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Innovator Liz Bacelar on the intersection of fashion and technology

Thanks to Ruth O’Connor for permission to publish this piece, originally published in The Sunday Business Post, October 2019.

‘Pay attention. You’ll need to,” Liz Bacelar declares as she takes to the stage. “What I present to you here will not be the same as what I present to people next week. That’s how quickly this stuff moves.”

Inventor of the phrase “fashion tech”, Bacelar is an entrepreneur, journalist and a co-founder of Current Global, an innovation firm based in New York, London and Tokyo, which seeks to redefine how fashion and retail intersect with technology.

Established in 2013 with her co-founder Rachel Arthur, Current Global forges relationships between fashion retailers, the luxury sector, tech giants and start-ups. Put simply, Bacelar has put the tech intelligence into retail. She’s speaking today at Maven46’s ‘Be’ Summit 2019 at Dublin’s Richmond Education and Event Centre, and is offering a whirlwind trip through consumer beauty and fashion, augmented reality and the immersive reality of multiple platforms.

Prior to launching Current Global, Bacelar established Decoded Fashion – the world’s largest innovator community for consumer retail. The company launched in ten countries before she exited. “I wanted to be in the connection business, not the conference business,” she says.

She is also co-founder of Flow Journeys, which sees a handpicked group of thought leaders visit locations as diverse as Iceland and Cuba to build relationships and foster collaboration. It’s networking on another level.

She uses terms like “data-driven customer journeys”, “augmented worlds” and “a culture of purpose” – which sound like future jargon, but we’re already there. Think you’ve never used augmented reality? What about apps such as the Dulux Visualiser which allows you to try paint colours on your wall? Amazon App’s View in your Room function? Or the recent launch of Spark AR on Instagram allowing users to “try on” cosmetics or sunglasses from Nars Cosmetics and Ray-Ban?

Bacelar is frequently asked whether bricks-and-mortar stores are dead. She doesn’t believe so; she says that physical retail spaces remain important, but that innovative brands are leveraging those spaces differently and the customer has become more demanding.

“It’s about having a mixed-reality layer overlaid [on the mobile experience], so that when you go into a store today you know that there will be a mirror in which you can see the make-up on your face. In certain markets, this is becoming a consumer expectation. The customer does not want to have to try on the product physically – they want to try on the product virtually.”

Later when we talk, Bacelar says that we are living in an era of contradictory behaviours, a battle between the digital and the analogue. The desire for immediacy and convenience has become a way of life. “You can live in a rural setting and still want to receive things faster,” she says. “We all perceive that we have less time, yet we also have more things to do, so we need vendors to give us efficiency and speed. A lot of what’s driving implementation of these things is a chase for speed and free time.”

The more free time we have, however, the more we spend it in a digital vortex which sucks away our human experiences. “It’s a pendulum that keeps swinging from one side to the other,” Bacelar says. “Sometimes you do want to talk to somebody when you go to a store. So technology now is swinging towards personal connections.”

Think of when you first got a personalized email from a brand. It seemed cool and even intimate at the start, but not after the 300th time. “But what if the email is from Tanya, who you met at the store, and who logged you in to the loyalty system for the brand? It becomes harder to ignore that email when you know it was sent by a real person. Stores are rolling that out now, with the first touchpoint being a real person.”

Data-driven customer journeys can become skewed when those same customers supply incorrect information. Think of the child who uses a fake date of birth to set up a Gmail account in order set up an Instagram account because they’re under the age limit, or when you put in false details online for privacy reasons.

Liz Bacelar, co-founder & CEO of Current Global speaking at Maven46’s ‘Be’ Summit 2019

“The major platforms do have bad data,” says Bacelar. “A lot of brands over-rely on data from the social media giants and they don’t have their own way to create a deeper understanding of who their consumer is. There are a lot of start-ups that want brands to think outside of those major platforms by harnessing the data themselves to reach a place of accuracy.”

Since we spoke in Dublin, I’ve been anticipating the new Ken Loach and Paul Laverty film Sorry We Missed You, due for release in November. It’s a stark look at the zero-hour-contract gig economy and the appalling conditions in which the people who deliver our online shopping work because we demand immediacy through e-commerce. It raises the question of where the humanity lies in all of this.

Bacelar believes that the next big retail trend is the “trend of purpose”. Thanks to the “Greta effect” she believes that young people are becoming less interested in shopping from brands that lack purpose. “Kids are bouncing from digital to analogue at a very interesting pace and the way they are aggregating communities is very interesting. The sustainability and climate change effort does not belong to any specific social platform,” she says. “It is a globalization of mobilization – the ability to mobilize communities and groups from anywhere without being in one specific place.”

Bacelar says that we are living an “offline moment” through global climate change protests and that we are also living in an “exponential curve” – a period of change on a large scale at an accelerated pace. “The level of change we’ve seen in the past six months has been greater than in the past ten years when it comes to the subjects of sustainability, technology and data awareness. Change is happening very fast.”

If people in general are resistant to change, this is also the case in the corporate environment where she says many executives believe that innovation is gimmicky rather than “doing something in a new way to get different results”.

Bacelar adds that we, as consumers, have the power to shape the conversation. “I know of companies today who are only doing sustainability because you must show that you care,” she says.

“Companies like the Eileen Fisher womenswear brand have been doing this for many years and no one listened. It once looked stupid to take old clothes and remanufacture them. Now it sounds invigorating and inspiring to a consumer.

“If I were a luxury executive, I would be terrified of the ten-year-old kids today. Their futures depend on these executives and they are not aligned. These kids walking the streets with Greta Thunberg care about localization, activism, inclusivity, empowerment – everything that luxury hasn’t been.

