Macy’s is introducing a series of tech capabilities to its brick and mortar store before the end of the year, as the retailer continues to fight to win back space in the US retail race.
Speaking on the first day of retail conference Shoptalk in Las Vegas, CEO Jeff Gennette, introduced a new feature that allows customers to use the Macy’s app to scan an item to pay. To finish the purchase, customers will then merely need to head to a mobile checkout counter located near the exits, where a sales associate will remove any shopping tags and bag the merchandise.
Alongside more convenient click & collect capabilities, these features will be rolled out across every Macy’s location by the end of 2018, he explained.
“We think of the Macy’s app as a key we hand to our customers, a key that allows them to unlock an enhanced shopping experience – a world of possibilities. With this powerful tool in hand, we give them the opportunity to engage with us on their terms. And we keep adding exciting new features to it based on what they tell us,” said Gennette in a press release.
The retailer has also worked with Ohio-based virtual and augmented reality specialist Marxent, to use their 3D Cloud and VR solution to create a VR furniture shopping experience. During early tests, the concept “significantly increased” transaction size, Gennette said.
In the in-store experience, consumers can use tablets to virtually design their own room and place Macy’s furniture inside, which can then be watched in 3D via a VR headset. The feature will roll out at 60 Macy’s locations by the summer. It will also allow the retailer to introduce furniture in smaller retail storefronts as it won’t need to store its full line. In addition, an AR furniture shopping feature will be incorporated into the retailer’s app in April.
“Consumers today don’t just adopt technology, they absorb it at a tremendous pace, but they want it to be useful to their needs. Like a lot of brands, we’ve experimented with VR in a number of areas and we’re excited to have found a practical application that has proven to drive sales. In furniture, we are giving our customers a new tool that will allow them to virtually test out home furnishings, helping them make more informed decisions on these important purchases,” said Gennette.
At present, furniture retailers such as IKEA and Wayfair are deploying similar capabilities, while AR is also being heavily applied in the beauty industry, and dabbled with in fashion.
Retailers like Macy’s and Target were present at the Shoptalk conference to talk about how they are developing in-store technologies that will respond to consumer demand and help them stay head-above-water when going up against the elephant in the room: Amazon. It was no mere coincidence that on the same day, Gianna Puerini, VP of Amazon Go, and Dilip Kumar, VP of technology for Amazon Go and Amazon Books, also took to the stage, where they shared consumer insights on their store’s cashierless experience since launching in Seattle a little over a year ago.
There was a media frenzy when Amazon Go was announced in December 2016. A grocery store based initially in Seattle, it enables shoppers to literally just walk out with whatever items they choose thanks to sensors recording what they pick up and charging back to their Amazon Prime accounts. Facilitated by first swiping the Amazon app on your smartphone, it nods to the automated future of retail, but more than that the growing potential ahead for the phone to control the entire commerce experience.
A wake-up call to retail execs around the world, the question on many people’s lips is whether that concept is equally applicable to other verticals? From a value proposition, not to mention strategic business perspective, it’s something that makes a great deal of sense for grocery, where both the barrier to entry and level of associated risk, is low. But for the sake of this argument, can it work for fashion? Will we all soon be able to pick up new clothes in-store and just walk out too, or will we always expect to have a level of human interaction with such tactile purchases?
The fact is, we live in an evermore-demanding society. Consumers today expect instant access to everything – from cars to food – at the touch of a screen. Patience has gone down. Convenience is key. Even in fashion, new businesses keep popping up offering us clothes for rent, clothes through our mailboxes, clothes tailored to our exact needs.
For all of these retailers, it’s a race to the bottom (led by Amazon no less) to offer faster than ever fulfilment to meet our expectations. The same goes in the store space, where standing in line to pay for something is as far removed as can be from the ease of the on-demand mobile era we otherwise inhabit, even at a luxury level.
This was part of the premise behind the launch of New York designer Rebecca Minkoff’s self-checkout in her Soho store at the end of 2016 too. Partnering with QueueHop to provide the technology, the aim was to ease the shopping experience for the millennial consumer the brand is targeted at. Unlike Amazon Go, there is still a checkout to contend with, but one the shopper can do for herself.
