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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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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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Female empowerment, marketing and the US election: Why gender messaging matters right now

Female empowerment Hillary Clinton
Beyoncé, Hillary Clinton and Jay-Z

Female empowerment has been a growing theme within marketing departments over the past couple of years – driven forward by rising political and cultural awareness around gender equality and beyond. Memorable moments from brands including Dove, Pantene, Always and Under Armour have powered a culture of questioning the stereotyping of women, enabling and fuelling the conversation on a global stage.

In early 2016, a US agency called Badger & Winters then introduced a campaign called #womennotobjects, which pushed for the advertising industry itself to stop objectifying women in its messaging – identifying a broad variety of brands who typically do so, including from fashion the likes of Tom Ford, Calvin Klein, Marc Jacobs, American Apparel and Balmain.

“Sex doesn’t sell” was the message from the agency’s co-founder, Madonna Badger, at Cannes Lions this year, backed up by a study showing that the objectification of women impacts every single KPI, to the extent that women today have less interest in wanting any sort of interaction with such brands at all. Another study by The Ohio State University found that “as intensity of sexual ad content increased, memory, attitude, and buying intentions decreased”.

Jim Winters, president of Badger & Winters, added: “There’s always a smarter, more creative way to tell a brand’s message that doesn’t rely on demeaning women, but in fact does the opposite – it emotionally engages women in a respectful way.”

Backing this sentiment further during Cannes Lions came a new pledge from Unilever. Having found that 40% of women do not identify with the women in its ads, it launched an initiative called #unstereotype, which is a global ambition for all of its brands and the industry at large to advance advertising away from stereotypical and outdated portrayals of gender and instead deliver fresh campaigns that are more relevant to today’s consumer.

Let’s not forget that advertising can be a powerful force in leading positive cultural change, with progressive portrayals proven to not only be better for society, but better for brands, Unilever highlighted.

Which leads us to the US election. What could have been a cultural moment pushing forward the potential of the first ever female president in the history of the nation, has become a scandalous depiction of modern society led by an ignorant, narcissistic, not to mention sexist, white man (to use some of the more polite words). In fact, the majority of coverage of late, has indeed been around Republican nominee Donald Trump’s own objectification of women.

From one debate to the next, the entire race has degenerated into a mudslinging contest, rather than one based on policy – which the media has eagerly covered time and again. Hillary Clinton has consequently frequently appeared to be defending herself against Trump and outlining what she’s not, rather than striding out in front of him to argue what she is. The interesting thing surrounding that has been a relative loss of understanding around what Clinton’s merits as an individual and a politician really are.

It’s a familiar adage – a woman in leadership comes across as bossy rather than decisive or powerful as a man would. An article in The Atlantic summarised the amount of public hostility that goes toward overt displays of female ambition as being particularly profound for Clinton (the gender-based paraphernalia at the Republican National Convention especially mindblowing in support of this, with signs reading “Life’s a bitch: Don’t vote for one” for instance).

According to the Public Religion Research Institute, Americans who “completely agree” that society is becoming “too soft and feminine” were more than four times as likely to have a “very unfavorable” view of Clinton as those who “completely disagree”, The Atlantic explains.

Clinton is worth more than just the fact she’s a woman, of course, but this election was always going to be about gender for that very reason. Trump’s undeniable stance actively knocking (not to mention sexually assaulting) the women around him, has only made it more so.

One of the most memorable campaigns from Clinton for the election as a result, shows the negative comments Trump has said about women over the years, reflected through our daughters. Notably, it was targeted at married women (who traditionally would vote Republican) in the suburbs of swing states.

“I wish I didn’t have to say this, but, indeed, dignity and respect for women and girls is also on the ballot this election,” Clinton said at a rally in North Carolina alongside Michelle Obama.

Trump even provided the ultimate feminist moment himself when he called Clinton a “Nasty Woman” during the final debate – in doing so summing up much of the stereotypical view of women in power that’s long been held, and that advertising is finally trying to rebuke. That phrase was then reclaimed and turned into a cry for the future: “Nasty Women Vote” became the tagline.