“Luxury is trying to catch up. In eight years, these kids will be their consumers. They have eight years to change their ways.”

Ruth O’Connor is a journalist writing for Ireland’s top publications on fashion, design, craft, trends and business for the past 13 years. She graduated from University College Dublin in 1998 with a first class honours degree in English. She then studied pattern cutting and fashion design later going on to obtain a first class honours degree in journalism from Dublin City University in 2006 where her final thesis was an exploration of fashion in Ireland. @ruthoconnorsays

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Comment data e-commerce technology

5 bold predictions for e-commerce tech in 2018

Mike Mallazzo of Dynamic Yield, shares his views on the year ahead in e-commerce tech, from the need for vast amounts of data to gain ground in the machine learning era, to the idea of Patagonia as a target for Amazon.

Bold predictions for e-commerce tech in 2018
Bold predictions for e-commerce tech in 2018

Fifteen years ago, the existential threat to many major retailers was a small online bookshop. Ten years ago, the medium that drives 60% of online retail traffic didn’t exist. Five years ago, personalisation was a nascent technology experiment being conducted by a few enterprise retailers. One year ago, the term “retail apocalypse” didn’t even exist.

With the pace of innovation in e-commerce technology, predicting how retail tech will shake out in 2018 is the ultimate fool’s errand.

1. The golden age of customer experience will shine brighter

Today’s e-commerce professionals aren’t just thinking about changing colours on banners and buttons. The conversation has shifted to thinking about the entire shopper journey and how to optimise every element of it.

As barriers to entry in e-commerce crumble, there are scores of e-commerce start-ups in every category competing for your affection. Concurrently, there are thousands of marketing technology vendors trying to sell these companies technologies to help them deliver superior digital experiences.

The competitive landscape is fierce, breeding incredible innovations in every corner of retail from supply chain and logistics to in-app augmented reality. With smart people competing across the internet to capture our attention, the end experience for the end user will continue to get better and better.

2. Artificial intelligence will finally make a real impact, but with little glitz and glamour

With honorable mentions to “growth hacking” and “storytelling”, no buzzword was more abused in 2017 than “artificial intelligence”, or AI. It’s replaced big data as the new teen sex with everyone talking about it and nobody doing it.

However, the problem with adoption of AI in e-commerce has not been limitations of the technology itself. It’s been in access to data to help the machines learn. In order to meaningfully impact the customer experience, machine learning algorithms need to ingest vast amounts of data; machine learners are ultimately only as good as the school supplies you arm them with. However, even for tech-forward retailers, this data often exists across a myriad of software programmes and dusty basements of servers making it impossible for them to create unified profiles of their customer.

Low hanging applications of AI in retail lie in solving unsexy problems, such as which recommendations strategy to serve new visitors to an e-commerce website. While AI won’t upend retail anytime soon, practical applications of machine learning to common e-commerce problems will proliferate in 2018, benefiting brands that adopt the technology.

3. Retail’s middle class will face its toughest year yet

Already eviscerated, retailers and department stores that sell to the middle class will encounter even tougher market conditions in 2018.

All of the feel good articles saying that a lemonade stand can compete with Amazon leave out an inconvenient truth – most of the brands successfully competing with Amazon sell really expensive goods. The median household income in America simply can’t buy Away luggage, a Rent the Runway subscription or $150 shoes from Rothy’s.

Quietly, the retail apocalypse has also been a boom time for hyper discount retailers such as Dollar Tree, who can still compete with Amazon on the basis of price. Incredibly, one company, LA-based Hollar, has successfully managed to take the dollar-store experience online, blending competitive pricing with sophisticated supply chain and digital technology.

Expect Hollar to become a true household name in 2018 and beyond and a company that delivers real value to the e-commerce ecosystem.

4. Amazon will meaningfully enter fashion by way of acquisition

Last time Jeff Bezos couldn’t crack a niche e-commerce market, he simply bought out his competitor, Vito Coreloning diapers startup Quidsi. Look for Amazon to bring back this playbook in 2018 to finally break into fashion.

Amazon whisperer and NYU professor Scott Galloway predicts that Nordstrom will join the Amazon empire next year to plug this gap. An even bolder prediction from Gene Munster has Amazon buying Target in 2018 for about $40 billion. While Amazon has shown a willingness to swing big with the Whole Foods acquisition, I’d look for slightly smaller stores with high margins, nouveau riche clienteles and chic brick and mortar presences to be prime targets. Amazon can buy a retailer with less than $1bn in revenue with pocket change while avoiding pesky antitrust concerns.

Bold prediction: Amazon unites the South American topographies by making a bid for Patagonia. Bezos picks up a socially active brand beloved by millennials while Patagonia does the deal to lower prices and to provide financial cover for even more political activity

5. Brands will have less value than ever

While Amazon’s shadow looms everywhere, retail’s old guard is also being hammered by the fact that more shoppers every month are simply ambivalent about the logo on their clothes.  For many millennials, the $12 black polo with no logo is just as good as the $70 Lacoste polo with a cute little crocodile.

Perhaps nothing is more telling than the fact that one of the VC darlings in e-commerce is literally called “Brandless”. In 2018, expect a lot more nice apparel from no-name brands to flood the market, increasing pressure on many iconic brands to win on the basis of customer experience rather than brand equity.

Mike Mallazzo is the head of content at Dynamic Yield, a personalisation technology start-up. His writing on the future of commerce, media and technology has appeared in Quartz, Entrepreneur, Forbes, The Next Web, MediaPost and the Chicago Tribune. 

