Categories
business Editor's pick product Retail technology

Why Nike is betting on an Amazon-free future

Last month, Nike announced it would be pulling all of its products from Amazon in a bid to refocus its distribution strategy and “elevate consumer experiences through more direct, personal relationships”. 

Leaving one of the world’s biggest e-commerce platforms after a two-year pilot is a bold move. So what does the divorce mean for the sportswear giant?

In leaving Amazon, the company is joining a roster of others, from IKEA to Birkenstock, who have tried and failed to make it work on the platform. Amazon has developed a poor reputation when it comes to how it treats its sellers – and it’s doing very little to change it. But as retailers depart the platform to deliver a more personal customer experience – while keeping a tight leash on their product offerings – the e-commerce giant needs to start thinking damage control.

Selling on Amazon comes with an ever-changing set of challenges. While it has been busy expanding its fashion offering, the website is still designed for the convenience shopper, and not the one looking to be wowed or to discover a new favorite brand. Search ranking results can be confusing – for example, searching for sports shoes will not necessarily bring up the Nike sneakers immediately at the top of the page, even though it is a market leader. It is also often hard to find out whether you are buying the item directly from the brand, or a third-party seller.

Then there is the big elephant in the room: counterfeiting. Recently, The Wall Street Journal wrote that the website “increasingly resembles an unruly online flea market.” For the US site, it is now attracting Chinese sellers to post their goods directly to consumers, rather than through North American middlemen. This means a proliferation of sold goods that are deemed either counterfeit, or banned or unsafe for consumption, which are virtually impossible to keep track of.

But Nike’s exit is coming from a privileged position. It has built a community outside the retailer’s website, and will exist just fine without it. For brands of its caliber, this is a good chance to take a leaf out of the direct-to-consumer rulebook and create a distribution approach that not only gives it more say, but enables more direct conversations. 

Nike is now working on strengthening its relationship with other smaller retailers. At Foot Locker’s new NYC flagship, for example, NikePlus app users can reserve shoes in advance and pick them up from dedicated lockers.

On a direct-to-consumer level, it is launching services like the Nike Adventure Club, a sneaker subscription for kids aged 2-10 where for a monthly fee, they receive a certain number of sneakers a year. The brand is targeting time-strapped parents who live in areas that perhaps don’t have a shoe store nearby. Instead of restoring to the convenience of Amazon when their child has moved up a shoe size, Nike is hoping these parents will choose a box service with a trusted brand instead.

This is also a chance for the brand to test out the subscription model, and potentially apply it to other consumer groups in the future, says David Cobban, general manager of Nike Adventure Club.  “We’re starting to think about what other athletes have problems that could be very easily solved by a subscription,” he said. “This is the beginning of something pretty exciting for Nike.”

For all of the sales volume that Nike will be losing by exiting Amazon, the sports brand is hard at work building a tight strategy where convenience meets personalization, which will likely pay off in the near future. 

This is perhaps where Amazon continues to falter – both in the eyes of its vendors and consumers. Next day delivery and low prices come at the price of the user experience, which still leaves a lot to be desired when it comes to discoverability and bringing up (relevant) recommendations. 

Consumers may currently be fully onboard with the endless hamster wheel of speed and low value, but only time will tell if that will be enough to fulfill their more nuanced needs, such as creating emotional connections. Nike is betting on the latter.

How are you thinking about experience? The Current Global is a transformation consultancy driving growth within fashion, luxury and retail. Our mission is to solve challenges and facilitate change. We are thinkers and builders delivering innovative solutions and experiences. Each of the rules referenced above is matched by one of our products and services. Interested in how? Get in touch to learn more.

Categories
business Editor's pick sustainability technology

SXSW 2018: The RealReal on how technology will help stay one step ahead of counterfeiting

The RealReal
The RealReal

Future technologies will not only help curb the counterfeit market, but act as vehicles for brand storytelling, said Graham Wetzbarger, chief authenticator of second-hand e-tailer The RealReal at SXSW.

The advent of technologies that combat fakes may have hit strides over the past few years, but the problem is far from being tamed, he said. Even though the USA counterfeit industry experienced an 8% uptick in seizures at border control from 2016 to 2017, it is becoming increasingly difficult to target illegal goods from navigating from country to country. At present, only 10% of counterfeit goods are seized, and the industry retains $1.7 trillion in value globally, said Avery Dennison’s director of digital solutions Julie Vargas in the same session.

