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business data e-commerce product Retail social media sustainability technology

2019 highlights: The year in innovation news

2019 was a big year for innovation and the Current Daily has been tracking it all throughout – from the rise of 5G-enabled experiences to the continued push towards a circular economy. 

Here, we highlight some of the most interesting stories from the year, outlining why they are an important indication of where the industry is moving in 2020 and beyond.

5G will drive 100m people to shop in AR

Augmented reality took center stage this year as its user-friendly features meant a growing number of brands – and social media platforms like Instagram – started adopting it as a core engagement strategy.

In April, a Gartner report highlighted that 100 million people will shop in AR once high-speed 5G mobile services roll out more extensively. This means the experience is going to be more seamless than ever, giving it better real-time rendering, shorter download times and reduced latency. Retailers seem to be on board, as 46% of them plan to deploy either AR or VR. Check out our piece exploring what other benefits 5G will bring retail.

Fashion brands have only met 21% of their circularity targets for 2020

If there’s one thing to be sure, there’s no escaping the growing momentum around shifting to more sustainable practices as an industry. But is there really progress being made? In July, the Global Fashion Agenda (GFA) launched its second yearly assessment of fashion brands and retailers to find that only reached 45 (21%) of the 213 targets the industry has set for 2020 will be met. 

This means the 90 signatories of the GFA’s 2020 Circular Fashion System Commitment, which includes fashion companies like adidas, PVH Group and Inditex, will have to hurry if they want to achieve more in the next year. We talked a lot about the need for action in this space when a further collaborative group was announced: the G7 Fashion Pact. If you ask us, it’s time to say enough to the pledges, rather give us some tangible outputs.

H&M to trial clothing rental for the first time

Talking of sustainability, one are where we have seen a lot of action and experimentation this year is in new business models. Rental is making serious strides at all ends of the market, but perhaps most interestingly within fast fashion just recently as the H&M Group announced it will trial clothing rental at one of its H&M Stockholm stores. Members of its customer loyalty program can now rent selected party dresses and skirts from its 2012-2019 Conscious Exclusive collections.

Recently, its brand COS also launched a pilot where it is renting out clothes through Chinese subscription rental platform YCloset, which customers can access through a monthly flat rate. We also published a deep-dive into the different opportunities we see for the industry in rental, here.

Allbirds CEO calls out Amazon product copying

In November, Allbirds’ co-founder and CEO, Joey Zwilinger, wrote an open letter to Amazon’s Jeff Bezos after discovering the e-commerce platform was producing its own wool sneakers similar to the brand’s most popular style.

Instead of going the usual lawsuit route, the founder took this as an opportunity to highlight his brand’s sustainability mission. In the letter, Zwilinger highlights that Allbirds’ sustainable philosophy is open source, and it has thus far helped over 100 brands who were interested in implementing its renewable materials into their products, suggesting Amazon might like to do the same. It was a bold move but one that sparked a conversation around the role of collaboration once more, and its critical place in true innovation.

Gen Z loves TikTok. Can fashion brands learn to love it too?

Gen Z quickly adopted Chinese social media platform TikTok as their app du jour this year for its bite-sized video content. Currently, 66% of the platform’s 500 million global users are under 30, according to data analytics firm, Business of Apps.

Brands have started to follow suit, tapping the app to drive engagement and ultimately sales. Content varies from crowdsourced, as in a recent Burberry campaign that saw users challenged to create the brand’s logo with their fingers, through to more refined, such as in a snippet of an interview with singer Shawn Mendes for Calvin Klein. We explored various other brands setting TikTok precedent, here.

Lush abandons social media

While TikTok has been taking off, elsewhere social media is slowing for some. Vegan cosmetics brand, Lush, for instance decided to shut down all of its activity in the UK as it became “tired of fighting with algorithms” or paying to appear on news feeds. Instead, it suggested a hashtag where fans would still be able to speak to the brand.

Lush’s bold move speaks to fight playing out for anything still resembling organic reach. As consumers become jaded over being ‘sold to’, brands are having to find novel ways to reach them, beyond the influencer route. One other area we’re tracking here is those owning their own conversation channels, as with both Glossier and H&M of late.