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business data digital snippets e-commerce social media sustainability technology

What you missed: A new textiles economy, competing with Amazon, Patagonia vs Trump

Stella McCartney and Dame Ellen Macarthur
Stella McCartney and Dame Ellen Macarthur

A round-up of everything you might have missed in relevant fashion business, digital comms and tech industry news over the past fortnight.


TOP STORIES
  • Stella McCartney and Ellen Macarthur team up to tackle waste in fashion [The Industry]
  • A new textiles economy: Redesigning fashion’s future [Ellen Macarthur Foundation]
  • The future of retail in the age of Amazon [Fast Company]
  • Patagonia is suing the Trump administration [GQ]
  • 2017: the year of Gucci (and logos, slogans & sleeves), according to Lyst data [The Industry]

BUSINESS
  • Europe’s biggest mall owner buys Westfield for $25bn [Guardian]
  • Victoria Beckham raises $40 million in private equity investment [NY Times]
  • Amidst new optimism, emerging markets to overtake west in 2018 [BoF]
  • With Aday investment, H&M hopes to ‘leave stigma of fast fashion behind’ [Glossy]
  • Eileen Fisher makes strides towards circularity with ‘tiny factory’ [BoF]

SOCIAL MEDIA
  • Unwrapping Barneys’ holiday social media strategy [Glossy]
  • These retailers are #crushingit on social this holiday season [RetailDive]
  • Facebook is testing a way for brands to send mass messages via Messenger [AdWeek]

MARKETING
  • Luxury brands embrace experiential marketing to stay relevant [Skift]

RETAIL & E-COMMERCE
  • eBay now lets you start shopping with a Google Assistant smart speaker and finish on your phone [VentureBeat]
  • Death of retail? 2017 was all about the empire of luxury e-tail [NY Times]
  • Céline enters e-commerce with release of French site [WWD]
  • Everlane is opening its first stores, after years of swearing it wouldn’t [Washington Post]
  • Fruit of the Loom tries on subscription underwear [Bloomberg]

TECHNOLOGY
  • Online e-commerce giants get personal [BoF]
  • Rebecca Minkoff uses VR for planning stores [Glossy]
  • The new Reformation store is a real-life Clueless closet [TheCut]
  • BoF and Google partner on artificial intelligence experiment [BoF]
  • Facial recognition is tracking customers as they shop in stores, tech company says [CNBC]

PRODUCT
  • These were 2017’s wildest innovations in clothing technology [HighSnobiety]
  • Trending: algae, ocean plastics pave the way for more sustainable consumer products [Sustainable Brands]
  • This natural liquid silk is starting to replace oil-based plastic [Fast Company]
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Comment e-commerce technology

Comment counts: To reignite retail, value has to come from a digital core

We’re entering a retail renaissance where value will come from personalised shopping experiences, innovative delivery services, and entertainment blended with commerce, says Lori Mitchell-Keller of SAP.

Digital is facilitating a retail renaissance, says SAP
Digital is facilitating a retail renaissance, says SAP

The retail industry has seen significant changes in 2017. Following traditional brick-and-mortar store closures across the spectrum – from sporting goods to fashion and general merchandise – some allege we’re on the brink of a retail apocalypse. However, in my opinion, the industry is undergoing an extraordinary period of change – one that is much more representative of a retail renaissance.

To stay competitive in the digital landscape, we’re seeing many retailers redefining their business models and putting technology at the heart of their strategies. To be successful and meet growing consumer expectations, retailers must focus on establishing a strong digital core and leverage the benefits it provides: creating personalised shopping experiences, offering innovative delivery services, and blending entertainment with commerce.


Personalised shopping experiences

With consumer demands continuously growing, it’s important that retailers are actively using technology to provide personalised offerings to make the shopping experience unique to each individual. In my experience, consumers expect retailers to have a comprehensive understanding of their likes and dislikes prior to purchase. After all, more than 61% of consumers value the ability to ask a sales associate for product recommendations.

One retailer that understands this and is employing a dynamic platform to collect data and build a comprehensive consumer history is ULTA Beauty. Through ULTA Beauty’s clientelling app, store associates have access to consumer’s shopping histories and preferences. This allows employees to assist with the selection process and ensure consumers, such as myself, are not overwhelmed while browsing the more than 20,000 products ULTA Beauty carries. Employees can review items specific to each consumer and provide targeted product recommendations – making our shopping experiences both enjoyable and more convenient.


Innovative delivery services

Another way retailers are using technology to invigorate their business processes is by providing enhanced delivery services. In this era of unprecedented innovation, consumers are starting to expect near real-time delivery. Therefore, it’s crucial that retailers expand consumer delivery options – an investment that has even greater ROI.

For example, sunglass manufacturer Maui Jim invested in UberRUSH to make purchasing items more convenient, affordable, and reliable. Through the partnership, the company can now ensure door-to-door delivery in one hour or less, elevating consumer satisfaction. Another service that many companies are implementing is click and collect, including curbside delivery. Retailers such as Walmart are focusing on incorporating the benefits of both traditional shopping and e-commerce by offering online purchasing and one-hour curbside delivery at local franchises – drastically improving the entire shopping experience.


Blending entertainment with commerce

Today, it’s clear that shoppers expect curated offerings unique to their specific styles and preferences. Many retailers are finding success by focusing on delivering personalised shopping experiences for consumers, instead of merely trying to sell their products. Amazon’s upcoming launch of a home makeover show, Overhaul, is designed to sell products by merging entertainment and commerce, for instance. It will feature many of Amazon’s home furnishings, and allow viewers to click on and purchase the items directly through the site.

