, but actually I can see some spaces struggling to fill floorspace with retail names.  I guess we in the US have indeed hit a limit on space.

Re: Future?
  • 8/1/2016 6:53:03 AM
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@Pierre. Suppose the physical store was nothing more than a showroom, where you would display only one example (rather than 5, 10, or 20) of each brand. Then, when the customer makes their selection they swipe their loyalty card or credit card on a reader, and their purchases are waiting for them at customer pickup or at home, having been picked by robots at a nearby warehouse. That would minimize the cost of retail floor space. And, instead of seeing the product as a box on a store shelf the customer sees it in something like a display kitchen where they can try it out. (Taking the furniture store model to the next level).

Re: Future?
  • 8/1/2016 3:30:25 AM
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I've been thinking of your question since you posed it - Amazon probably could promote a "generic label" consumer good, but I think they really would want to have that item in a physical store. And if so, I suspect they would want to leverage their brand to compete against something else that has brand recognition.

Re: Future?
  • 6/7/2016 9:41:40 AM
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It's been an interesting ride watching Amazon test and remake the world of consumer buying. And what will happen as they no longer have the very best prices, relying on their millions of customers to shop the Amazon brand because of convenience and loyalty. Can other's try lower prices to compete or will Amazon and IoT just consume us eventually?

Re: Future?
  • 6/1/2016 3:54:05 PM
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@Pierre. If Amazon wants to go private label with products, couldn't they use the same generic products that supermarkets private label today? As it is the supermarkets undercut the name brands on price. I would imagine that Amazon could go even lower, considering they don't have the real estate cost of a supermarket.

Then, as Amazon takes your orders for household goods (using the dash button or the site itself) it could anticipate when you will need those goods like detergent, paper towels, and soap, and send them out in a care package when  they are due again.

 

Re: Future?
  • 6/1/2016 9:50:08 AM
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I agree with that suggestion as well.  Amazon is in a good position to scale services that support private label sales. Like Terry mentioned, in key categories, Amazon can profit well.  It may be important for them to figure out how to build the brand, maybe in ways that has not been done with previous tech companies. Intel, for example, branded their chips mainly from commercials meant to drive consumer demand.  AMazon would have the opportunity to do something different from that.     

Re: Brick and mortar data potential
  • 6/1/2016 9:42:27 AM
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Consumers are certainly in a blended moment for transactions, one that will challenge mareters for a while in understanding how to match messages to customer needs.

Re: Brick and mortar data potential
  • 5/30/2016 9:36:03 AM
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Whatever it is to the customer, Terry. My preference is to be able to do all parts of the transaction—purchase, receiving the item, returns—all from the comforts of my home. But for my husband, it's more about being able to buy things on his way home from work. And there have been times when we opted to do our research on ecommerce sites and then headed off to the store to purchase. There was another time we showroomed. If a retailer can be present in many ways and integrate seamlessly across those channels, customers can choose whatever mode of ourchase is convenient for them.

Re: Future?
  • 5/29/2016 3:05:18 PM
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@tomsg: If they can own some key categories, yes... very profitable!

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