Retail deliveries made in self-driving cars got a step closer to reality at CES in Las Vegas this week.
Ford announced it has partnered with delivery service Postmates to begin a pilot program testing how its self-driving vehicles and on-demand delivery might work hand in hand.
The two will explore how self-driving technology could change the delivery experience for consumers, enable brick-and-mortar retailers to reach new customer bases, and transform the way commerce moves in the communities in which we operate. A big focus is on how to benefit small businesses.
“The way commerce is moving around in cities is dramatically changing, and emerging technology will undoubtedly have an impact on the future of on-demand delivery,” Sherif Marakby, Ford’s vice president of autonomous vehicles and electrification, said in a post on Medium. “With the knowledge we’ll gain from our partnership with Postmates, we anticipate we’ll be able to better deploy self-driving technology in a way that can help people get what they need faster, while also supporting local businesses that are a big part of communities around the world.”
The test will include a pilot in a city yet to be announced, where Ford will eventually launch a fleet of self-driving vehicles.
Underpinning the fashion and luxury industries right now is both a tough retail environment and a landscape of intensifying competition – from Amazon to the bevy of new direct to consumer players. While sales are steadily on the rise, with The McKinsey Global Fashion Index projecting global industry growth from 3.5 to 4.5% in 2018, there are still big challenges ahead.
As we’ve seen time and again, survival is no longer a guarantee merely based on heritage; innovation in an age of rapidly evolving consumer expectations is what will drive staying power.
However, while that word – “innovation” – means newness in a literal sense, when it comes to looking at trends for the year ahead, we are very much talking about evolution not revolution in terms of what matters for retail and fashion brands.
For 2018, then, the big areas of focus will continue to be around augmented reality, artificial intelligence, the voice interface, blockchain, the circular economy, new materials, customisation and fulfillment.
Those tech terms tie into some big overarching trends shaping the future of the industry too; namely the sense of an increasingly frictionless shopping experience, more personalised and relevant consumer interactions and the drive of a serious sustainable agenda.
Here are the things you need to be thinking about…
In 2017 we saw the launch of Apple’s ARkit and Google’s ARcore, making augmented reality development on the devices we all use everyday incredibly simple. This push into the mainstream has led to a forecast of 900 million AR-enabled smartphones by the end of 2018, according to consulting firm Digi-Capital. With that of course comes increased consumer expectation – research from Digital Bridge shows that 69% of shoppers now want retailers to launch AR apps within the next six months.
We’ve already seen the likes of Ikea, Anthropologie and Burberry doing so to both facilitate shopping and make for some fun experiential use cases. As Apple CEO Tim Cook told Vogue: “Over time, I think [these features] will be as key as having a website.” 2018 then is your year to tool up. What is your AR strategy going to be?
Big data strategy is more of a reality for retailers and brands than ever thanks to the role of machine learning within artificial intelligence. Now, decisions can be made based on detailed and real-time consumer insights. The largest benefit for businesses at this point lies in providing greater relevancy or personalisation to the consumer – from tailored recommendations to highly individualised messaging.
There will be an estimated 1.8 billion users of voice assistants – like Amazon’s Alexa and Apple’s Siri – by 2021, according to Tractia. That kind of progress is already well underway, hot on the heels of simple facts like Amazon’s Echo devices being the biggest sellers on its website this holiday season. Last year we saw retailers starting to figure out where their place was in this landscape – Walmart teamed up with Google Home; others like Perry Ellis launched a fun personal styling app through Alexa.
Based on the simple mantra of needing to be where your consumers are, it’s time for the rest of the industry to start exploring how they too can use voice. At some point we’re going to see such technology assistants as the gatekeepers to shoppers, turning traditionally targeting and messaging on its head.