Another example of a retailer that has merged entertainment with commerce to deliver a heightened shopping experience and increased sales is Nike. The company recently invested in the development of a new physical store location in New York City that features a mini indoor basketball court and a soccer field. By providing an entertaining environment, the retailer can attract consumers while expanding the shopping experience beyond just purchasing products.


The future of retail

The retail industry is rapidly changing to meet the dynamic demands of consumers and incorporate elements of personalisation, innovation and entertainment into their overall business strategies. Evident by new store openings from retailers like Bonobos, Warby Parker and Zara, it’s clear that traditional brick-and-mortar locations are not a thing of the past, but a living canvas of innovation and opportunity.

The retailers that understand that consumers are willing to pay more for a better shopping experience and incorporate technology into every aspect of their value chain will find great success – and, as participant and advisor, I’m excited to see how the industry continues to evolve during this time of extreme transformation.

Lori Mitchell-Keller is the global general manager of consumer industries at SAP. Comment Counts is a series of opinion pieces from experts within the industry. Do you have something to say? Get in touch via info@fashionandmash.com.

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product Startups technology

Telekom Fashion Fusion challenge searches for fashion of the future

Telekom Fashion Fusion
Telekom Fashion Fusion

Deutsche Telekom has launched its second annual ideas competition supporting the future of fashion and technology; inviting young talent to realise visionary concepts for high-tech apparel through to digital lifestyle products.

The Telekom Fashion Fusion challenge, as it’s called, is looking for creative ideas from across Europe in three categories: connected devices and smart accessories, haute couture and show fashion, and business solutions and smart services.

Entries are open until November 17, following which a shortlist of 10 finalists will be empowered to develop quality prototypes of their concepts in the Fashion Fusion Lab in Berlin from February to May 2018, before presenting them at an exclusive award show at Berlin Fashion Week in July 2018.

International coaches from the nexus of cutting-edge fashion and technology, including designers Pauline van Dongen, Julia Körner, Jasna Rok and Danit Peleg, will support the initiative.

“In our Telekom Fashion Fusion competition, young talents are given the unique opportunity to realise their dream of high-tech clothing, wearables or digital lifestyle products and bring them to market with the help of experts from the industry, the fashion world and the start-up scene,” says Antje Hundhausen, VP of brand experience at Deutsche Telekom.

The 2016 edition of the challenge saw 120 applicants from 25 countries. Trainwear, a virtual personal trainer integrated in smart fitness clothing, emerged as the winner, closely followed by Mimime, an augmented reality app that allows consumers to add patterns, accessories and artistic forms to clothing. Third place went to TranSwarm Entities, which combines 3D printing and drone technology, alongside music producer Beorn Lebenstedt (Newk), to curate a fashion performance.


This year’s entries will be judged by an esteemed jury including Dirk Schönberger, creative director at Adidas and Anita Tillmann, managing partner at Premium Group.

True to the slogan for this year’s edition – Technology becomes Fashion – the seamless integration of technology and the need to keep an eye to marketability of a product, all the way from initial concept to readiness for market, will play a central role in choosing the three eventual winners.

The Telekom Fashion Fusion competition is sponsored by Adidas, Intel, Lufthansa, Zeiss and Wired Germany. It is open to start-ups, entrepreneurs, engineers, fashion designers and students of the European fashion, design and technology scene, to apply either individually or in teams.

To do so, they need to send in information about their idea of concept, illustrative material that supports and visualises it, and information about the people behind the project and their motivation to participate.

The challenge can also be followed on social media via Facebook, Twitter and Instagram and by using the hashtags #FashionFusion and #Telekom.

(This is a sponsored post)

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Comment counts: Why data is the future of customisation

The best examples of customisation come from upstart brands with vast amounts of qualitative and quantitative data on their customers’ preferences, writes strategist Ana Andjelic.

Function of Beauty's customised hair products
Function of Beauty’s customised hair products

Netflix has 76,897 unique ways to describe types of movies. By breaking down every single attribute describing film and television content – narrative elements, moral aspect of characters, romance quality, scariness – it came up with custom genres that are specific to the point of ludicrous. By mixing all those micro-genres with millions of users’ viewing habits, Netflix successfully created popular television shows.

Fashion and beauty industries took cue, and in recent years we have seen a surge of customised, data-led services like Stitch Fix, Kid Box, Birchbox or Function of Beauty. They promote micro- and human-centred approaches to product manufacturing, design, merchandising and customer care.

Netflix succeeded because it put its custom genres at the centre of its content universe. Fashion and beauty brands will succeed when they put their customers at the centre of their designs.

Much to the chagrin of the traditional fashion establishment, used to revering the flashes of creative inspiration and mysteries of the creative process, the future of fashion and beauty seems to be in the hybrid model that mixes artificial intelligence, data and aesthetic inspiration to create custom-made items.

Yet, while the technology behind it may be new, customisation as a future-facing business strategy is as old as the industry. Legacy fashion and beauty brands built their brands around made-to-order, impeccably tailored and on-demand products. People went to these brands because they knew they would get a superior-quality item that was made just for them. Bespoke products are the very definition of luxury in comparison to premium and mass.

It’s not hard to see why customisation may become a go-to strategy for fashion and beauty players again therefore. Younger affluent consumers increasingly turn to quality and craftsmanship in their quest for products that reflect their personal preferences and are an antidote to fast-fashion. It’s about buying less, but better.

“More than 45% of those aged 13-34 have bought a personalised product before, while 85% like when brands offer the option to personalise products and services, according to a March 2017 report from youth marketing research firm YPulse,” writes Lauren Sherman.

