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Retail automation: A balance of efficiency and ethics

I recently binge-watched a BBC drama called Years and Years. Featuring Emma Thompson as a controversial British prime minister, it’s a frighteningly realistic portrayal of what society might look like given a few more twists and turns from both our political leadership and the technology developments that surround us. 

If you haven’t seen it, I recommend it as one to hunker down to next time the weather turns poor wherever you are. The reason for referencing this, however, is that there’s one speech in the show that feels particularly poignant to retail today.  

“We blame these vast sweeping tides of history like they’re out of our control, like we’re so helpless and little and small, but it’s our fault,” the family’s matriarch explains. “You know why? Because of that £1 t-shirt. We can’t resist it, every single one of us – we see a t-shirt that costs £1 and we think that’s a bargain, I’ll have that… The shopkeeper gets 5p for that t-shirt, and some little peasant in a field gets paid 0.01p and we think that’s fine. We buy into that system for life. 

“I saw it all going wrong when it began in the supermarkets, when they replaced all the women on the tills with those automated checkouts… Now all those women are gone and we let it happen. And I think we do like them, those checkouts. We want them because it means we can stroll through, pick up our shopping and we don’t have to look that women in the eye, the woman who’s paid less than us. She’s gone, we got rid of her – sacked. Well done. So yes, it’s our fault. This is the world we built. Congratulations.”

Each of us is complicit in the future world we’re creating, she suggests. And in her view, one full of automation, frankly, is a negative. 

But it’s the detail that’s important here – it’s the fact we thought any level of this automation was right in the first place, even in the most basic sense, and we forgot about the human element of it all in the process. Which is why it stuck in my head, because it’s really so real. 

Automation is something we’ve been talking about for years for the sake of efficiency. In our company, we help integrate all sorts of solutions that facilitate it constantly. And we’ve seen the industry really expanding on this front both in stores and through warehousing for some time. 

UK food delivery service, Ocado, is a market leader for warehouse automation, for instance. Its state-of-the-art facility processes 3.5 million items or around 65,000 orders every week, thanks to a fleet of 1,100 robots. 

Meanwhile, Amazon Go, the unmanned grocery store in the US, is one of the best known customer-facing initiatives in this space. It makes use of a multitude of different technologies – from sensors to image recognition – to enable shoppers to simply walk out while payment is automatically taken without having to interact with any other human being at all.

The interesting thing here, is that for every part of this in action, there are a multitude of startups we work with that do this even better. This is nothing short of a burgeoning space

To that end, John Lewis in the UK also just announced it has partnered with various robotics companies to develop its own human-robot interactions. Its intention, it says, is to have autonomous technology to assist its workers. 

Doing so comes with a multitude of benefits of course – from increased convenience for shoppers when things are faster and easier, through to better service in the process from the sales associates who are on hand to help where it matters. That also means opportunities for upskilling of staff – giving them new and higher skills, leading ultimately to better paid positions. And there’s economic incentive too. According to PWC, AI, robotics and other forms of smart automation have the potential to contribute $15 trillion to global GDP by 2030. 

This is all incredibly relevant in the context of John Lewis – one of the most trusted brands on the UK high street. The idea it suggests is that it can turn its customer promise into improved service and commercial value via robotics. 

The question really though is should it? According to the World Economic Forum, nearly 50% of companies expect automation to lead to some reduction in their full-time workforce by 2022. Meanwhile, the British Retail Consortium estimates that 60% of retail jobs will be at risk due to automation over the next 20 years. 

There’s an argument that previous industrial revolutions have ultimately led to progress – unemployment in one generation opening up new opportunities in the next. But if you want to look really far out, the University of Oxford predicts there is a 50% chance machines will be capable of taking over all human jobs in 120 years. 

That’s a fairly cynical view, but either way there’s an important note about ethics here. The John Lewis announcement came with a note that said its intention is to create an environment of safe and ethical adoption of robots in the industry. Presumably that means one that benefits its workers and not just removes their jobs. 

This isn’t a new conversation in a wider sense. AI ethics and all it consists of has been a technology debate and concern for some time. But for me, this isn’t about worrying over some apocalyptic future where the robots ultimately have intelligence enough to take over from the human race at large. It’s about the right now – the next 10 years and shaping how we want this industry to continue to work. 