Blockchain is another tech word that’s been bandied about nonstop of late, but the chips are starting to fall as to what this can really mean for the industry. While cryptocurrencies are having a real do or die moment, the more relevant applications of blockchain for fashion brands lie in authenticity and transparency. Authenticity is about anticounterfeiting above all else, while transparency sits alongside sustainability. Both are about validating supply chain data, with blockchain by its immutable nature supporting that very fact.
London designer Martine Jarlgaard recently led the charge in terms of transparency, turning to storytelling to showcase each step of her supply chain through blockchain company Provenance. Expect 2018 to see more of these types of initiatives on a marketing level, as well as a broader movement to start thinking from the ground up in terms of integrating such technology into the foundations of the organisation.
The circular economy
On the subject of sustainability, the drive for less waste, and the move towards a true circular economy is also gaining headway. In 2017 we saw H&M announce its goal to be fully circular by 2030 and to only use recycled or other sustainably sourced materials. No small task, but a bold statement highlighting the work that’s got to go in between now and then.
The key, according to Nielsen, is that 72% of millennials and 73% of Generation Z say they would pay more for brands with sustainable offerings, meaning doing good is also key to strong business today. It’s not possible to be in this industry without thinking about this side of things in some way or another as a result, making this year a critical time for all involved. Strategy around the three R’s: reduce, reuse and recycle, will be a big focus for 2018, from new innovations shaping the possibilities around recycling techniques themselves, to a continued focus on areas like the sharing economy and resale sites.
Other names like VitroLabs are also worth keeping an eye on, as well as those experimenting with different fibres produced from the byproduct of harvests including pineapples, mushrooms, oranges and grapes. If last year was about experimentation, 2018 gives us the opportunity to move towards application and real commercial viability.
If you pull together some of the above trends – personalisaton and sustainability fundamentally – there’s little escape from the idea of customisation as a penultimate thought for 2018. If you can make something tailored to the individual, waste is lower, usage lasts longer, conversions are higher… the list goes on.
This is not new – we’ve been monogramming for decades – but the continued roll out of flexible manufacturing options from start-ups like Unmade, or with Shima Seiki printers as the likes of Ministry of Supply have used, as well as large scale automated systems like the Speedfactory from Adidas, are making this both quicker and more possible at scale. If that wasn’t enough, beware the A word once more: Amazon recently won a patent for an on-demand manufacturing system for apparel. That could be a game changer.
In case Amazon hasn’t yet been mentioned enough above, one final point to note continues around just how to make your time from order to delivery faster than ever. With the e-commerce juggernaut setting the precedent amid a consumer landscape of instant gratification in the on-demand economy world, it’s become somewhat of a race to the bottom for fulfillment.
The fact is, if we’re offered 30-minute drone delivery down the line, or even more realistically the 90-minute arrivals of our Gucci wares from Farfetch, as we saw launch in 2017, we’re more than likely going to take it. The question of need no longer comes into it. This space is ripe with start-ups offering all manner of assistance – from types of delivery options to opportunities for simplified returns. So what are you doing to pick up the pace? Time is quite literally of the essence.
Those orders are fulfilled directly from Gucci stores in London, New York, Dubai, Los Angeles, Madrid, Miami, Milan, Paris, Sao Paulo and Tokyo. A launch video (as below) shows three women – in Tokyo, Milan and LA – having an urgent need to replace their Gucci wares after laundry shrinkage, coffee spills and theft.
Said José Neves, founder, co-chairman and CEO of Farfetch at an event launching the company’s Store of the Future concept yesterday: “Luxury takes time but it needs to take time the right way. If you’re in a Michelin-starred restaurant, you want it to be slow. What you don’t want to be is waiting for the table. So luxury takes time to produce and bring to market. But once it’s there then it’s all about fast delivery. And the reason for that is that time has become – or perhaps was always and now we’re more conscious of it – the ultimate luxury good.”
He referenced start-ups including Airbnb, Uber, Deliveroo and Spotify as providing us what we want, exactly when we want it, as well as research carried out by Bain & Company that shows the number one consumer criteria when buying luxury online, is timely delivery.