In practice, customisation is costly. Its successful implementation asks for the transformation of the entire vertically integrated value chain of legacy companies. Today, this value chain is built for efficiency in producing and distributing as many identical items as possible. Despite the consumer demand and the obvious benefits of customisation (a better alignment of supply and demand, higher customer satisfaction, less inventory on hold), there are few legacy companies who opt in for customisation, and that do it successfully.

It is not surprising then that the best examples of customisation come from the up-and-coming brands. They are the closest to their customers, and they have a vast amount of qualitative and quantitative data about their customers’ preferences, choices and behavioural patterns.

Function of Beauty is a beauty start-up that creates personalised shampoos and conditioners based on users’ hair properties and their #hairgoals, for instance. They mix the ingredients based on this information, under a simple mission of creating products that are built for a single person’s hair. Function of Beauty’s algorithm offers up a whopping 12 billion custom combinations.

Customisation as the original fashion and beauty strategy has recently been put on steroids by technology, and we can expect that this AI- and data-fuelled trend is only going to continue. Modern brands are able to deliver handcrafted, made-to-order items at speed and with customer knowledge unseen before. Data-driven customisation is like a flashlight in a candle factory, and is hard to beat.

In the past, high-end fashion and beauty houses grew by amassing scale. Today, this sort of growth is unsustainable, with saturation of emerging markets and pressures on the industry to become more socially and environmentally responsible. This means that fashion and beauty needs to find another way to scale. With the internet encouraging networks of niches and individuals with unique tastes and needs, customisation may as well be an answer.

Ana Andjelic is a strategist, writer and doctor of sociology. Comment Counts is a series of opinion pieces from experts within the industry. Do you have something to say? Get in touch via info@fashionandmash.com.

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Comment counts: If we’re going to do fashion and tech, it has to be right for the consumer

Data has a bigger role to play than the industry is yet paying attention to, writes Glenn Ebert of SapientRazorfish, pushing for a customer-first mentality from retailers.

Farfetch Store of the Future
Farfetch Store of the Future

Judging from the nonstop chatter in the trenches of nearly every digital conference and forum this year so far, much of the industry buzz stems from the potential posed by artificial intelligence (AI) and virtual reality (VR), and how big brands will leverage this next frontier of tech.

As the halfway mark of 2017 has now arrived, the fact is the world of fashion and retail still remains an incredibly fragmented, chaotic and fatigued place. While new technologies present an exciting opportunity, the retail industry (especially luxury brands) appear to be even further away from being able to engage these experiential trends, as many still can’t grasp the new fundamentals needed to survive. This is especially apparent when compared to more savvy competitors and entrant disruptors.

After all, many brands are still struggling to find effective, efficient models to overhaul subpar customer experiences and meet the needs of a more demanding and discerning digital consumer. As the retail industry continues to burn and more brick-and-mortar stores shutter, very few retailers have mastered the art of using a data-driven approach to give customers products and experiences they actually want to see.

The fact remains most of what’s currently being created in the fashion tech space is still not wearable, functional, scalable, or even applicable to the day-to-day lives of the modern shopper.

While embedded virtual reality, fitness trackers and Facebook ‘like’ sensors are pretty interesting, are they really what the customer wants? The gap in appetite and comprehension for adaption and innovation is far wider than many fashion companies are aware of; especially when compared to alignment of enthusiasm and cohesion seen in other industries.

One of the biggest voids is in how to use data and insights to provide customers with relevant in-store and online experiences. This is especially true for many luxury brands, which have been stiff and cumbersome in changing how they position and deliver their products and experiences to a younger, millennial consumer.

There’s a need therefore to step back and learn from the brands that are getting this right. Take a look at Amazon’s recent $13.7 billion acquisition of Whole Foods, for instance, which enabled it to combine data it already collects from existing platforms with Whole Foods’ customer transaction data, to create an individually tailored customer experience.

Nordstrom seems to be the biggest bright spot in the industry to crack this code otherwise. Using an effective mix of revamped eCRM-minded digital touchpoints, social media and e-commerce data, and improved in-store technology to make the customer to salesperson experience more efficient, the once in-danger “mall brand” has rebounded to the tune of 50% revenue growth over the past five years.

Luxury e-commerce juggernaut Farfetch meanwhile, added to its list of headline grabbing moments when it announced its Store of the Future back in April. Building on its purchase of London-based department store Brown’s in 2015, the retail space aims to “link the online and offline worlds, using data to enhance the retail experience”, as quoted by CEO Jose Neves.

Using everything from RFID-enabled shopping racks, augmented reality mirrors and dressing rooms, and a full integration of the shopper’s mobile app to enhance the salesperson experience, the move is bold to say the least. While it’s one of the most literal, advantageous examples of putting data at the heart of the retail experience, only time will tell if it will translate to foot traffic.

In summary, as exciting as it may be to usher in the era of the virtual cashmere sweater, there are still many areas retailers should be focusing on first; specifically, better leveraging and integrating data and insights to optimise the customer experience for a new generation of consumers. Furthermore, we should be using such insights to validate whether consumers actually want these types of products, experiences or innovations in the first place.

Glenn Ebert is a senior digital strategist at SapientRazorfish. Comment Counts is a series of opinion pieces from experts within the industry. Do you have something to say? Get in touch via info@fashionandmash.com.

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Comment counts: How AI is key to the future of retail

Advances in artificial intelligence are destined to make our lives and shopping experiences stronger than ever – good news for the consumer, and even better news for retailers, writes Uwe Hennig of Detego.