Coty acquires majority stake in Kylie Jenner’s beauty business

2019 was the year of major acquisitions in both beauty and fashion. While LVMH recently announced it was snapping up Tiffany & Co for $16bn, other names included Farfetch buying New Guards Group, which operates streetwear favorite Off White for $675m; Shiseido acquiring cult skincare brand Drunk Elephant for $845m; and more recently, Coty acquiring a majority stake in Kylie Jenner’s beauty business, Kylie Cosmetics, for $600m. 

The latter served as particular confirmation of how brands build and grow in this day and age. Jenner, who was 18 when she started a single ‘lip kit’ line, used Instagram to form a direct conversation with her audience. In 2019, this seems like an obvious strategy, but the reality star’s foresight to do so in 2015 has undoubtedly been her recipe for success.

How luxury fashion learned to love the blockchain

Amid growing concerns over the proliferation of counterfeit goods, luxury brands also began to embrace blockchain as an important authentication tool this year. 

Earlier this year, we heard about how LVMH launched its own platform, Aura, which is currently being piloted with some of the brands in its portfolio and will further expand in the future. Kering and Richemont meanwhile are said to be exploring this too, while De Beers is using it to trace its diamonds. Once matured, the technology will undoubtedly make its way into the hands of the consumer, who will be able to better understand where their possessions are coming from. We also tracked some of the other innovations in the transparency space; an area that continues to heat up.

Automation in retail: an executive overview for getting ready

Automation was another big tech focus this year, particularly for its potential impact on retail, from supply chain management to last mile delivery. This shift is putting pressure on retailers to rethink their operating models, distribution centres and headquarters, with McKinsey warning that brands that fail to implement it into their strategy risk falling behind. 

Automation is something we’ve long been talking about for the sake of efficiency, but there also comes a significant ethics conversation to be had here, which the industry is exploring. We agree, now is the time.

What Fortnite could mean for fashion

The global gaming market is expected to reach $180bn by 2021, and fashion brands are realizing the valuable potential in this. Free-to-play video game Fortnite has grown into a multi-million dollar business by selling clothing to image-conscious gamers, for instance. This monetization of player aesthetics, more commonly known as ‘skins’, has opened the door for retailers to cash in on the virtual world. 

Going forward, we expect more brands to invest in digital garments or utilize gaming to drive product discovery. We accordingly explored how gamification is being used in the shopping journey by brands like Kenzo and Nike to both increase engagement and build brand loyalty.

How are you thinking about innovation? 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 e-commerce Retail sustainability technology

From holograms to responsible packaging: 10 must-read retail innovation lists

This year has seen continued breakthroughs in retail innovation, with brands exploring new ways to interact with consumers, whether that’s through the physical store, virtual spaces, or new touchpoints like vending machines. 

2019 has also been an impressive year for sustainable innovations, with everything from creative store design and technological transparency, to responsible packaging solutions and the rise of rentals.

Here, we reflect on 10 of our must-read retail innovation articles from the year.

8 brands deploying vending machines as smart retail solutions
Mulberry x Current Global Vending Machine

Artificial intelligence, social media buzz and customer acquisition tools are just a few of the strategies behind vending machines being used as a key part of today’s retail experience. In this story we explore how the technology has been applied to brands including Mulberry and Adidas.

4 technologies aiding in-store navigation
Gatwick’s in-app navigation

Big box retailers including Walmart’s Sam’s Club, Home Depot, Lowe’s and Target are using a variety of interesting wayfinding technologies to improve customer navigation inside the physical store. This piece dives into the role of innovation for more efficient customer journeys.

5 brands pushing conversions through virtual storefronts
Lego’s AR-activated experience

Brands including Macy’s and Lego are using virtual experiences in physical locations to provide shoppers with the benefit of an interactive in-person experience without needing to carry inventory. Here, we look at how these “invisible” or augmented reality storefronts are driving sales, collecting data and boosting branding efforts.