Just this weekend Beyoncé then took to the stage to support Clinton. “I want my daughter to grow up seeing a woman lead our country,” she said. Most poignantly however, she took a controversial comment made by Clinton in the early 90s and put it on the screen behind her. “I suppose I could have stayed home and baked cookies and had teas. But what I decided to do was pursue my profession,” it read. In doing so it was instantly reclaimed as a feminist mantra.

Female empowerment Hillary Clinton
Hillary Clinton’s controversial 1992 quote turned into a feminist mantra by Beyoncé during the US election

Turn to advertising, and there’s currently a lot of work around this message of female empowerment from numerous global brands once again.

Take H&M as an example. Its latest campaign, She’s a Lady, is a “badass commentary” (as the Huffington Post puts it) on what it really means to be a woman today. It features actress Lauren Hutton through to transgender model Hari Nef, among others, being real and being powerful in their own individual ways – winning in the board room, manspreading on the subway, you name it.

Then you’ve got Georg Jensen (albeit a Danish design house), which recently unveiled a spot called You Can Never Be Too Much You, which similarly shows how capable women are. Starring award winning director Susanne Bier, Motocross rider Behnaz Shafiei, world champion boxer Cecilia Brækhus, award winning comedian Sarah Kendall, and the world’s best female chef Dominique Crenn, it pushes back against the idea that being too loud or strong or provocative are negative traits. Again, they’re not, after all, seen that way for men. Sound like a portrayal of the candidates in question? I’d say so.

Even Netflix recently nodded to powerful women – highlighting its leading actresses in a spot called “She Rules” that aired during the Emmys this year. “Optimistic, fearless, brave, strong and relentless – long may we reign,” the voiceover narrates. A follow-up social spot mimics and counters the sort of elegant behaviours expected from women in society with another series of badass characters.


None of those, even in the storytelling around them, directly acknowledge the woman bidding for the top job in the US, though it could be assumed they relate to it. That’s not an unusual move pre-election of course, with the majority of brands keeping a neutral stance during a race to rather ride the wave of association once the winner is announced (see Obama as a prime example).

The question in this instance, given the potentially historical ground it’s covering, is whether brands may have willingly associated themselves more directly had the contest been a more positive one?

Never before has an election felt quite so divisive and vitriolic. No surprise then brands are opting to play it safe and keep any sort of connection truly at arm’s length.

There have however been endorsements by individual business leaders and a handful of companies. One of the most significant for Clinton came from Vogue magazine. “Vogue has no history of political endorsements. Editors in chief have made their opinions known from time to time, but the magazine has never spoken in an election with a single voice. Given the profound stakes of this one, and the history that stands to be made, we feel that should change,” read its post about it. It referenced her experience in foreign policy and her support of gun control legislation all the way through to LGBTQ rights, immigration reform, women’s rights and health care, as key reasons.

That reference to “the profound stakes of this one” and the “history that stands to be made” were seemingly not just being about a powerful woman running the country, but the need to keep Trump out. “For all the chaos and unpredictability and sometimes appalling spectacle of this election season, the question of which candidate deserves to be president has never been a difficult one,” it added. “Two words give us hope: Madam President. Women won the vote in 1920. It has taken nearly a century to bring us to the brink of a woman leading our country for the first time.” It speaks of Clinton leading an optimistic, forward-looking and modern America.

And therein lies the positivity for Tuesday, November 8. As my friend and start-up founder, Carl Martin, tweeted this weekend: “We talk a lot about the fear of what happens if Trump wins. But man, imagine the monumental positive shift that happens if Clinton [does].”

Indeed, just imagine.

For one thing, that wave of messaging around female empowerment will never have known such a ripe time to be powered forward. It will need to be done well by brands to feel authentic in the noise of what follows, but expect a flurry if it does.