The AI-powered Macy’s On Call mobile tool from IBM Watson and Satisfi
The AI-powered Macy’s On Call mobile tool from IBM Watson and Satisfi

There have been a number of buzzwords and defining technology trends in retail over the last decade, from big data, to omnichannel, and the ubiquitous, omnipresent cloud. Now the internet of things (IoT) and artificial intelligence (AI) have become the latest talk of the town.

Forrester expects investment in AI to triple this year. By 2020, 85% of customer interactions will be managed by AI, according to research by Gartner. It’s becoming big business across industries, and not just in retail: the value of AI is estimated to be worth $36.8bn globally by 2025, predicts US market intelligence firm Tractica.

With the proliferation and accumulation of so much data as people shop anytime, anywhere – whether online, in physical stores or increasingly via their mobile phones – the conundrum for many remains: there’s just too much information to be able to make any meaningful sense out of it.

And that’s where artificial intelligence comes in. AI relies on a continual process of technological learning from experience and getting better and better at answering complex questions. Algorithms powered by AI can rapidly come up with alternative options which are otherwise much more time-consuming and laborious using conventional computer-powered A/B testing. Like the human brain, AI adapts to the environment and gets better the more you use it. But unlike humans, the capacity for improvement is unlimited. What’s more, boring, repetitive tasks are never a problem.

Plenty of examples in retail already fall under the hat of AI: chatbots are being used to help with customer service; personal shopping assistants like Amazon’s Alexa respond to voice prompts; and robots are replacing information kiosks in stores like Lowe’s in the US. Live chat functions on retailers’ websites are also proving popular for replacing staff with always-on robots and providing a continuous machine-learning customer service experience. But the future of this space looks even more AI-enabled.


Personalised service and the human side of AI

Retailers have long since struggled with maintaining ever-increasing standards of customer service as consumer expectations continue to rise. As people continue to shop more via the internet, retailers have to provide a faster, more effective, personalised service specifically aimed at the needs and wants of individual customers.

AI is set to help. eBay’s ShopBot for instance, is an AI-powered personal shopping assistant on Facebook Messenger that helps users find the best deals and sift through over a billion listings.

Chatbots have question and answer recommendation capabilities that are much more personalised than previous systems. They’re examples of retailers trying to create a near human interaction. Yet an IBM study in retail deduced that traditional retailing is too constrained to cope with recent technological advances and that the technology to date is just not human enough.


Humans vs machines

In spite of that, a new report by PwC says that around 44% of jobs in the retail sector are at risk of automation by 2030. AI is extremely good at repeated tasks and number crunching, so machines will do lots of manual processes in the future. We’re already seeing some retailers wanting to close off stock rooms and using robots to make automatic decisions about what needs replacing on the shelves, or managing the flow of goods for deliveries and onto the shop floor, for instance.

In the not too distant future, it will be common practice for consumers to pull out their phones and ask it a question as they enter a store, rather than seeking out a sales assistant or searching through the rails themselves. The smartphone can immediately respond that a desired article is available in a specific size and that sales staff can bring it.

Voice recognition systems and speaking to a computer or smartphone (like Apple’s Siri) for answers is already taking shape. Macy’s used a version from IBM Watson to do exactly this (as pictured above), and talking interactive screens and self-checkouts in fitting rooms is something we’re also already engaged with.


Real-time recommendations

AI, or machine learning, learns from past behaviour, as well as trial and error, to come up with more intelligent solutions. It’s not just science, there’s an art to selling too. Old fashioned rules-based analytics will soon become a thing of the past.

At Detego, this means making more informed recommendations to retailers using predictive analytics. So, much like the practice of online retailers flagging up similar items you might like as you browse the web, some retailers are now taking this to the next level using AI – and not just online, but in their physical stores as well (where still over 80% of sales are driven).

For example, whereas a sales assistant might, if you’re lucky, recommend something that’s evidently there on the shelves, an AI system would be better at identifying what would be the best items to offer based on many more criteria. These would include fundamental credentials like real-time product availability and the resulting profitability for the retailer, as well as other considerations like the consumer’s browsing history, or even what they’ve tried on before in the fitting room (thanks to “smart” RFID tags embedded into garments).

Informed recommendations can also be made by tapping into social media and other factors that might influence product choices, like current fashion trends or weather forecasts in different regions.


Predictive AI

Effective AI systems are also looking for re-occurring patterns to help avoid out-of-stocks and unnecessary markdowns, such as by promoting underselling lines held in reserve that otherwise would later have to be discounted. Not only will such advanced technology know when shelves are empty, but more importantly, it will predict what will happen next.

One of the biggest growth areas where AI can make a significant difference to a retailer’s bottom line – for mobile, online and bricks-and-mortar retailing – is in this field of intelligent forecasting systems. Previously, retailers were only able to predict roughly the quantities of products to order to keep shelves fully stocked using (often out-of-date) inventory levels and historical sales data (usually going back a few years, at best). These days, AI can develop a much more accurate picture of exactly what types of products, sizes and colours are likely to sell, by looking at multiple scenarios in real time (fashion trends, consumer behaviour, the weather etc) and drawing on data from the internet. This means forecasting is no longer so much “stab in the dark” guess work.

Using AI, German online retailer, Otto, predicts with 90% accuracy what will be sold within the next 30 days and has reduced the amount of surplus stock it holds by a fifth. It has also reduced the number of returns by over two million products a year. It claims to be so reliable, in fact, that it now uses an automated AI system to purchase 200,000 items a month from third party suppliers with no human intervention. Humans simply wouldn’t be able to keep up with the volume of colour and style choices to be made.