Farfetch operates a distributed model, meaning it has thousands of points worldwide it ships from – including brand stores, boutiques and warehouses. It does so to 190 countries, with 89% of its shipments heading overseas. It already offers click and collect in 24 markets and same day delivery in 12 cities.
This 90-minute launch with Gucci (also dubbed F90) is an exclusive one for six months before it will roll it out to other partners.
Gucci president and CEO Marco Bizzari said: “This service represents the type of new service level that the luxury fashion industry needs to embrace in order to meet the ever-increasing expectation among luxury customers today, for an outstanding level of service that is flexible and seamless across channels and geographical locations.”
A number of other fashion retailers have trialled such deliveries in the past, including the likes of Warehouse and Oasis in the UK. MatchesFashion.com recently launched 90-minute delivery in London also, while Net-a-Porter and Mr Porter are testing out a “You try, we wait” service.
Rebecca Minkoff kicked off the first of the LA fashion shows this season (Tommy Hilfiger, Tom Ford and Rachel Zoe to follow), with a shoppable collection as well as a series of connected handbags on offer. There was also entertainment galore, which gives Tommy something to try and outdo later this week.
Meanwhile, other news this week has focused heavily on the execs movements at various brands, including Stefan Larsson out as CEO at Ralph Lauren, Riccardo Tisci leaving Givenchy, rumoured headed to Versace, and Clare Waight Keller exiting Chloé. Also worth reading is detail on the John Lewis delivery trials straight to your car boot, insight on everything you need to know about the Snapchat IPO and Gap’s new 90s inspired campaign.
Rebecca Minkoff teams with Like to Know It to make LA show shoppable [WWD]
Ivanka Trump’s brand responds to Nordstrom [Racked]
John Lewis and Jaguar Land Rover are trialling shopping deliveries straight to your car [Forbes]
LVMH sets up new investment vehicle for emerging brands [Fashion United]
Ralph Lauren CEO Stefan Larsson quits after dispute with founder over creative control [WSJ]
UK department store John Lewis has teamed up with Jaguar Land Rover’s mobility and venture arm InMotion, to trial delivery to shoppers’ car boots.
Enabled via start-up toBoot, which is supported by InMotion, the service places a “smart box” in the customer’s vehicle that allows them to add it as a delivery destination. A courier then receives a GPS location of the car along with the registration number and a one-time code that permits them access into the boot.
The customer in the meantime is sent real-time updates on their mobile, including order confirmation through to a final photo confirming successful delivery and the secure locking of their car thereafter.
Deliveries to a car boot aren’t entirely new in concept. Amazon started testing a service in partnership with Audi and DHL in 2015, while Daimler, Volvo and Volkswagen have also run pilot projects. This however is reportedly the first one trialled in the UK.
The concept was first tested in 2016 with a small-scale feasibility study that saw John Lewis packages delivered to Jaguar Land Rover staff. It will now roll out to a wider group of Jaguar Land Rover customers later this year, with John Lewis confirmed as an ongoing partner.
John Vary, innovation manager at John Lewis said: “We’re excited by how new technologies can help us create new, convenient options for our customers, so when Jaguar Land Rover approached us about this idea we were excited to work with them to test the concept. Having deliveries made to your car boot has the potential to be a major breakthrough.”
Of the trial, Drummond Gilbert, CEO of toBoot, said the team gained a huge amount of insight and learnings. “These include the need to conduct more frequent location checks on the vehicle in the run-up to delivering a parcel in order to avoid a customer driving off just as the parcel arrived for delivery,” he explained. “Also, from the trial involving staff at Jaguar Land Rover HQ we conducted the most stringent of GPS tests – trying to find one Jaguar or Land Rover vehicle in a car park full of them means your GPS has to be extremely accurate! As trials progress to a wider audience we will continue to learn and adapt our approach in order to deliver the best possible experience for our customer.”