A woman is on the cusp of leading gender equality from the front. Now we just need American women at large to go out, vote and actually get her there. Not just because she’s a woman, but we should certainly be celebrating the fact she is.

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Comment counts: How AI is making online fashion truly personal

Artificial intelligence promises benefits for both retailers and their customers, from personalised discovery to the surfacing of entire catalogues, writes Andy Narayanan of Sentient Technologies.

Sentient Technologies artificial intelligence
Sentient Technologies

What’s the biggest difference between shopping online and shopping at a store? Online gives you the convenience of shopping in your robe, getting products shipped directly to your house, browsing an endless aisle of choice after choice, the ability to price check tons of retailers on the same dress, and a whole lot more. In a whole host of ways, shopping online is just, well, better. But there’s one thing that e-commerce sites have struggled with for years: the personal touch.

For many of us, when we head into our favourite stores, one of the best parts is interacting with a great salesperson. And what exactly makes a great salesperson? They get us. A great salesperson listens and understands what you want. They know which brands run a little small. They can intuit what your style is based on how you’re dressed and the clothes you’re trying on. They can head to the back to find you something they know you’ll love.

This, as we mentioned, is notably missing online. Instead of great salespeople, we have a search bar and little checkboxes to click to browse the aisles. We’re left browsing that so-called endless aisle in hopes of finding something we like. In essence, we’re trading the personal touch for convenience.

But new advances in artificial intelligence (AI) are changing all that. They bring far more personalisation than what you see at your typical fashion retailer and promise massive benefits for both retailers and their customers. Which, of course, is exactly how it should be.

So let’s get back to that online shopping experience for a second. You know the one I’m talking about. After all, most sites, when you get right down to it, have very similar interfaces. You’ve got a search bar, some facets to help narrow your search (those checkboxes on the left with options for brand, colour, size, price, etc.), and a grid of product images. If you don’t like what you see, you can click through the page numbers on the bottom or click into a product detail page to find more. And really, that’s most of what shopping online actually is.

But with AI, it’s different. Because AI can understand the product images themselves, it allows for a whole different kind of shopping.

A smart AI – like the one my company Sentient makes – looks at an image in hundreds of vectors. That means it can identify things that are tough to describe, like the placement of a logo, a certain kind of fringe, the height of a heel in relation to the rest of shoe, etc. But that’s not what really makes the AI feel personal to users. What does is how the AI reacts to their behaviour as they shop, in the moment.

So say a user starts with a normal search for a red dress. Each time she clicks on a dress to check the price or look at the product detail page, she’s sending the AI a signal. And the signal is simply that she’s interested in the product. What makes things personal is that the AI actively figures the similarities between the products the shopper is looking at. Is it a particular shade of red? The length of the dress? The scoop of the neckline? And as it’s learning what she wants, the AI can start suggesting dresses that fit her browsing patterns, not based on retailer metadata or purchases she’s made before, but from just the couple of clicks she’s made in the past few minutes.

That means, effectively, that an AI can figure out preference and style for that user. It knows what she’s looking for in a red dress, not just that she’s interested in a broad category of red dresses. In other words, it finds the red dress, not just an endless aisle of red dresses.

For retailers, implementing something like this is actually quite easy. It sits on the front-end of a site (no backend integration is necessary) and the AI can be specifically trained to their catalogue. All it needs, for example, is product images. After that, you can use the AI in your existing user flows, product detail pages, recommendation pages, you name it. It’s really up to retailers as to how they want to leverage it.

And the benefits are tangible. AI can help with important metrics like average order value, add to cart, and more, but one of the more interesting proof points is that AI helps expose the entirety of a retailer’s catalogue. That’s because, instead of using old recommendation systems (stuff like “users like you bought this”) or giving primacy to items that are already popular, an AI can look at the images themselves and recommend products that a user may never have found, because it was buried on page 40 or was from a brand they didn’t recognise or because the manufacturer didn’t give a retailer the right metadata.