The challenge is outsmarting counterfeiters, who are operating in a much more granular manner, Wetzbarger noted. While in the past goods would arrive in large quantities via shipping containers, they are now coming in via airmail through local courier services. Illegal goods are also produced and retailed through a variety of channels, from very real looking, but fake e-commerce websites, to the dark web and last mile counterfeiting.

For young and label-hungry consumers in cities such as Seoul and Moscow, buying fakes is the most viable option when import taxes are too high, or there is little to no access to on-trend labels such as Off-White and Vetements, said Wetzbarger.

Tapping into the digitally-savvy behaviour of these shoppers, counterfeiters are becoming influencers in their own right and gaining a loyal following on social media. Hypebeast online publication Highsnobiety now runs Counterfeit Culture, an online video series that explores the culture globally – an indication that beyond supporting an illegal trade, fake goods are now becoming a social currency among a niche group of consumers.

Beyond traditional tools of authentication – such as inspecting the material and construction of goods – Wetzbarger also stressed the importance of introducing tags to not only tell the product’s story, but also act as an extension of the brand. In this matter, new technologies such as blockchain are starting to emerge to enable brands to have more control of tracking and developing content for individual goods.

“There’s a secret sauce to always staying one step ahead of counterfeiters. When talking about the secondary economy it’s not a perfect science, but technology can help with that,” said Vargas of Avery Dennison.

The deployment of blockchain will also go hand-in-hand with a consumer need to be constantly connected and informed about the provenance of their purchases. Wetzbarger suggested that handbags, which are the largest product category on The RealReal platform, could tell the story of previous owners if they chose to participate, for example. He also talks of a future in which a Clueless-type of digital closet, where connected labels can track what garments the consumer has, how often they are used, and what items are missing in their style repertoire.

As recently seen by Stella McCartney’s announcement of collaborating with The RealReal to authenticate and officially sell her label’s merchandise, there is a strong element of sustainability attached to buying from the circular economy. For consumers, it means having another home for an item that may no longer be to their taste, but still holds quality and meaning. For labels, it is continuing the lifecycle of a brand and strengthening its value, said Wetzbarger. “Brands are getting behind this because they want their products to hold equity.”

Adding a digital ledger on the blockchain to every product could have a myriad of benefits not only to first-time buyers, but to re-sellers, therefore. “How interesting would it be if a product was always telling data?” concluded Wetzbarger.

Categories
business digital snippets e-commerce product social media sustainability technology

What you missed: Amazon’s AI designer, sewing robots at Nike, AR iPhone apps

Inside the Grabit robots making Nikes
Inside the Grabit robots making Nikes

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
  • Amazon has developed an AI fashion designer [MIT]
  • A new t-shirt sewing robot can make as many shirts per hour as 17 factory workers [Quartz]
  • These robots are using static electricity to make Nikes (as pictured) [Bloomberg]
  • A preview of the first wave of AR apps coming to iPhones [Techcrunch]
  • In a Zara world, who orders custom clothing? [Racked]
  • What happened to wearables? [BoF]

BUSINESS
  • Matchesfashion.com sells majority stake to Apax after fierce bidding war [NY Times]
  • Making sense of Chanel’s secret filings [BoF]
  • Is Nordstrom the next acquisition target for Walmart or Amazon? [RetailDive]
  • North Korea factories humming with ‘Made in China’ clothes, traders say [Reuters]
  • Is counterfeiting actually good for fashion? [HighSnobiety]
  • C&A Foundation highlights ‘gaps to overcome for clean and circular fashion’ [Fashion United]

SOCIAL MEDIA
  • ‘Game of Thrones’ actor Maisie Williams will kick off new Twitter series for Converse [Creativity]
  • How Instagram and Snapchat are benefiting from Facebook’s declining teen and tween numbers [AdWeek]
  • Facebook furthers WhatsApp monetisation efforts with verified business pilot [The Drum]
  • Condé Nast and Facebook are debuting a virtual reality dating show [AdWeek]

MARKETING
  • Zalando turns festival into three-day live marketing campaign [BoF]
  • Donatella Versace works with eight creatives for new versus ads [WWD]
  • 40% of consumers want emails from brands to be less promotional and more informative [AdWeek]
  • In first-ever TV ad, Patagonia targets Trump administration [MediaPost]