I am all for efficiencies – it’s one of the linchpins of what we offer as a company, but that has to come with balance. A report by the Harvard Business Review is interesting in this sense. It suggests that those companies who are using automation mainly to displace employees, should expect to see only short-term productivity gains, whereas those who adopt it alongside staff, will achieve the most significant performance improvements.

That’s the ideal – making it great for business and for the people involved. If automation can give us greater ability to do the things we love, to remove the mundane tasks and those not adding value, it makes sense. After all, why are we doing any of this otherwise if it’s not about benefiting humanity long term. 

But we need to take a stand on this now and decide what we want for our future. There’s a certain element of inevitability to it all, but the human factor should be part of every conversation happening in this space. Ultimately what it comes down to is not do we want this change to happen, but how? It’s our choice, meaning otherwise, as per Year and Years, it will be “our fault”.  

How are you thinking about innovative solutions? 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. Get in touch to learn more. 

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business digital snippets e-commerce film mobile social media Startups sustainability technology

What you missed: Mobile 2.0, Raf Simons for Calvin Klein, plastic bottle fashion

What you missed - mobile 2.0, Raf Simons for Calvin Klein
Raf Simons’ debut for Calvin Klein

An absolute must-read this week (away from fashion specifically but heavily based around tech and consumer behaviour and therefore highly relevant to anyone in this space), is this view on “mobile 2.0” from Benedict Evans of Andreessen Horowitz. If there are a billion people with high-end smartphones now, what assumptions can we leave behind in terms of what that means, and what does the future look like accordingly? With AR and machine learning, it’s a pretty fascinating one.

Elsewhere, the latest news is of course geared to New York Fashion Week, with everything from Raf Simons’ successful debut for Calvin Klein and ongoing analysis of what exactly a see-now, buy-now model looks for those partaking. There’s also an update on new features from Pinterest and a big push from Instagram for its Live tool during the shows.


TOP STORIES
  • Benedict Evas on the Mobile 2.0 era [Ben-Evans]
  • Fashion shows adopted a see-now, buy-now model. Has it worked? [NY Times]
  • Raf Simons’ Calvin Klein debut is a hit on social media [Glossy]
  • Lone bidder Boohoo snags bankrupt Nasty Gal for $20m [Retail Dive]
  • H&M’s new Conscious Exclusive Collection turns discarded plastic into evening gowns with Bionic Yarn [Vogue]
  • What see now-buy now means for the production side of fashion [Apparel]

BUSINESS
  • Gucci, Yves Saint Laurent shine for Kering [Reuters]
  • Prada revenue falls again as house attempts to revamp [The Fashion Law]
  • Ethics controversy grows over Trump-Nordstrom spat [WWD]
  • Yoox Net-a-Porter on the downswing, FarFetch on the up [LeanLuxe]
  • Tiffany CEO Cumenal exits following sales slump [Retail Dive]
  • Sophisticated shoplifting gangs are costing US retailers $30 billion a year [Quartz]

SOCIAL MEDIA
  • Instagram Live makes fashion week debut [WWD]
  • Pinterest bets visual search can drive shoppers from inspiration to purchase [Internet Retailer]

MARKETING
  • Fendi just launched a new digital platform targeting millennials [Fashionista]
  • These five fashionable brands have mastered content that sells [Fast Company]
  • Barneys takes powerful stance on female equality, empowerment [Luxury Daily]
  • Adidas’ latest Y-3 fashion film is inspired by a futuristic dystopia [LS:N Global]
  • See Nike’s stirring ‘equality’ ad from the Grammys [AdAge]

RETAIL & E-COMMERCE
  • Should Amazon challenge Hudson’s Bay for Macy’s? [BoF]
  • New Neiman Marcus in Fort Worth built with tech and convenience layered on top of art and fashion [Dallas News]
  • Nifty app links with New York Couture Fashion Week [WWD]
  • Mon Purse CEO Lana Hopkins: “We’re treating Bloomingdale’s, Selfridges as marketing and branding opportunities” [LeanLuxe]

TECHNOLOGY
  • Why fashion brands should think more like tech companies [Fast Company]
  • Magic Leap’s patented an augmented reality price-checker [The Verge]
  • New York designer Ab[Screenwear] combines fashion with light-responsive holographic panels and operable touchscreens [BrandChannel]

START-UPS
  • Techstars Q&A: How start-ups can accelerate retail innovation [Retail Dive]
  • Rêve en Vert to launch £300,000 crowdfunding campaign [The Industry]
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.