In fact, our first customer surfaced a full 92% of their products in the first month they implemented. Which backs up a key thing we should underline here: AI really does know your entire catalogue. And as it learns, it helps a shopper find just what they want.

Other folks are taking different approaches to personalisation, of course. Chatbots are having their moment. Sites like The North Face have implemented a sort of Q&A flow that uses real AI to suggest products. A while back, Victoria’s Secret used a non-AI powered questionnaire to help users find the sizes and styles they liked. But what excites me more, is personalisation that adapts and reacts to buyer behaviour in the moment. One that learns style, intent, and preference as users browse. One that gives a shopper access to a retailer’s entire inventory.

AI learns, adapts, and gets the customer. It figures out what they like even when they might have trouble articulating it themselves. AI understands intent and style so that shoppers can stop scrolling through page after page of red dresses and instead, in just a few clicks, find the perfect red dress, just like a great salesperson would do. That means getting the key benefit of brick-and-mortar shopping without having to leave the couch. And that’s the sort of thing that wins you customers for life.

Andy Narayanan is the VP of Intelligent Commerce Sentient Technologiesthe world’s highest-funded AI company, having raised over $140M. Its platform and technology has been in development for over nine years. 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.

Categories
business Comment Editor's pick product sustainability

Pushing purpose over profit: the challenge of credibility in sustainable fashion messaging

sustainability
Syrian refugees working in a Turkish clothing factory producing for brands including Marks & Spencer and ASOS were at the centre of a new BBC Panorama documentary this week

The fashion industry produces over 100 billion items of clothing worldwide each year, with three out of five of those ending up in landfill within the same 12 months, according to McKinsey & Company. Zara produces 24 collections a year, while H&M’s 12-16 lines are refreshed weekly. Overall, public consumption is up a massive 60% since the year 2000. And yet it seems demand and greed is finally catching up with the shopper’s consciousness, and brands are taking note.

“Being green” is no longer a dirty term. A recent report by Nielsen showed that in 2015, global sales of brands that proved a commitment to sustainability grew by 4%, while those without grew less than 1%. The same study shows that as younger generations seek more value from what they consume, 62% of consumers see ‘brand trust’ as the top sustainability factor.

Tapping into an increasingly demanding and informed shopper mentality, brands are now adopting a sustainable philosophy to push a message of purpose over profit; meaning over mindless consumption. But marketing credibility to a skeptical generation – where 50.9% research a brand’s ‘giving back’ claims before buying – is proving to be a challenge where fewer brands are coming out on top.

A recent demand in eco-friendliness explains the success of companies that were built with that Millennial mindset. Reformation, a cool girl clothing brand hailing from Los Angeles, lives by the motto “We make killer clothes that don’t kill the environment”, illustrating the point that talking about “being green” doesn’t have to be alienating to customers. It deploys the RefScale tool to monitor the impact each of its garments has on the environment, while the RefRecycling programme allows e-commerce shoppers to use its delivery box to send old clothes back to the brand, who will handle recycling.

sustainability
Reformation’s RefRecycling scheme

When looking at the issue of transparency in production, Everlane gives customers different choices when buying online, which serves to not only explain the value of its merchandise, all made in the USA, but to force people to think of how they are spending their money. The “Pay what you want” scheme allows shoppers to pick how much they want to pay for an item out of three options, while highlighting that the less they pay, the less the brand will be able to invest on production and internal growth.

With 73% of Millennial consumers being willing to pay more for sustainable goods, it’s likely the approach will encourage positive behaviour.

But how can brands who have always been part of the fast fashion phenomenon respond? Enter H&M, whose sustainability focus has moved beyond a higher priced Conscious line and pledge for sustainable cotton, to encouraging customers to bring old clothes into stores for recycling. Although generally a great idea, the practice, now adopted by a handful of high street brands including Zara, raises interesting questions about its intentions. More often than not, customers who donate also receive a discount on their next shop, meaning they are propagating the reckless consumption problem.