RETAIL & E-COMMERCE
  • What is Amazon, really? [Quartz]
  • How Westfield is combating the Amazon threat with digital upgrades at its malls [Digiday]
  • Betting on brick-and-mortar: Alibaba’s billion-dollar retail experiment [Forbes]
  • H&M’s Arket encourages transparent shopping on its new e-commerce site [WGSN]
  • Uniqlo’s retail empire embarks on a digital revolution [Nikkei]
  • Farfetch Black & White partners with Certona to offer personalised e-commerce to luxury brands [The Industry]
  • Shopify’s e-commerce empire is growing in Amazon’s shadow [Bloomberg]
  • Voice search, 3D modelling and chatbots named as 2017’s most significant e-commerce trends [The Drum]

TECHNOLOGY
  • 11 tech leaders share the real truth about artificial intelligence (and what really matters) [Forbes]
  • How Bitcoin is making waves in the luxury market [CNN]
  • How blockchain could boost the fashion industry [BoF]
  • Walmart and Google partner to challenge Amazon’s Alexa [Retail Dive]
  • Google and Vogue are bringing voice-activated content from the magazine to home devices [AdWeek]
  • Latest Magic Leap patent shows off prototype AR glasses design [Techcrunch]
  • ‘Self-driving’ lorries to be tested on UK roads [BBC]

PRODUCT
  • Everlane’s quest to make the world’s most sustainable denim [Fast Company]
  • The zipper: the innovation that changed fashion forever [Bloomberg]
  • A new high-tech fabric could mean the end of bulky layers in the winter [Quartz]
  • Watch how Vans can now put any custom design on your shoes in under 15 minutes [Fast Company]
  • How RFID tags became trendy [Engadget]
  • Leather grown using biotechnology is about to hit the catwalk [The Economist]
  • These brands are teaming up on smart hang tags [Apparel Mag]
Categories
digital snippets e-commerce Editor's pick product social media technology

Digital snippets: Mid-tier blogger power, the robotics opportunity, Alibaba’s anti-counterfeiting feud

midtierbloggers

After a week refreshing the mind and the soul at Futuro in Ibiza (an awe-inspiring experience), we’re back with a round-up of everything you might have missed in fashion and technology news (and beyond) over the past fortnight or so. Read on for highlights from mid-tier bloggers and robots to Alibaba, Victoria’s Secret, Levi’s, WeChat and more…


  • The power of the mid-tier blogger [Racked]

  • How robots can help fashion companies drive business efficiencies [BoF]

  • Inside Alibaba’s anti-counterfeiting feud [Associated Press]

  • Why Victoria’s Secret won’t be mailing out any more catalogues [AdWeek]

  • Aerie refused to Photoshop its ads for two years and sales spiked [Mashable]

  • Project Jacquard: Google and Levi’s launch the first ‘smart’ jean jacket for urban cyclists [Forbes]

  • Fashion shake-ups go beyond designers to the C-suite [NY Times]

  • Fashion industry faces disruption from outside — and from within [FT]

  • Why lux brands love Line [Glossy]

  • With 92% of luxury brands on WeChat, here’s how they can step up their game [Jing Daily]

  • How four creative directors are using Snapchat [Glossy]

  • How Instagram’s new feed will impact brands and influencers [BoF]

  • With subscription beauty boxes, rules of e-commerce don’t apply [WSJ]

  • Why buy buttons on Pinterest and Instagram haven’t taken off for retailers [Digiday]

  • Brands want to predict your behaviour by mining your face from YouTube videos [Motherboard]

  • Chatbots won’t solve everything [BoF]

  • For the first time, Google is bringing retail ads to image search [AdWeek]

  • Shoptalk: Pondering the store’s future in an age of web buying [Associated Press]

  • Keep calm and keep shopping – how elections impact retail sales [The Conversation]

  • Why dynamic pricing just doesn’t work for fashion retailers [LinkedIn]

  • I tested Rent The Runway’s new Unlimited service. My satisfaction was… limited [Pando]

  • What does ‘innovation’ in retail look like? 8 leaders weigh in [Retail Dive]

  • Online retailers should care more about the post-purchase experience [HBR]

  • Does Kendall and Kylie’s game actually sell clothes? [Racked]

  • EasyJet’s new smart shoes guide travellers as they wander through new cities [JWT Intelligence]

  • MIT researchers create 3D-printed fur, opening up “a new design space” [Dezeen]