7 ways fashion brands are harnessing hologram technology
Alexander McQueen’s hologram show

The fashion industry has been experimenting with holograms for some time, using them as both elaborate marketing techniques, as well as more immersive in-store opportunities aiming to drive brand engagement. In this piece, we take a look back at some of the best use cases from the likes of Alexander McQueen and Ralph Lauren.

9 brands pushing sustainable store design
Ganni’s sustainably designed store

With sustainability an increasing priority on the agenda for fashion and retail businesses around the globe today, attention is also turning to their brick-and-mortar stores – how they’re resourced, designed and constructed. Here we explore how the likes of Stella McCartney through to Ikea are approaching it.

4 innovative retail fulfilment methods to know
Ford’s delivery robot

With the on-demand economy continuing to fuel consumer desire for instant gratification, innovation in delivery continues to rise, from crowdsourcing to the latest in robotics. Explore how tech solutions are shaping efficiency in the last mile, here.

7 brands regaining consumer trust through transparency
‘I made you clothes’ campaign

Enabling transparency is a key focus for fashion businesses today, but with rising concerns of greenwashing – from misleading PR-led campaigns to the increase of fake news – consumer trust is at an all-time low. As a result, brands are having to work harder than ever to prove their authenticity in the matter.

5 brands using gamification to drive shopping
Nike’s React Land game

Brands and retailers are jumping on the growth of the gaming market and increasingly using ‘play’ mechanics as a way to encourage shopping. Here we dive into why gamification is estimated to be a $40bn market by 2024 and explore those making the most of it already.

4 effective ways brands are tapping into the rental market
Ba&sh’s NY store

The rental market boom is sending a clear signal to brands struggling to survive in the current retail climate: it is time to adapt to changing purchase behaviors, or risk losing market share. In this piece we look at the varying benefits of stepping into this space, from sustainability to data capturing.

8 brands turning to responsible packaging solutions
Toad&Co partnered with LimeLoop

The rapid rise of the e-commerce era has seen an equally colossal increase in plastic packaging used by brands around the world, something those at the forefront of sustainability are now looking to change. Check out some of the best alternatives introduced by the likes of PVH to MatchesFashion.com.

How are you thinking about innovation? 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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data Editor's pick mobile Retail technology

5 ways 5G will impact retail

Last month, mobile phone network Three ‘switched on’ its 5G service in London through an immersive experience with fashion designer Henry Holland.   

The “Living Room of the Future” initiative saw visitors able to try on mixed reality headsets from Magic Leap, to enter into a world consisting of everything from a mindfulness moment, to a gaming experience and the delivery of (virtual) House of Holland shoes by drone to your door. 

5G is expected to ramp up in 2020 on a global level. Further cities in Switzerland, Spain, Germany and Italy have already begun adopting it. Meanwhile, in the US, although four cities have turned on the signal, the technology is tied up in a trade war, since China’s Huawei is the dominant 5G supplier. Regardless, the latest Ericsson Mobility Report predicts there will be more than 10 million 5G subscriptions globally by the end of this year, and that 5G population coverage is forecast to reach 45% by 2024.

In it simplest sense, 5G is just a faster version of 4G – about 20x the speed in fact. That coupled with almost no latency, means the new networks will nearly eliminate lag time. This is big news for mobile of course – opening up paths to purchase in even the busiest of crowds for everyday shoppers. 

But its existence will also help power other tech advances, from machine learning to digital realities. Add in features like low energy consumption and higher reliability, and it brings an opportunity for the retail industry to enhance the consumer experience in the physical store with a number of seamless real-time functionalities, leading to increased engagement and conversions. 

As a result, now is the ideal time for retailers to start planning how their stores and interfaces will look when 5G becomes widely available. Here are 5 ways we see it having an impact… 

Connected Spaces

Connectivity in our physical stores, means devices that can constantly exchange data with each other – also known as those under the header of the Internet of Things (IoT). To do so, they need a fast, reliable network that doesn’t require too much power. 5G networks will achieve a 90% reduction in power consumption, guaranteeing up to 10 years of battery life for low power IoT devices. This means, for example, that more retailers will have access to smart shelves like the ones Amazon implemented in its Amazon Go stores. This technology uses dozens of sensors to provide real-time inventory visibility and update pricing according to demand. 