Andrew Morgan, director of film, The True Cost, recently spoke to The Telegraph with skepticism: “It’s marketing that confuses well-intentioned people into believing there is no harm.” While for some this can be seen as greenwashing, fast fashion brands seem to always get caught in the “damned if they do, damned if they don’t” cycle.

H&M
H&M

And yet problems around fast fashion and sustainability run a lot deeper than the fast pace of its production and delivery cycles, with a list of complex issues at every stage of production, including subhuman factory conditions, as ASOS has recently come under fire for. Further retailers including Marks and Spencer, Mango and Zara were also central to a BBC Panorama documentary just this week about Syrian refugees working in Turkish factories to make their clothing.

Primark, which has recently won a sustainability award for a pilot programme helping thousands self-employed women farmers better their conditions, is often under criticism for not disclosing enough details about its supply chain too, such as where it sources its cotton from. The argument is that more transparency is needed, even to outline shortcomings against efforts being made to improve.

Speaking to Glossy earlier this year, Kathleen Wright, founder of Piece & Co, remained optimistic: “Wouldn’t it be a dream if [fast fashion retailers] stood up and said, ‘we are going to do one less delivery this year, we’re putting too many clothes out there, and we’re going to take a profit cut?’. The race to the bottom in my opinion is very real.”

While for some brands ‘doing good’ is at the crux of its existence, such as Tom’s one-for-one scheme, bigger, more established brands might find it more challenging. “People used to think about sustainability in terms of brands,” said Wright. “But what do we do if we can’t redo our entire brand? If you’re J. Crew or Tory Burch you can’t rebrand as a sustainable brand. You don’t want to. So you can show you’re making positive change in your supply chain.”

One example lies in Patagonia’s famous Fix Stations, which have become a staple at their shops across the globe. Customers can bring in old Patagonia garments and camping gear to get them stitched and fixed, emphasising the message that if you buy and wear responsibly, you are doing your part to keep the environment in better shape.



The sportswear label conveys that throughout all channels, such as in its recent capital investment in Yerdle, a peer-to-peer marketplace that allows users to swap items, instead of buying. Patagonia’s stance on throwaway culture is refreshingly self-aware; it admits to being part of the consumption problem while inviting others through its Worn Wear events to join them in taking the radical approach of repairing over replacing.

Similarly, customers who buy a pair of jeans at Swedish label Nudie are eligible for a lifetime of free repairs at their stores. “It is deeply rooted part of Nudie Jeans to encourage the care of things that actually get more beautiful as they age. Things that bear your own history and are timeless,” says the brand.

In fact, recently the Swedish government, aiming to tackle “throwaway culture”, has announced it will introduce tax breaks on repairing items, such as bicycles and washing machines, aiming to persuade people to fix rather than buy new items.

To celebrate its 80th anniversary, Hermès has also launched a series of pop-up spaces allowing consumers to dye and clean their used scarves to give them a new lease of life. Hermèsmatic, launching in Strasbourg, Amsterdam, Munich and Kyoto, resembles a laundromat kitted with orange washing machines, in-keeping with the brand’s quirky approach to talking about its history. Encouraging customers to cherish their items throughout the years is perfectly aligned with the luxury house’s ethos of creating heirlooms to be passed down generations.

sustainability
The Hermès Hermèsmatic scheme

This whole “make do and mend” mentality touches upon a need to feel a deeper connection with products that people consume. There’s mileage to be had out of ownership around items that tell a story – a nostalgic tool that has been deployed by brand marketers for decades.

The idea of fixing something rings genuine because it forces the consumer to commit to what they are buying and think responsibly about its lifespan. By encouraging repair, brands are fostering a deeper connection with the customer that goes beyond one sale, while emphasising the quality and durability of their products.