Long-term you won’t have to own a Jaguar Land Rover car to be able to use such a delivery method either. According to the toBoot website, the system itself is in fact brand agnostic – it works on almost all cars manufactured since 2002. It can also be used for any delivery service from DHL, DPD, Parcelforce, TNT, UKMail, UPS or Yodel. “The long-term ambition is to deliver a fantastic service not just for [Jaguar Land Rover and John Lewis] customers, but for anyone who can benefit from the convenient, secure new delivery option toBoot is building,” Gilbert added.
Amazon, Google and Snapchat are the three top tech companies to look at for key stories over the past couple of weeks (and potentially the whole of 2016 in fact). From the launch of Amazon Go, which enables shoppers to just walk out of a shop while their phone handles payment, to the virtual reality “Window Wonderland” holiday tour Google has organised from a bevy of US stores – it’s all about more convenient as well as heightened experiential retail. Meanwhile, lots of brands are starting to experiment with Snapchat’s Spectacles too.
Also worth checking out from this past fortnight are a double-whammy of reports on free shipping and free returns, lots more about the uptake of chatbots, and a deep-dive on what the fashion world faces against the rise of extremism, populism and protectionism.
Thanks to Google, you can now take a VR tour of New York’s holiday window displays [Ad Week]
What Amazon Go means for the future of retail [AdAge]
In an interview in the past few days, the CEO of the merged Yoox Net-A-Porter Group said: “One of my biggest objectives is to transform the company into a mobile-only company.”
While various news outlets jumped on that statement, it’s probably not quite as bold as it seems. Convincing luxury shoppers to permanently abandon a bells and whistles website for an app might be tough, however good that app might be. The Yoox app certainly isn’t good enough just yet, even though the Outnet one is pretty impressive.
Full-scale websites still have their place and will continue to do so but Federico Marchetti’s statement of intent does underline how important mobile has become at all levels of the market. Perhaps he should have said he wants YNaP to be a mobile-first e-tailer, rather than a mobile-only one.
For now, he told Associated Press, mobile accounts for less than half the firm’s total turnover but Marchetti expects sales via smartphones and tablets to be around 75% of sales (sales totalled €1.74bn last year) by the end of 2020. He also wants overall sales to rise 17-20% annually in that timescale.
To help his ambitions, the company is developing further apps, finally added text search to its Yoox app recently, as well as a television shopping app with Apple TV. We should see more of this kind of thing for the firm’s own brands, as well as the e-stores it runs for brands like Marni, Jimmy Choo, Dolce & Gabbana and Armani, when its London tech hub opens next year.
Of course, tech doesn’t have to mean apps. Marchetti told AP that the company has some other inventive ways of meeting its same-day delivery commitments. It introduced services like seaplanes to drop off rush orders to the Hamptons this summer, for instance. And less tech but equally welcome is the try-it-on-while-we wait courier service.
All of that is particularly aimed at the firm’s EIPs (that’s Extremely Important People). They may account for 2% of customers but they spend one-third of the cash that the business generates.
This post first appeared on Trendwalk.net, a style-meets-business blog by journalist, trends specialist and business analyst, Sandra Halliday.
Kunal Bahl and Rohit Bansal, co-founders of Indian marketplace Snapdeal, recently sat down with the team from venture capital fund Andreessen Horowitz to discuss the e-commerce scene in their country.
Speaking on the a16z podcast (a must-listen if you don’t already), the group explored everything from inefficient supply chains to evolving digital payments. The conversation comes at a time when competition is heating up from international players like Amazon, as well as local market leader Flipkart. Snapdeal with its 300,000 different merchants selling everything from computers to women’s fashion (its most popular category), is now ranked third in the country.
Head on over to Forbes to read the full story; a breakdown of everything you need to know about the current marketplace e-commerce scene in India and the barriers being overcome.