While some fashion retailers are working with Detego to exploit many of the latest technologies to help encourage more people into their stores and improve levels of customer service, forecasting in fashion is generally quite poor. Despite more than 1,500 stores already equipped with Detego’s software and over a billion garments digitally connected, the wider industry average for forecasting accuracy in fashion still lags at a paltry 60-70%. Although RFID tagging and real-time stock monitoring offers near 100% inventory accuracy, relatively few fashion retailers have rolled-out digitally connected technology on a wider scale.

It’s still only the early stages of AI, but with the promise of it making forecasting and product selections even more accurate, it’s set to become a rapid reality. Now’s the time to jump on board.

Uwe Hennig is chief executive of retail tech specialist, Detego. Comment Counts is a series of opinion pieces from experts within the industry. Do you have something to say? Get in touch via info@fashionandmash.com.

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product technology

The Brooklyn Fashion + Design Accelerator’s TEK-TILES team create 30 smart textiles

Touch pattern tracking TEK-TILE designed by team members Jingwen Shu and Renata Guai - Brooklyn Fashion + Design Accelerator
Touch pattern tracking TEK-TILE designed by team members Jingwen Shu and Renata Guai

What if clothing could change colour depending on your location or context? What if it could fold itself or change its shape throughout the day? What if different patterns could be knit into a garment in order to activate an augmented reality (AR) application on a mobile phone? These are just a few examples of the concepts at the centre of the Pratt Institute Brooklyn Fashion + Design Accelerator’s TEK-TILES project.

The project aims to create a library of 30 smart textile swatches this summer. In this project, “smart textiles” combine materials exploration with electronics prototyping. In order to generate 30 smart textile swatches, during the first half of the 10-week project, the TEK-TILES team is generating many more possible ideas, combining them together and creating multiple iterations to determine the most interesting swatches to pursue in the coming weeks.

Zee Cesare (left), a programmer in the BF+DA p.lab, meeting with Z. “Teddy” Xiong, an industrial design student from Pratt Institute - Brooklyn Fashion + Design Accelerator
Zee Cesare (left), a programmer in the BF+DA p.lab, meeting with Z. “Teddy” Xiong, an industrial design student from Pratt Institute

For example, the group has been finding ways to embed the kinds of features that are typically associated with computers and electronics – buttons, touchscreens and switches – with those commonly linked to fashion, garments and textiles such as snaps, zippers and hangers.

In addition to integrating the materials and electronics components, the swatches will be produced using the BF+DA’s Shima Seiki digital knitting machines in order to demonstrate their capabilities. In line with the BF+DA’s focus on sustainability and responsible technology, digital knitting machines offer interesting possibilities in terms of their ability to knit entire garments into one piece. This removes the need to sew together various separate parts such as the arms on a sweater. But, the use of digital knitting machines also requires that the team learn to translate their ideas into specifications that can be understood by the BF+DA’s p.lab team, which requires creating a new language for both teams to use.

TEK-TILES team member Evan Huggins illustrates the integration of fellow teammate Aaron Nesser’s green knit structure (top layer) with the electronic LED grid (bottom layer) - Brooklyn Fashion + Design Accelerator
TEK-TILES team member Evan Huggins illustrates the integration of fellow teammate Aaron Nesser’s green knit structure (top layer) with the electronic LED grid (bottom layer)

In order to explore the smart textile concepts, it is necessary to integrate the knowledge, skills and methods from a range of engineering and design disciplines including, for example, materials science and fashion design. While the TEK-TILES team has a shared interest in problem-solving, these fields have different ways of approaching the design process.

For example, Maia Butterfield, a materials science major at Lehigh University, had not thought about design until joining the TEK-TILES team. She describes the engineering design process as: 1) concept generation, 2) sketching, 3) prototyping, and 4) testing.

“Collaborating with my teammate Perri Vaaler, makes it easier for me to contribute to the much more conceptual and open-ended design process that the team has been engaged in during the first half of the project,” says Butterfield.

Sandra Atakori (left) discussing augmented reality during a critique session with Pratt faculty member Joseph Morris - Brooklyn Fashion + Design Accelerator
Sandra Atakori (left) discussing augmented reality during a critique session with Pratt faculty member Joseph Morris

In contrast to design processes that focus on solving a clearly-defined problem and client needs, Julian Goldman, an industrial design graduate from Pratt, describes the design process that the TEK-TILES team is using in the first half of the project as one of “exploration for exploration’s sake.”

This exploration has been primarily driven by the qualities and possibilities present in available materials such as different kinds of synthetics and natural fibres as well as electronic components such as conductive threads, sensors, LEDs and batteries.

According to Evan Huggins, another industrial design graduate from Pratt: “When you are not trying to solve a problem, you might find a solution that you might not have come up with [otherwise].”

In addition to the challenges of integrating knowledge from engineering and design, the TEK-TILES team is also reflecting on the ethics of their design decisions. For example, what might be the energy implications of smart textiles in terms of environmental sustainability? Who will have access to data that is collected by sensors that are embedded in garments and how easy or difficult will it be to gain access to the data? Are smart textiles implicitly co-opted into particular models of the economy that make the quantification, tracking and measurement of one’s health necessary or inevitable (or might they resist these impulses)?

During the second half of the project, the TEK-TILES team will be continuing their explorations but also working directly with partner organisations on specific, more focused concepts around the themes of monitoring, connecting and activation that respond more directly to human needs.

The concepts will be showcased in an exhibition titled “Fabric of Cultures: Systems in the Making,” at the Queens Museum, which opens on October 5 through December 15, 2017.