Using sustainable semiotics in advertising and marketing is no longer enough. Brands that aspire to lead change must embed their higher purpose in everything they do. Credibility through authenticity will come out on top. There’s a long road ahead, but a collective push being led increasingly by the consumer to get there.

Categories
business Comment e-commerce Editor's pick technology

The future of click and collect needs to be more service-oriented and AI has a part to play

click and collect
Could click and collect become a warmer more enriching experience with some personalisation thrown in?

30 seconds. That’s the time stamp being aimed for in a number of retailers’ click and collect services – an objective to get the customer in and out in the quickest way possible. It’s an ambitious goal, but a level of convenience that’s highly relevant, not to mention desired, by time-starved customers.

Arguably for fashion, however, there’s a much smarter move. Nordstrom, for instance, is starting to prove the need for something a little more personal in the transaction too.

It has just introduced a new “Reserve & Try In Store” feature to its app – a way to help make the shopping experience easier for customers who like to touch, feel and try on items before buying them. The basic premise is that you reserve up to 10 items on your smartphone, select your closest store and then head to it in person where a personalised fitting room is waiting for you with those specific pieces. You don’t part with any cash until you decide what it is you want to buy.

It’s all about the convenience of online shopping but with some real world experience thrown in; all of that negating the need to drag a package home, try the items on once you get there and then realise what it is you don’t want before going through the often laborious returns process. It follows others including Westfield, Asos and Jaeger trying out real-world fitting room services attached to online orders in the past.

The whole thing is also just a lot warmer. Let’s face it, no matter where you go, the majority of click and collect systems feel like a cold and hard transaction. You show up to a counter often hidden at the back of one of the floors, stand in line for a considerable amount of time (despite that 30 second goal), hand over your information and wait while the parcel is found for you. Generally speaking, when it comes out, it’s not even wrapped in the nice packaging you might get in store, but in the sort that usually comes with an online sale.

Everything about it is impersonal. In fact, there’s little to differentiate it from standing in an Argos store waiting for your number to be called to collect the box on the rack you’ve been waiting for. Great for Argos, not so suited to a tactile fashion brand.

Argos click and collect
What click and collect looks like at Argos

And all of that comes at a time when consumer demands have never been higher. Click and collect is an expectation now; not a novelty but the norm. If you don’t offer it, you’re behind.

In fact, omnichannel at large is an expectation; 68% of millennials now demand an integrated, seamless experience, regardless of the channel, according to Accenture. With services like click and collect, there’s more need than ever therefore for fashion brands to do something different to stand out from the competition.

After all, 78% of millennials also say they’d rather now spend money on desirable experiences over products. Never before has the experience economy been so ready for exploitation. Having a fitting room attached is almost not enough of a leap therefore, which is why artificial intelligence (AI) has a part to play.

Beyond the offer from Nordstrom, what if the reserve opportunity became a personal shopper service? Not in the traditional sense, but in a way that means those 10 items you’ve reserved also come with further suggestions for items you might like. Some basic data insights tied in, and the system should be able to recognise other pieces you’ve browsed ahead of time, perhaps lingered over for a little longer on the app, watched the videos for and so forth.

Add in a recommendation engine, that AI in action, and it could also include another rail with looks it knows match your tastes, coordinate with the ones you’ve reserved and even marry up to your purchase history. All of that done on an opt-in basis, of course. It’s a ripe opportunity for upsell and cross-sell, not to mention with an engaged customer already committed to dwell time.



That fitting room you try it on in should also be a connected one, like the Polo Ralph Lauren experience from Oak Labs (as above); with a sales associate on speed dial to get you other sizes, colours and more, as well as immediately check you out. This heightened version of convenience is also the perfect move for renewed clienteling; more than just a member’s club with a stylist on hand (as Nordstrom also offers), but a hands-on personalised experience enriched by machine learning.

This would suit luxury brands – especially those already operating in a relatively connected space, like Burberry. But so too could it run the gamut of digitally-savvy high street retailers, department stores and beyond.