Key tech we’re tracking: dynamic pricing, automated checkouts, connected fitting rooms, automatic replenishment

Amazon Go Store
Immersive Experiences

Augmented and virtual realities use a lot of processing power and cellular data. With the increased capacity of 5G networks, retailers will be able to create richer, more detailed experiences when integrating their physical and digital worlds. This will make technologies that we’re already experimenting with, and seeing consumer adoption of, only more of a possibility. The result will mean shoppers are able to immediately check product materials or ingredients through the use of smart glasses or their smartphones, for instance. Those same apps will also guide customers to the products they want by projecting directions into their field of view in real-time as they navigate the store space.

Key tech we’re tracking: immersive interfaces, gamification, wayfinding

Puma’s new flagship store with gamification
Higher Efficiencies

Artificial intelligence will also thrive on IoT devices via 5G. That’s not to say the AI algorithms themselves will change, but that the higher network will enable more accurate real-time data to flow, ultimately facilitating smarter systems. In retail, for instance, managers will be able to delegate more operational and inventory decisions to automation. This means greater efficiencies as well as accuracies on things like forecasting inventory quantities so as to optimize stock levels, leaving sales associates to spend more time on customer care. Having stock in the right place at the right time will also decrease the risk of losing customers to competitors, as product availability will be more accurate. 

Key tech we’re tracking: retail analytics, inventory visibility, demand forecasting, endless aisle  

Walmart’s endless aisle
Personalization

With lower latency, retailers will also be able to respond to purchasing patterns and behaviors with immersive, tailored content in real-time. Implementing 5G in-store will allow for greater interactions and data collections between sales associates and customers. Real time data could be tracked to create personalized adverts or offers based on the preferences of individual customers, helping to increase the incentive to buy. 

Key tech we’re tracking: marketing automation, personalized promotions, AI recommendations, product search tools, clienteling

Nike’s Melrose store
Fulfilment

The implementation of 5G will also revolutionize logistics by improving  efficiency in fulfilment tasks and increasing the speed of transportation. Greater connectivity and improved reliability will help communications between brands, couriers and consumers. The full capacity of 5G will eventually also enable the roll out of automation in transport and warehouses, thanks to improved processing of the vast amounts of data required in real-time. 

Key tech we’re tracking: smart warehousing, robotics, automated vehicles

Lowebot assisting a consumer

Additional reporting by Larissa Gomes.

How are you thinking about retail innovation? 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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e-commerce Editor's pick mobile Retail technology

6 loyalty activations driving customer engagement

Today’s consumers are increasingly spoilt by choice, meaning brands  have to work harder than ever to earn any level of loyalty. That hasn’t stopped many from trying however. 

In today’s retail climate, personalization is king, with customers seeking brands that tailor their products and services to their behaviors. When done correctly,  loyalty programs not only respond to that need, but can generate over 20% of a company’s profits, according to McKinsey

Retailers across the board – from larger names like Target and Nordstrom to standalone brands like Nike – are revamping their traditional spend-and-reward offerings to add layers of digital that respond to the modern consumer.

From tapping into an engaged community and encouraging gamified behavior, to pushing personalized spending in-store, here we highlight some of the most innovative loyalty approaches:

FOSTERING COMMUNITY

Victoria's Secret PINK NATION
Victoria’s Secret PINK NATION

One of the cornerstones of the Victoria’s Secret’s PINK brand, is its college ambassador program, which recruits university students across the country representatives. The role is not too dissimilar from a social media influencer, with responsibilities including promoting the brand on social, offering followers advice and organizing campus events and get-togethers. Ambassadors dedicate up to 10-hours a week to their roles for free, and see this as an opportunity to build a personal brand with PINK’s support.

The brand’s loyalty program, PINK NATION, has also received an upgrade and launched its very first app, aiming to emulate a girl’s club. This includes exclusive member perks as well as a dedicated Campus tab where customers can chat with ambassadors. Ultimately, the brand wants to scale to include more college-life related content.

