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Even Alexa is a flop - which retail and customers really want

It should be easy.

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Even Alexa is a flop - which retail and customers really want

It should be easy. A few words - "Hey Google, talk to Otto" - were enough to find out from the language assistant of the US Internet company what was on offer at the German mail order company.

The Hamburgers had high hopes: The cooperation with the search engine giant was intended to counteract the rival Amazon, which wanted to make the language software Alexa its best seller.

The euphoria of retailers and manufacturers about shopping by voice has only been around for six years - and yet it seems like a different era in the retail landscape. In the meantime, Otto has switched off his Google helper. Amazon announced this month that it would significantly reduce its hardware division around Alexa, hundreds of jobs would be lost.

Because in reality, hardly any customer has ever bought by voice command. The assistants are used for listening to music and as a replacement for typing messages by hand, but do not generate any retail sales.

Purchasing by voice command is just one of a whole series of technical ideas that were intended to revolutionize in-store or online retail, but ultimately ended up in the landfill. Virtual try-on via webcam or smart mirror in the changing room, advice via chat bot, robots as salespeople: numerous attempts flopped in reality.

"In the last ten years, retailers have been offered a great many technical innovations that were not ready for the market or were not profitable," says Thomas Zierlein, partner at the strategy consultancy Monitor Deloitte.

It's no wonder that many retailers are critical of the next hype: the Metaverse propagated by the American IT giants Facebook and Microsoft. "Of course, our innovation team in the strategy department has the topic on the radar," says an Otto spokesman. "But we're not really actively pursuing it."

The shipper currently prefers to focus on the "real challenges" of the business, such as improvements in customer service.

The Metaverse is still largely a dream of the future anyway. The basic idea: Using data glasses, users enter a virtual landscape where they can meet other users and talk to them. Above all, the Facebook parent Meta is betting a lot of money that the technology will prevail - unlike forerunners like the online world Second Life.

The Metaverse could become a money machine, especially if online trading migrates to the virtual world on a large scale. Management consultants already sense their chance and have put the topic on the agenda at this month's Berlin Trade Congress, for example.

Much is still unclear about the Metaverse - for example, which goods will be in demand there. Some trade strategists are hoping for a new sales channel for real goods. Others see opportunities primarily in the sale of virtual things, such as clothing for the digital doppelganger, the avatar.

The boss of the listed luxury fashion shop Mytheresa, Michael Kliger, doesn't believe that his customers have time for such gimmicks. He is already dealing with the Metaverse, but less as a platform for selling. The Munich-based company wants its wealthy target group to get a better idea of ​​what events Mytheresa is organizing in places like the Mediterranean island of Capri and the Hamptons off New York.

So far, Kliger has shown pictures of it on Instagram, for example. He expects that tech-savvy customers will soon be able to watch such fashion shows from the front row in the Metaverse. "I don't believe in virtual shopping streets - but in virtual experiences." The impulse for this has to come from the users themselves. “Consultants and IT companies rave a lot about technology. But most of the ideas that are actually used come from our customers.”

But even for virtual events, enough people must first be interested in spending their time with the data glasses. Expert Ralf Deckers from the Cologne trading institute IFH is skeptical: "You can't force the use of a technology," he says. Experience shows that it always takes longer than initially expected for people to adopt a new technology.

Even shopping with a smartphone instead of a PC – now a matter of course – cost consumers a long time to overcome. "Many technical innovations are interesting in their own right, but contribute little to the overall shopping experience, so they only bring limited added value to the customer," says Deloitte expert Zierlein.

What's more, the innovations are often geared more towards the retailers' need to reduce returns than towards the customers' enjoyment - virtual try-ons via webcam, for example. Consumers shy away from the hassle, but their desire to order goods to try on at home and simply return them has actually prevailed.

But there is currently little interest in experimenting on the part of providers either. Because they have concerns: After the boom from the Corona period, sales in the online shops are falling noticeably for the first time in their existence. The share prices of all major Internet retailers from Amazon to Zalando have fallen significantly. Instead of innovations, it is currently about cost containment. Zalando, for example, has recently charged shipping fees for small orders - and often only sends more expensive packages free of charge with a delay of days.

Overall, e-commerce is surprisingly conservative. "The basic requirements of the customers are stable," says IFH expert Deckers. "And often not yet fulfilled, for example when it comes to a functioning search function in the shop."

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