Yes there are going to be those consumers who want to get in and get out; pick up their order and leave, make use of lockers, drive-thrus and more, but there are also those who would like something a little more enriching, seamless and useful for the time spent. A personalised version of what’s otherwise become nothing more than a transactional Argos encounter, rather than an engaging brand experience.

Categories
Comment social media

Comment counts: Getting your influencer game right is more important than ever

Luxury brands need to prioritise how influencers contribute to the balance of honouring brand heritage and driving their bottom line, says Glenn Ebert, senior strategist at SapientNitro.

Influencer marketing
Selena Gomez now commands $550,000 for a post on Instagram. (Image via @selenagomez)

Ad Week recently deemed Selena Gomez the most lucrative influencer for brands to collaborate with on social media. She charges $550,000 for a post on Instagram. “Instamodels” Kendall Jenner and Gigi Hadid (who recently launched a social-media driven capsule collection with Tommy Hilfiger both via social and in-store) command up to $300k a post.

There is no disputing that influencer marketing across all facets of the fashion industry has proven itself to be more than just a trend. Yet, as the fees influencers charge per post continue to rise, how do brands justify the spend?

The first question for defining an influencer strategy is, how do brands decide on which influencer to collaborate with? The unfortunate truth is many fashion brands are guilty of vetting most influencers from a sense of “gut feeling”; be it from members of a brand’s digital team, the rolodex of creative director, or the little black book of the public relations team. The suggestions can come from anywhere. I once heard of a CMO whose 13-year-old son suggested who to partner with, based on who he thought was “cool”. Either way, qualitative assumption and emotion often outweigh consideration of analytics and impact on the bottom line when developing influencer content and collaborations.

No one likes to quantify his or her friends. However, given the dire times and budget crunches some players in the industry, including the likes of Burberry, HUGO BOSS and Prada, are facing, it’s become a necessary evil. From shallow metrics like reach and engagement with content, to more serious matters of getting the most out of your production shoot spends, influencer marketing can be a smart move for luxury brands if the fit and timing is right. But it can also be a huge liability if executed poorly or without a cohesive creative vision.

Beyond defining benchmarks and measures for success to justify influencer spend, including comparing content engagement against brand performance, cost-per-engagement and the ability to convert to sale, brands also have to be aware of the legal minefield and potential consequences of influencer collaborations.

American ad regulatory agency the Federal Trade Commission (FTC) has stepped up its efforts to go after brands and influencers alike who don’t disclose sponsored content more explicitly, recently making examples out of social media powerhouses such as L’Oréal and Aimee Song (of popular fashion blog Song of Style) for not properly disclosing content. While not as blatant in making an example of luxury brands, the UK regulatory agency ASA also recently published more explicit guidelines for YouTube vloggers, outlining the obligation they have to make promoted content and sponsors more plainly clear.

Meanwhile, however, the data doesn’t lie. Many brands are finding content created from influencer collaborations consistently outperforms its in-house content. Furthermore, it’s produced at a fraction of the cost of the once-standard, multimillion-dollar photo-shoots with celebrity photographers, where the outcome is often better suited for print.


A photo posted by Susie Lau (@susiebubble) on


Yet, as emerging mass brands like Brandy Melville rely entirely on them, the temptation is strong for luxury brands to become too invested and drunk off influencer campaigns, given the strong response the content receives on social channels. If recent critiques and headlines from the old fashion guard are any indication, luxury brands walk a tightrope of perception collaborating with influencers.

With the exception of newly adorned style saviour Alessandro Michele’s spring/summer 2017 presentation for Gucci, much of what defined the recent Milan Fashion Week was not the clothes, but rather a proclamation from industry bible Vogue against influencer culture.

In their respective recap of the week, various editors voiced their annoyance on influencers and style bloggers soiling any air of prestige in Milan, and how brands such as Versace and others should be praised for not giving into a trend, whilst deeming the influencer and blogger presence at some shows “horrible” and “pathetic”.

