Amazon wants you to take wardrobe advice from a connected gadget.
It brought personal digital assistants into our kitchens with Echo, a connected speaker. Now it can see, so Amazon wants to come into our bedrooms to help us choose more flattering outfits.
The new Echo Look appliance features a depth-sensing camera, built-in lighting and Style Check software that uses the latest advances in machine learning.
It’s a big jump for the technology. It could be bigger for Amazon’s bottom line.
The online retailer claims the algorithms are supplemented by fashion specialists. When you tell Echo Look to take a picture or video, it will send the image to the cloud, store it, perform data analytics, then offer recommendations based on current trends and what looks good on you.
In theory, it’s cool. It’s kind of like having your own personal stylist.
In reality, Amazon is dictating what is cool. Telling you what its algorithms have been trained to think looks good. And all of it can be yours for one low price. Just say the word.
The market is already big. Statista forecasts online sales of footwear, apparel and accessories will reach $90.34 billion in 2020. That is up from 2017 estimates of $69.82 billion.
Still, by Amazon standards, cracking the code has been a struggle thus far. It would dearly love to be a bigger player in the “fast fashion” business. That’s the lucrative part of the business that pushes fashion-show trends into retail stores at staggering speeds. It’s trendy stuff with lots of repeat customers. That should be Amazon’s wheelhouse.
But it has not really worked out that way. Buying clothing online is hit and miss. Customers want to know how garments fit, how they feel. Echo Look will help. It will know everything about you, especially your size and your preferences. It will live in the cloud, so you can take it on the road. And it’s always learning.
Alexa, take a selfie. What do you think? Does this make me look fat?
Making it easier for customers to buy things they love has been the basis of Amazon’s recommendation engine.
In many ways, it’s a natural evolution. Since inception, Amazon has been using artificial intelligence to make it easier for customers to buy things they love. It’s the basis of its recommendation engine. Using AI and the copious amounts of data most people freely offer online just makes sense.
It’s also the clearest way to monetize that data. It’s the best business model. This is important because other technology firms are in the game, too.
Recently, Alphabet announced its connected speaker, Google Home, has the ability to recognize different voices.
A family could use a single Home device to access multiple Google accounts. Dad can ask for his commute time to work. Mom can access her calendar. The kids can listen to their own Spotify playlists.
AI neural networks recognize who is talking and the context of their words. Then they return information based on the account holder. It’s heady stuff.
And Facebook is getting close to a general release of its M digital assistant. M is an AI-and-human-trained hybrid, so it can do some amazing things. M lives in Messenger chat and can send money (naturally), offer suggestions for restaurants you might like based on location, hail a ride, set reminders and more.
M has complete access to the user’s Facebook account. It knows your friends, your pictures, what dates are important to you and what you like. It even knows what your friends like.
M, Google Home and Alexa are revolutionary because they comb through massive amounts of data people freely offer. And, as much as we claim to value privacy as a society, our personal actions suggest otherwise.
It seems absurd that people would bring a camera and microphone, connected to an online store, into their bedroom. The potential for abuse is unmistakable. Yet these are the times we live in.
And that is why the investment story for AI is just getting started. We are at the beginning of what AI will do for corporate profits — right along with how it will help make life more friction-free.
As I’ve been saying for a few years, the best way for investors to take advantage of the explosion of AI is to own the software giants — Amazon, Facebook and Alphabet.