Flipkart-owned fashion retailer Myntra also took a similar crowdsourced approach to loyalty when it launched the Shopping Groups feature in 2017, in the run-up to its  End Of Reason Sale (otherwise known as EORS). Shoppers could team up with their friends and families on the platform to shopping groups, where all purchases were tallied together to unlock further special discounts for the whole group. 

The retailer reported almost 100,000 shopping groups being formed during the sale as a result, contributing to around 18% of sales.

INCENTIVIZING ACTION

Nike Plus
Nike Plus

Starbucks boasts one of the most successful retail apps to date with 23.5m active users. In order to encourage loyalty and get more customers to join its booming loyalty program that sits alongside (15m users), it launched a gamification experience called the Summer Game Boardwalk this year. 

Anyone could play the virtual board game, which prompted users to tap a spinner and advance steps in order to tally points, similar to a game of Monopoly. At the end, loyalty members received points towards their accounts, while general app users were prompted to join the program in order to receive the same.

Meanwhile this year NikePlus added a number of interactive experiences for its members, extending the remit of physical activity into wider lifestyles. Nike collaborated with three key partners to do so – Apple Music, mindfulness app Headspace, and gym booking app ClassPass, to encourage consumers to be active in order to receive more rewards. For example, if the user completed and logged a workout within the app, it would unlock free Apple Music playlists.

With this program, the sportswear brand is hoping to triple its 100m user membership number.

DRIVING IN-STORE ENGAGEMENT 

Inside the Philosophy skincare Manhattan store
Inside the Philosophy skincare Manhattan store

According to research company Bond, 95% of loyalty members want to engage with brands via new technologies. In-store, deploying digital tools is an opportunity for brands to engage and acquire new loyal customers at the point of sale, when demand is at its highest.

At Coty-owned make up brand Philosophy’s flagship in Manhattan, loyal customers are recognized and rewarded via facial recognition. Upon entering the store, customers are asked to take a selfie with their own phones and send it to a designated phone number. Registered customers can then be recognized on screens, which offers them special discounts. Over time, customers are pushed more tailored notifications and one-to-one consultants based on previous behavior.

Also in New York, is Nordstrom’s new menswear store, which is offering a higher level of service for its newly revamped Nordy Club loyalty program members. Customers shopping online can receive items to then try-on at that specific location. When physically approaching the store, customers receive an app notification giving them precise information on the location of their reserved item.

How are you thinking about innovation? We’re all about helping you build innovative integrations and experiences. TheCurrent is a consultancy transforming how fashion, beauty and consumer retail brands intersect with technology, powered by a network of top startups. Get in touch to learn more.

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Campaigns Editor's pick

Nike encourages Mexican women to exercise with digital competition

Nike Mexico “Juntas Imparables”

Nike Women in Mexico is encouraging women to exercise more with a group competition that sees combined exercise minutes tallied for the chance of winning a final prize.

In order to join the competition, titled “Juntas Imparables” (Unstoppable Together), women must register their teams of four on a dedicated website, and from there continue to log their minutes of exercise through the Nike Training Club or Nike Running Club apps. The group that collectively tallies the most exercise minutes within a six week period (September 10 – October 19) will win a year’s worth of Nike sponsorship.

Nike is further supporting the participating teams by creating WhatsApp group chats where they will be connected to a Nike representative who will coach them throughout the competition. Groups are also able to monitor their progress and position in the ranking by visiting the Nike Imparables site, which features a leaderboard.

To promote the initiative, Nike has released a TV spot that sees top female Mexican athletes, such as football player Nayeli Rangel and boxer Mariana Juárez, sprinting through the streets of Mexico City while being faced with challenges such as men wolf-whistling, traffic and construction sites.

The campaign features a charitable aspect too – Nike has vouched that for every minute of exercise registered, it will fund another minute of play or exercise in collaboration with the NEMI foundation next year. This is part of the sportswear brand’s Hecho para Jugar (Made to Play) program, which was created to help Mexican children live happier and healthier lives.