While influencer elite BryanBoy and Susie Bubble were almost instantaneous in their rebuttals on their own social media channels, calling it hypocrisy and old school “bullying”, it epitomised just how polarising yet poignant the issue has become within the industry.

Influencer marketing, like fashion, is not a one size fits all approach. As the practice continues to gain momentum and varying levels of acceptance across the industry as a whole, it should be an increased priority for each brand’s creative and social teams to better define how influencers contribute to the balance of honouring brand heritage and driving the bottom line.

As tempting as the bandwagon may be, brands still should be highly selective in whom they seek out to collaborate with. This even more so if the said brands are seeking to maintain (or attempt to attain) “luxury” status: a construct today’s social culture and influencers are helping redefine with every new post and engagement.

Glenn Ebert is senior strategist at SapientNitro. 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.

 

Categories
Comment e-commerce

Comment counts: Burberry’s ‘see-now, buy-now’ move highlights need for luxury brands to embrace 1-2-1 marketing

Today’s luxury consumers come in many different shapes and forms, making a one-size-fits-all mode of marketing no longer good enough, says Mike Cullis, CEO of creative direct marketing agency Soul.

Burberry LFW see-now, buy-now
Burberry’s see-now, buy-now show at London Fashion Week

Much has been made of Burberry’s decision, starting at London Fashion Week, to make its catwalk collections immediately available in store and online. And rightly so. It’s a bold move that points towards luxury not only responding to customer need but anticipating it.

This comes at a time when the luxury marketing model is under pressure to evolve due to an over-reliance on a “one-size-fits-all” approach to communications; a prevailing attitude not only in fashion but also at the luxury end of sectors such as automotive and travel.

Of course, the luxury sector has seen tremendous growth in recent times. The growth of global wealth has had something to do with this, including the rise, and current slow down, of new markets such as China. However, even in established markets, the UK included, luxury and high-end premium goods are an affordable consideration for many more people than used to be the case.

Accessibility has changed in terms of the offering. Whether through the range of products (from beauty, small accessories, bags, off the rail to haute couture) or the diversity of the range, which now includes diffusion brands and partnerships.

The result is that luxury and premium brands have actually entered the mainstream, and this means that their customers come in many different shapes and forms. This, in turn, means that luxury brands need to give far more thought to recognising and engaging these various customer types.

Burberry LFW see-now, buy-now
Burberry’s see-now, buy-now collection at London Fashion Week

While the little black book of your top customers still has value, simply sending a one-size-fits-all email to everyone else in the world isn’t good enough. And the problem with this type of email broadcast is that it has the potential to cheapen your brand, because in the context of most people’s shopping and retail experiences it looks unsophisticated, uncreative, and even low budget.

Luxury brands get it right in that there is no doubt that the top end customer remains the most valuable and requires everything from VIP experiences through to 1:1 personal styling. But there’s so much room for improvement.

A combination of data analysis and research provides the opportunity to uncover and recognise people’s behaviour, attitudes, and motivations. This then helps to inform an understanding of the potential of different customers, provides an insight into what the purchase cycle and customer journey looks like, and identifies the channels with which to engage customers and which buttons to press (product, styling, messaging) to realise this potential.

There’s a related creative challenge in that luxury brands’ approach to creative communication is quite protectionist. Keeping the brand guarded and polished is a pre-occupation for many in the luxury market but, culturally, many of these brands view personalisation and flexing the creative product as quite alien.

Yet personalisation on a large scale doesn’t necessarily equate a brand with cheapness. Far from it because it has the potential to up the ante for luxury brands. If small companies, with smaller budgets, such as Thread.com can deliver an inspired, personalised, CRM experience through their website and email, there is no reason why others with larger resources can’t.

Viewed through this lens, while Burberry’s efforts at London Fashion Week are to be applauded a greater emphasis on 1-2-1 marketing would bring them into sharper focus.

Mike Cullis is CEO of creative direct marketing agency Soul. 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.