This article was first published by Laura Forlano on the website of the Pratt Institute’s Brooklyn Fashion + Design Accelerator, which mentors triple bottom line businesses that connect financial success with sustainable supply chains and ethical labour. Its production lab is a source for local and sustainable apparel manufacturing and an R&D centre for the design and production of smart garment and functional textiles.

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Events fashmash Startups technology

Investing in fashion start-ups: What VCs are looking for

#FashMash at Soho House - talking investing in fashion start-ups
#FashMash at Soho House

We recently held a #FashMash breakfast event at Soho House in London featuring three venture capitalists talking to the fashion and technology start-up space. Among them were Antoine Nussenbaum (AN) of Felix Capital, Tracy Dorée (TD) of Kindred VC and Suzanne Ashman (SA) of LocalGlobe. Here, we look at some highlights from the discussion, including what technology they’re seeing impacting the fashion industry and exactly what they look for in the businesses they invest in.


#FashMash: Given everything happening in the world right now, is it a good time to start a business?

TD: I think people start businesses because they have to solve a problem, because they can’t think of doing anything but that one thing, and I don’t see that type of macro trend of the uncertainty of Brexit or Trump or anything else that’s happening in the world affecting a great quality entrepreneur of getting started.

SA: I think it’s also easy to overstate kind of how the political turmoil over the last year has somehow impacted the funding landscape, because certainly at a really early stage we are backing entrepreneurs for five, seven, 10 years time. So, actually Brexit didn’t impact our investment cycle at all, we still made 25 odd investments last year… When we look back at our portfolio over the last 20 years we find that some of the best businesses were built in 2000 post the dotcom crash and 2008’s credit crunch, because people are looking for something new.


#FashMash: What technology are you seeing out there impacting fashion?

SA: I’d say the thing I’m seeing most of at the moment is the intersect between augmented reality and fashion. At the moment the vast majority of pitches that we’re seeing are very deep tech teams that have interesting products but not an end product that a consumer would actually wear – style is bottom priority and tech is top priority. I think the quality of those teams will improve over time as technical founders realise they need to work with someone with relevant domain experience to create a product that a consumer might want to wear. I got pitched an augmented reality t-shirt company and you know, it looks great, but at the moment it’s a t-shirt for 14-year-old boys. I can see over the next 12 months in this particular space that we’ll just see better and better things coming through.

TD: I also think we’re seeing less friction within payments thanks to mobile. People are designing experiences from a really mobile-first perspective. The first wave of online retail kind of looked like people were taking a warehouse and putting it online and it’s just a horrible sort of catalogue of walking through merchandise. But now people are really designing experiences for the platform on which they’re being delivered. I think the challenge with funding a B2C business, where you’re taking a new approach with your unique perspective, whether that’s to do with visual search or it’s to do with augmented reality or it’s to do with payments, any unique edge that you’ve got, is that you have to be able to show that the brand is going to have some type of longevity.


#FashMash: Which start-ups or new brands do you think are doing a good job and starting to prove they’ve got longevity?

AN: There’s a brand in France, which is great, called Sézane. The founder characterises exactly everything we’ve been talking about, to be extremely focused on the customer relationship and to be very true about what she’s building. It started off as a lifestyle business and grew into something very authentic with the customers.

SA: The brand I’ve seen recently that I think is executed super well, is Heist Tights – anyone that uses any form of social media will have seen their adverts. The founder there is also really interesting – he is super impressive and he’s all about the numbers. It helps if you can help us out by having some of the kind of standard metrics that we expect to see around a really strong repeat rate… Certainly things in the fashion space that we see, we really like people to have not just a product but some early numbers when they come to speak to us. From a tech perspective, I also think Hullabalook is an interesting example of two founders without a base in fashion, who have ultimately built a software enabler for e-commerce.


#FashMash: So beyond the numbers, what are you looking for in the start-ups that come to you?

TD: In whatever industry we’re looking at, we’re looking for this weird mix between the ability to think creatively, to have a unique insight, or a different perspective on something that people assume to be true. So that’s a creative vision piece with the ability to really get shit done. And to employ both sides of the brain is really hard. I’m excited for the businesses that use technology to make an existing workflow more efficient and that’s going to differentiate them in the long term.

AN: We see a new wave of people, of entrepreneurs, trying to create these companies that would connect better with, have a more authentic relationship with their customers. And from our end, we actually wouldn’t focus on the top line metrics looking at the business, but actually we would focus on something quite authentic being built in the relationship with the customer. It is not so much about the topic but about the interaction. It’s about how engaged the customers are and how engaged you are as an entrepreneur with your audience and your customers.

SA: At our stage, it’s really all about the team, it’s a little bit about the products, a little bit about the market but ultimately we’re backing a group of people as individuals to get through the next five years and overcome the many hurdles that stand in the way from where they are now to building a really big business.


#FashMash: Do you have any advice for start-ups on working with established retailers?

SA: As a start-up working with a big organisation, the one competitive advantage that you have as a small business, is speed and that’s the one reason why sometimes you have the opportunity to win against the big guys. Finding the person that’s going to really champion you within a retailer and help you navigate the maze of hierarchy and different workflows and different divisions is also so important.

TD: Two words of warning on working with really big clients: First, don’t end up doing work that is not core to your business. It’s very easy to want to work with X brand name and actually what they want you to produce is way off your product roadmap. If you think it’s going to be a massive distraction, that isn’t going to help you in your medium term vision, it’s tough to walk away and say no. The second thing is pricing. We often see start-ups working with larger brands offering heavily discounted products and it can be really hard to renegotiate that once you move from a pilot phase through to a longer-term relationship. So have that tough discussion about pricing up front.

This discussion has been edited and condensed.