I’ve been looking at the sharing economy and Lyft-like services with an extra analytical eye lately, but one recent Lyft promo really stuck out to me: In bars and restaurants all around Brooklyn and Manhattan, the ridesharing service has been leaving small stacks of invitations that contain a promo code for one free ride.
This kind of technique isn’t unique, but it struck me for how well it ties in with the up-and-coming idea of “contextual commerce” — that is, products that are delivered to a consumer as and when they are needed. While the most important half of the contextual equation was missing — the idea of tracking a user’s habits to pre-empt their wants — this promo intrigued me for the way it delivered pseudo-contextual services to people who were most likely to need them. People get out of a restaurant late at night; they want a ride home.
This type of context-based placement isn’t unique; anyone who’s set up a lemonade stand on a hot summer’s day can tell you that sales will be better when it’s done at the right place and the right time. In fact, the Internet has been doing this for years. If you look at a nice watch on Amazon, you’ll likely run into watch ads for days after your shopping session.
So what, then, is the big deal with this new wave of contextual commerce?
The Problem With Purchasing
To get an idea of why contextual transactions are the next big thing, we need to first take a look at the flaws in our current approach to commerce. We may not acknowledge it, but there are major limits to the way the purchasing process is traditionally carried out. Going to a store to buy groceries, for instance, is actually a fairly inconvenient approach to transactions. The customer wants an item, then has to go out and buy it, dealing with a flurry of other steps that prolong the process: They have to compile a shopping list, navigate through the supermarket, stand in line, wait for their products to be scanned — the list goes on.
E-commerce suffers from many of the same issues. While it’s definitely more convenient than the brick-and-mortar experience, even online shopping requires high levels of user initiative, and it can be time-consuming for customers to find the products they’re looking for. In addition, e-commerce misses out on the sensory experience that physical shopping gives to customers.
Contextual commerce flips these current shopping paradigms on their head, turning the purchasing process into something that works in the customer’s favor — and not against them.
Using data from devices like wearables, smartphones, and smart thermostats, the Internet of Things can help to streamline the shopping process. More importantly, it can ease the way we interact with products in physical spaces, not just in the online realm where it’s mostly been confined up until now. Here’s one possible use case: If a user drinks one Gatorade after each workout, they can use a wearable fitness tracker to log how many workouts they’ve done. After they’ve done 12 workouts, the tracker places an order at an online store like Amazon, and a new 12-pack of Gatorade is delivered to the user’s home.
Dealing With the Unexpected
The big issue with contextual commerce is that it treads a thin line between ultra-convenience and some potential breaches in privacy. The thing to remember, however, is that contextual commerce is not the same as contextual marketing. While marketing will most definitely take cues from consumer data to deliver advertisements to them contextually, commerce resides much closer to the realm of user control.
Lots of contextual commerce will be carried out on an opt-in basis that looks similar to an ongoing subscription. Other, context-based tools like automated grocery lists will simply help ease the shopping process using data that customers are comfortable sharing. While these issues will need to fully unfold before we can deal with them, it’s safe to say that the contextual shopping experience will have less obstacles to worry about than contextual marketing.
The future of commerce lies in context, and as the years pass we’ll slowly witness our shopping experiences become much more context-based. As the Internet of Things, the sharing economy, and wearable technology continue to blur the lines between our lifestyles and the technologies we use, we’ll see our own needs being met in real-time by an increasing number of high-tech tools. While we may not have noticed the widespread effects of these changes in the digital world, their gradual move into our physical lives will drastically blur the lines between our online and real-life experiences.
Image via Shutterstock.