“More and more we are seeing millennials want to be in complete control of any and all of their shopping, and that includes payment. Long gone are the days where you needed to depend fully on a sales assistant to request new sizes or to ring you up,” said Uri Minkoff, CEO at Rebecca Minkoff. Part of his point is that there’s an inherent burden that comes with shopping in stores when the line is long. “If we could shave off time, would that spur consumers to go into stores more? Could that spur a return to retail?” he asked.
The other piece for the Rebecca Minkoff team was about reducing the “social friction” of a luxury shopping experience, or as Minkoff referred to it, removing the “Pretty Woman moment”. This means enabling shoppers to no longer feel judged by staff for what they look like and instead being left to enjoy the experience. “If we use technology to take that [bias] out of the equation, then we become blind to what a person looks like, meaning ultimately we can create a better relationship between the store associate and consumer,” he explains.
Katie Baron, head of retail, innovation and insights at trends service Stylus, agrees: “I think there’s a need to look at the wider implications of automation beyond the desire only for speed and convenience – understanding the mileage these concepts also have because of the sense of control they present to the consumer, who doesn’t always want to be steered or cajoled into line or, particularly in the case of luxury brands, have to contend with a rather intimidating experience.”
The QueueHop system comes with an RFID tag that brings the item up for payment on an iPad and an anti-theft device that only unlocks after that exchange is made. That means there is literally no need to speak to or deal with a sales associate at all if so desired, much like the online shopping experience feels.
Central to all of this is the fact the technology is only today fit for purpose, Minkoff said, emphasizing that he’s been working on this concept for two years. With stores (and products) today now evermore connected, the possibilities for this ahead are, of course, only going to improve. Rebecca Minkoff also has a connected fitting room experience for instance, while others including Ralph Lauren and Nordstrom are also playing in the space. As highlighted in this 2017 tech trends for retail list, it’s about the Internet of Things having a useful consumer impact by enabling a more frictionless mode of shopping.
As Uwe Hennig, CEO of retail software vendor, Detego, which works with other retail brands to help connect their clothing and their physical spaces, says: “We’re already starting to see a change in the way stores are being designed, with conventional [checkouts] being replaced by mobile terminals. […] In the not too distant future, you can expect to see retailers putting self-checkout systems directly into the fitting room, in combination with smart fitting rooms. These will allow consumers to try on clothes, but also browse and choose other accessories, styles or sizes and request sales staff bring them directly to the fitting room, as well as checkout themselves.”
He sees getting point of sale (POS) queues under control as of particular benefit to fast fashion retailers, over luxury – a boon to high traffic sites and particularly time-starved shoppers. For the more premium store by comparison, there’s somewhat of a gap between the values of automation, and a remaining focus on personalized service and interaction with the customer.
As Ana Andjelic, SVP and global strategy director at Havas Lux Hub, notes: “Self-checkouts are firmly going to set apart the mass/fast fashion from the premium/luxury fashion. They make more sense for the former, where it’s all about speed and volume versus the latter, when it’s about the quality of experience, of service and feeling being taken care of.” Indeed you can imagine automated purchases in H&M more so than Louis Vuitton.
Minkoff admits the feedback he’s received from the industry has been mixed: “Some brands have said ‘that’s amazing and we love it’, and others say ‘we don’t think it’s right for us’, and that’s totally cool.”
Of course, there were many brands who also believed e-commerce wasn’t going to impact the industry at one stage of its development, yet it’s now expected to be worth €70 billion annually for luxury goods by 2025, according to McKinsey.
The answer at this point, therefore, is about balance. José Neves, founder and CEO of online marketplace Farfetch, which also owns London boutique Browns, recently told the Guardian: “I’m a believer in physical retail experiences; I always say ‘fashion isn’t downloadable’. You need the human element – a program or piece of technology won’t provide the full level of care, attention and assistance that a shop assistant or customer service team will give. This interaction and engagement is an essential component of providing a luxury experience. On the other hand, you can’t ignore technology. To succeed we need to strike a balance between the online and offline experience.”
To achieve this Sucharita Mulpuru, chief retail strategist at Shoptalk, recommends thinking about high touch and low touch interactions with consumers in different ways. “Paying for your transaction needn’t be high touch. Even high-end hotels let you check out on your own, so self-checkout in stores shouldn’t be a foreign concept. That said, luxury will still need people in stores to greet people, to share the stories of the brand and the products, to manage exceptions and problems with transactions, etc. but for straightforward transactions, there is no reason that self-checkout shouldn’t be an option.”
