The history of e-commerce future
The world's most innovative company of 2017 was Amazon, and Alibaba group is trying to challenge the ranking next year. How did retail companies become so influential? In the future, both companies are intending to be a part of the infrastructure, lifestyles, and even governmental control. What will the future of retail lead by e-commerce giants?
From 2007 to 2018 Amazon sales have grown from 15 to 158 Billion dollars. This year the platform becomes 24 years old as the world largest online retailer. Started as online retail, within two decades Amazon took responsibility for the development of the commerce world as a whole. The secret of Jeff Bezos's company's progress is in focus on the client: "If you're competitor-focused, you have to wait until there is a competitor doing something. Being customer-focused allows you to be more pioneering." Amazon has been one step ahead of time, relying on the future possibilities enables by technology. The company's warehouses are on the top level of efficiency and utilization of robotics. Their predictive analysis and deep learning are directed on eliminating the need of the customers to remember to purchase the essentials. The "Anticipatory Shipping" patent allows Amazon to be the only company supplying customers with goods without a need of placing an order. In nearest future, the delivery performed within an hour using drones. This development enables Amazon to expand its shipping services threatening the position of FedEx and UPS, whose shares investors are dumping in Amazon's favor.
What is there more to do when the company is already a leader in e-commerce? Jumping on other markets using available infrastructure! With the purchase of Whole Foods, Amazon challenges market with its shipment opportunities. While competitors opt for grocery pickup, the Whole Foods Prime Now program delivers groceries in a matter of two hours. Moreover, Amazon has opened the first cashier-less cart-free grocery store in Seattle. Enable by the combination of the machine learning and computer vision, Amazon Go shop requires no more actions from the buyers than to pick the product and go along with their daily plans. All customers are charged automatically when leaving the store.
To continue with the wish of being the best at serving its clients, Amazon expanded its solutions to home assistance market. Alexa - virtual assistant - is being constantly under software and hardware development. At the moment, 10% of Amazon's 566,000 employees are devoted to creating a new AI chip that would enhance Alexa's responsivity and quality. As Jeff Bezos has explained that he is focused on Alexa and its future.
Alibaba sees retail
as AI-infused entertainment
When establishing e-commerce it was hardly real to imagine that its power would expand way beyond the online trade. In January 2018, Alibaba, Chinese b2b e-retail company, became the second Asian company to cross the $500 billion valuation mark. According to China’s National Bureau of Statistics, Chinese consumers spent $750 billion online in 2016—more than the U.S. and the UK combined. Can Alibaba outbid Amazon in its ambitions? Jack Ma wants to see the mix of entertainment and consumption: “E-commerce is rapidly evolving into ‘New Retail.’ The boundary between offline and online commerce disappears as we focus on fulfilling the personalized needs of each customer. In China, our New Retail initiatives are taking shape as the starting point to our ‘Five New’ strategy, comprised of New Retail, New Finance, New Manufacturing, New Technology and New Energy.”
While Amazon puts its stakes on shipment improvements and personal assistance, Alibaba is heavily investing into R&D. Announcing pouring $15 bn in its labs, the company pushes itself to become global AI leader. Machine intelligence, human-computer interaction, quantum computing, the blockchain, and new generation of AI chips might be coming from China. “Natural language processing will further improve in 2018—learning and iterating through a huge amount of conversational scenarios to enable more natural language usage and interactions with humans. Machines will be able to understand and react to requests from humans with greater accuracy, which will allow humans to focus on more creative social tasks. It is estimated that the frequency of usage for voice interaction would surpass touch-screen interaction within 5 years.” – Nie Zaiqing, leading scientist at Alibaba A.I. Labs.
Alibaba has gone even further. As a part of the Social Credit system and Chines digitalization, the company has helped to transform Shanghai subway. Alibaba group works on installing voice recognition in the ticket machines, as well as facial recognition systems at the entrance of stations. The artificial intelligent transport system is only one of the massive developments by Alibaba's labs. moreover, China has set a goal to cooperate with the hi-tech firms to bring new technology into the ecosystem.
The future of retail is that the retail as we know will disappear. No more traditional shopping, but predictive shipment and entertainment. As two global retail leaders stories show, the R&D and investments into tech development allow companies to expand their influence to cities infrastructure, burst other industries and fastly win new territories. The strategy and moto for both leaders is customer-centricity and will for continuous development. Isn't it a secret sauce for growth and evolution?