Amazon Gains Offline, Online Data Through Prime Memberships

I wrote about Amazon's access to consumer data and how it could surpass Google in an April 2017 published article. Now with Amazon's Whole Foods acquisition closing on Monday, the hypothesis seems to be more of a reality as it gains access to data — searches and purchases — that cross online to offline and back again through Prime memberships. 

"Amazon and Whole Foods Market technology teams will begin to integrate Amazon Prime into the Whole Foods Market point-of-sale system, and when this work is complete, Prime members will receive special savings and in-store benefits," per an Amazon press release. "The two companies will invest in additional areas over time, including in merchandising and logistics, to enable lower prices for Whole Foods Market customers.



But there's another data war emerging that is centered on voice-activated conversation user interfaces that will also drive data signals. This technology will have implications on strategies -- especially for Wal-Mart and Amazon, two early adopters.

Prathap Dendi, GM of IoT and emerging technologies at AppDynamics, a unit of Cisco, wrote in an email to Data & Programmatic Insider that he believes the Google and Wal-Mart partnership underscores the strategic direction of marrying user data with conversational interfaces and IoT, to dramatically cut shopping and delivery timelines.

"Google brings user data emanating from searches, sensors for location, inventory and more, and its delivery service to the value-conscious goods Walmart is known for," he wrote in an email.

Indeed, voice-powered assistants will certainly provide another data point for ad targeting. After years of false starts, conversational user interfaces have grown in adoption through devices and artificial intelligence created by Amazon, Apple, Facebook, Google, Microsoft and others.  

Amazon is in a unique position when it comes to their foray into conversational user interfaces, Dendi says.

"Being a digital native, they have mastered the value of leveraging user behavior data to merchandise their products with precision," he wrote. "Accurate, contextualized customer data will continue to underpin the quality of the experience that brands are able to deliver consumers."

As we have seen with Echo, voice-activated shopping provides Amazon with another channel to engage with customers, deliver personalized experiences, and serve up cross-promotional products. Integrating the ability to shop at Whole Foods offers an entirely new layer of in-store data for Amazon to capitalize on -- not only in the physical stores, but also online. And there is no doubt as to what company owns that data.

Amazon gains a huge advantage when it comes to extending its offers and promotions to offline into physical stores.

Wal-Mart Stores is no stranger to technology. The company has a massive IT team, along with a research and development department, which spearhead a variety of innovative technologies. In the early 2000s, the retailer led the movement to use radio frequency identification technology to track shipments of consumer product goods tagged by brands. The products were tracked from the brand's manufacturing facilities through Wal-Mart's distribution centers and onto Wal-Mart store shelves.

Recently Wal-Mart partnered with Google to enter the voice shopping market that is mostly dominated now by Amazon's Echo in the United States. Beginning in September, the retailer's customers will have an option to purchase products in a similar way, through voice-activated Google Assistant via Home and their phone.

Dendi declined to comment on whether Wal-Mart or Google will own the consumer data, but says that the quality of the experience and performance of the underlying IT will certainly shape mass adoption of conversational user interfaces.

With Amazon and Walmart and Google pioneering voice-activated shopping, we can expect consumers to experiment with this trend ahead of the holiday shopping season and for other brands to follow suit, opening up more opportunities for consumers to adopt.

"For this trend to take hold with consumers, retailers must build trust, much like was done at the beginning of ecommerce," Dendi said. "To build trust through conversational [user interfaces], retailers must measure the accuracy and performance of voice interactions and marry these insights with other data sources to create a complete view of the customer."

Brands must also connect voice-powered applications with other systems to ensure that orders are fulfilled correctly and on time, Dendi said. Once brands have built this trust with consumers, they will have a huge advantage in the "battle" for brand loyalty and to improve on the consumer experience. 

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