Part of the issue, is that what a self-checkout looks like itself isn’t overly luxurious. “The form factor and execution will be critical. It would be silly to have a kiosk that looks like something you’d find at an airport, but if customers can check out on their own phones (like the Apple Stores allow), that could be the right approach,” Mulpuru adds.
Amazon Go operates on the basis of turnstiles similar to those found in the subway, which permit entry into the space once your Amazon app has been swiped. Uri Minkoff doesn’t imagine this will translate overly well to a high-end fashion store, but he does see the idea of more seamless automated transactions enabled in other ways in the future, so customers can similarly just walk out. “We’re already working on a next iteration that would make it even more seamless than it already is,” he explains. “I still think when dealing with items that are hundreds or thousands of dollars, then there’s got to be a security element to it. In a grocery setting, where an item, is a dollar or two, it’s different, but maybe through technology like facial recognition we will get there.”
Indeed, there’s no reason down the line why a luxury retail experience shouldn’t also include automatically identifying consumers (through facial recognition, or their phones, on an opt-in basis) when they enter the store in order to tailor service personally to them.
Andjelic suggests a layer of artificial intelligence is what will then make all the difference for luxury retailers adopting some level of automation at the checkout stage. “There’s tons that AI can do for luxury fashion when it comes to luxury stores as POS, and is all going to revolve around low-value interactions (like filling out one’s billing address) being outsourced to AI and high-value interactions (like white-glove customer service) belonging to humans. High-end fashion stores would definitely want to make the checkout process as seamless, efficient and convenient as possible, and AI will have a big role in that but more on the back-end side… What can we outsource to technology that is going to help us to have a better one-on-one personal relationship with our customers?”
John Vary, head of innovation at UK department store John Lewis, similarly imagines a future where in fact what we have is automation alongside human interaction to maintain a sense of luxury as far as fashion is concerned. He believes the result will be an enhancement of the customer experience, thanks to technology.
“We are moving to ‘intelligence amplification’ through the creation of intelligent artificial systems resulting in humans having extended ability to provide better services and solutions for customers,” he explains. “The rapid evolution of technology, such as computer vision and machine learning is enabling retailers to curate end-to-end customer journeys built for convenience and connectivity. Having a hybrid model is essential, and the next natural step in the adoption and evolution of these behaviors and the successful convergence of digital and human centered experiences.”
As Minkoff concludes: “We’re in a period of radical change, and the old way over the last 100 years of going to market, being based on a busy street and having good product, no longer cuts it alone. Some brands are slow to adopt, for some [such new technology] just doesn’t work, but either way, change is inevitable and we prefer to be at front of the pack than the back.”
New York-based designer Rebecca Minkoff has launched a self-checkout option in her Soho store. Partnering with QueueHop to provide the technology, the aim is to ease the shopping experience for the millennial consumer the brand is targeted at.
“More and more we are seeing millennials want to be in complete control of any and all of their shopping, and that includes payment,” said Uri Minkoff, CEO at Rebecca Minkoff. “Long gone are the days where you needed to depend fully on a sales assistant to request new sizes or to ring you up. We needed to continue finding ways to make her feel like she can have multiple experiences.”
Part of that move is to protect a certain level of anonymity so highly regarded by supposed millennials, according to Minkoff. The QueueHop system comes with an RFID tag that brings the item up for payment on an iPad and an anti-theft device that only unlocks after that exchange is made. That means there is literally no need to speak to or deal with a sales associate at all if so desired, much like the online shopping experience feels.
As Minkoff told Fast Company: “When we were going through our initial technology layout, we took on the view that the millennial consumer either wanted to be treated like a celebrity—a VIP with full service—or anonymously. [We wondered] what if they could have the store to themselves after-hours? Or how could you approximate the online shopping experience that you’re checking out by yourself, and it’s very quiet?”
“Is this going to maximize our sales in a huge way? Probably not. Do we have a huge shrinkage [theft] problem? Probably not. But we think it’s important for us to let our customer know that we get her,” he added. He also referred to it as removing the “Pretty Woman moment” – enabling shoppers to no longer feel judged by staff for what they look like and instead enjoy the experience. It’s about letting technology police customers, rather than bias.
The Rebecca Minkoff Soho store also houses the brand’s connected fitting room experience, where users are able to reserve items, as well as change colours, sizing and more through the system, without having to hang their heads out and get a sales associate’s attention.