Are you thinking innovatively enough? We’re all about finding you the perfect partners to do so. TheCurrent is a consultancy transforming how fashion, beauty and consumer retail brands intersect with technology. We deliver innovative integrations and experiences, powered by a network of top technologies and startups. Get in touch to learn more.

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Editor's pick product technology

Tommy Hilfiger launches smart clothing that rewards users per wear

Tommy Jeans Xplore

Tommy Hilfiger has launched Tommy Jeans Xplore, a line of smart chip-enabled clothing that rewards consumers for each wear. In doing so, it is gamifying an experience for its brand fans and ambassadors with immediate rewards, which include discounts and exclusive experiences.

Items in the collection each have an embedded bluetooth low-energy smart tag provided by Israel-based Awear Solutions, which connects the physical product to a dedicated Tommy Jeans Xplore app. Once activated, the app acts as a direct line of communication to the consumer and based on a points system, allows the user to receive rewards and experiences in real time, based on garment wear.

“We’ve always been at the forefront of digital innovation, using technology to deliver what our customers are looking for – unique experiences and instant gratification,” said designer Tommy Hilfiger to WWD. “Tommy Jeans Xplore is the next evolution of our vision, reaching consumers where they are and inviting them to be a part of the brand experience.”

Rewards include concert tickets through a partnership with Live Nation and exclusive access to the brand and its events, such as visits to the Tommy Archives and invites to its runway shows. Users can also redeem product discounts or convert their earned points into monetary donations to charities.

Tommy Jeans Xplore

The line, which is currently available only in the US, consists of 23 items of clothing across women’s, men’s and unisex designs. This includes hoodies, t-shirts and accessories such as a crossbody bag and a backpack.

Tommy Hilfiger has made strides in establishing itself as an industry innovator investigating how to personalize engagement with its young, digitally-savvy audience across the board. Last year’s launch of a shoppable image recognition app during its LA runway show demonstrated the brand’s commitment to inserting digital moments at every consumer touchpoint.

Engaging with consumers through technology, among other innovations, was the main topic of discussion by Tommy Hilfiger and chief brand officer Avery Baker at this year’s British Fashion Council fashion forum, curated and produced by TheCurrent. Stay tuned for an upcoming TheCurrent Innovators podcast episode with Baker, which will be recorded live in New York City in August.

Tommy Jeans Xplore
Tommy Jeans Xplore

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Editor's pick mobile social media

Under Armour launches trivia-style live game for Stephen Curry superfans

Under Armour - Steph IQ
Under Armour – Steph IQ

Under Armour is jumping in on the popularity of mobile trivia games with Steph IQ, a new gaming app centred around UA ambassador and basketball player Stephen Curry.

To tie in with the fact Curry’s team, the Golden State Warriors, play against the New Orleans Pelicans today (May 3), Under Armour will be challenging Curry fans with an elimination style game to test their knowledge on the Bay Area and Curry’s career achievements.

“Steph IQ is one of the first ever mobile games triggered by an athlete’s live performance that marries the physical and digital experience of watching a sporting event,” says Jim Mollica, Under Armour’s head of global consumer engagement and digital marketing. “We’re using technology and trends in consumer behavior to elevate the dual screen viewing habits and the way fans tune in and engage with Curry’s performance.”

The gaming experience, which was developed with digital agency Red Interactive, and is reminiscent of those created by HQ Trivia, will be available whenever Curry scores his first three-pointer during any game of the NBA playoffs this season.

Steph IQ will notify the user of a new game within three minutes of the player making his first 3-pointer, which will then present users with eight different multiple choice questions, giving them 10 seconds to answer each. Questions are meant to get harder as the game progresses, challenging users to test not only their Curry knowledge, but NBA history.

In another similarity to HQ Trivia, the game will feature a host, which to further engage with their desired 13-to-18 year old audience is influencer Bdot. Winners who have answered all questions correctly will be entered into a sweepstakes for the chance of winning prizes such as the latest colorways for the Under Armour Curry 5 sneakers, as well as $10,000 in UA store credit and playoff tickets.

The app will be available until June 30 and the number of trivia games will depend on how many games the Warriors play in the playoffs. To promote the launch, Under Armour is tapping into Curry’s social channels as well as through NBA, the Warriors and its retail partner Foot Locker.

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Retail Uncategorized

Are China’s Retail Pop-ups a Bubble That’s Ready to Burst?

Coco Game Center by Chanel
Coco Game Center by Chanel

With racing games and a claw machine, it looks more like an arcade than a boutique. But the Coco Game Center housed in trendy Shanghai mall K11 from April 14 to 23 is actually a pop-up shop created by French luxury house Chanel. The racing game, for instance, has a double C logo steering wheel, and the prizes captured by the claw machine are Chanel cosmetics samples.

Chanel’s first game-themed pop-up took place in Tokyo in March this year, and excitement about it spilled over to Chinese fans on social media. When Chanel announced it was bringing the pop-up to China, reservations were booked out a week before it arrived.

The concept of pop-up stores was popularized by Japanese fashion label Comme des Garçons. Its founder, Rei Kawakubo, opened the label’s first pop-up store in Berlin in 2004. Since then, the fashion label has been making its mark around the world through pop-up stores.

The compound annual growth rate of pop-up retailing has been over 100 percent since 2015. By 2020, over 3,000 pop-up stores will have launched in China.

Coco Game Center by Chanel / Source: timegonemay/instagram
Coco Game Center by Chanel / Source: timegonemay/instagram

Beyond Traditional Retail

Pop-up stores’ spike in popularity can be attributed in part to the shifting tides of real estate. Traditional retail space is becoming more and more expensive but can feel outdated, making pop-up stores a more exciting alternative.

They allow luxury brands to unleash their creativity, building a branded world that consumers can fully inhabit. Impressive details stimulate fans to record their experiences and post them on social media. Done well, pop-up stores provide authentic social media exposure that money can’t buy.

Last year, Chanel launched its Chanel Café, inviting fans to taste branded dessert and coffee after first trying out some of their products. Around the same time, YSL invited fans to a yacht party, providing them with free makeovers. At both events, brands offered exclusive products for consumers to purchase.

Combining exclusive products and limited durations, pop-up stores are a textbook example of hunger marketing, which is particularly effective in China. Queues often generate excitement, rather than a sense of inconvenience.

Digital Pop-ups Are Now a Thing

Pop-ups are no longer limited to brands entering shopping malls. E-commerce sites are also hosting pop-ups both online and offline.

Luxury E-commerce platform Secoo opened a pop-up store with lingerie brand La Perla last year in Beijing’s popular Sanlitun shopping district. Similarly, MyMM, a content-driven e-commerce platform,  launched a ‘Trend hunter’ themed pop-up store in Shanghai, allowing visitors to touch the merchandise listed on the site. MyMM said the pop-up store benefits lesser-known brands on the platform, giving them a chance to test consumer response before investing in a physical store.

“About one and a half years ago, more and more e-commerce sites started to think about opening an offline pop-up shop. It has reached a near-explosive state this year,” Vincent Tan, the founder of a pop-up agency POPEX told Chinese media Netease Tech.

He argued that it’s become harder for e-commerce platforms to acquire new users online, and shopping malls have been struggling to attract foot traffic. Pop-ups are seen as a solution to both problems, leading online and offline retailers to increasingly working together.

Another recent development is e-commerce sites hosting virtual pop-ups on their platforms. Luxury brands concerned about cheapening their brand by selling online can experiment with e-commerce platforms by first trying a limited collaboration. On April 10 this year, for instance, luxury watchmaker Audemars Piguet announced its first online pop-up boutique in partnership with JD.com, which marks the 143-year-old Swiss manufacturer’s first foray into e-commerce. That gives them the opportunity to evaluate sales performance and consumer feedback before committing to a deeper, more ongoing relationship.

What’s the Future of Pop-ups?

While pop-up shops can be a useful testing ground for some brands, for others they may already be too cost-prohibitive.

Pop-up stores are meant to make young consumers excited, but as they become more commonplace, it’s getting harder to generate that engagement. Simultaneously, the cost of launching a successful pop-up has gone up as more PR and marketing staff are needed, and hiring a space is becoming more expensive.

For smaller brands, hosting a pop-up doesn’t necessarily help them survive and thrive. Guo Wanyi, a manager of a Chinese brand called Debrand said, “It’s not like a physical store where you can count on sales. Often times the purpose of opening a pop-up is not to generate sales, so you can’t necessarily get back the cost.”

For luxury brands, while pop-ups can help reach younger consumers, hosting too many can eat away at their uniqueness. Like online marketing, not ever retail pop-up retail store can go viral.

By Ruonan Zheng 

This article was originally published on Jing Daily, a content partner of TheCurrentDaily: Are China’s Retail Pop-ups a Bubble That’s Ready to Burst?

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Editor's pick mobile technology

Why it matters: Eminem enhances Coachella set with augmented reality

Eminem AR experience at Coachella
Eminem AR experience at Coachella

The new ‘Why it matters’ content series from TheCurrent Daily highlights cross-industry innovations and analyses why they are relevant to the fashion and retail space. 

Eminem may not be a name that first springs to mind when considering innovation, but during his headline slot at this year’s Coachella music festival, the rapper used augmented reality to enhance the live music experience.

Coachella goers could download the Eminem Augmented app and throughout the set see visuals surrounding the stage that will be present during Eminem’s upcoming US and European tours.

Footage of the show highlights just how powerful adding a digital layer to live experiences can be, and accordingly the potential this could present to fashion and retail brands.

Given the growth of e-commerce and the increasingly connected expectations of today’s younger consumer, it has become vital for brands to develop engagement strategies around enhancing the physical world with a digital layer – from the new role of a flagship store to creating consumer-friendly immersive experiences.

While we have seen the likes of Zara, Outdoor Voices and Gucci experiment with AR technology to trigger small experiences on mobile, Eminem’s larger than life feature shows an unforeseen layer of immersion suitable for a group setting.

Unlike virtual reality, which isolates the user to a new alternate reality, AR is by its very nature a more communal, sociable technology because of the way it layers on top of the existing world around you.

The music industry is frequently vocal against fans viewing gigs through their mobile phone screens, but in Eminem’s case comes a certain sense of not just accepting this as standard but innovating on it accordingly.

As the CEO of his record label, Def Jam’s Paul Rosenberg, said: “We figured, if the phones are going to be there and people are going to be putting them up in the air and looking at them anyway, why don’t we provide a way to maybe change the way they’re perceiving the show.”

The Coachella experience was time-stamped and geo-tagged to ensure that the visuals were exclusively available to attendees and could only be seen within a few hundred yards from the stage.

The app also provided access to some other exclusive AR content, including a humorous ‘Mom’s Spaghetti’ interface that used image recognition to identify the festival’s universal food containers and layered graphics over it.

According to Rich Lee, creative director of Drive Studios who developed the experience, the app is an initial step that could signify a new portal to connect with music fans.

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Hermès launches mobile game as part of year-long celebration of play

Hermès "H pitchhh" game
Hermès “H pitchhh” game

Hermès has launched “H-pitchhh”, a mobile gaming app inspired by its equestrian heritage, as part of its year-long celebration around the topic of ‘play’.

The app allows users to virtually toss a horseshoe, where points are scored based on how close they get it to the stake. The more points users earn, the more they unlock exclusive content such as virtual worlds inspired by Hermès illustrations, as well as different horseshoe pitching objects. Users can play alone or invite a friend to participate in the experience.

The brand, known for its whimsical content strategy, chose 2018 as the year of the “Let’s Play” theme. It has been anchoring its creative direction around a single theme per year since 1987, when Jean-Louis Dumas, former chairman and CEO, launched the “Year of the Fireworks” to celebrate the house’s 150th anniversary.

To further promote the creative direction, visitors to the ninth edition of the Saut Hermès, its showjumping competition in Paris in March, were invited to play with the app or engage on a real-life game of hopscotch.

During the same month, the label launched its store at The Dubai Mall with a pop-up fairground that included a hall of mirrors and a carousel.

Hermès Fantasy in Dubai
Hermès Fantasy in Dubai