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Campaigns Editor's pick Retail technology

8 brands deploying vending machines as smart retail solutions

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.

Intelligent vending machines, which are expected to grow 17% globally over the next five years, come with technology that can provide invaluable customer data – making what was once an anonymous purchase into a visible opportunity for targeting and acquisition.

And so, brands and retailers have begun investing in activations where the machine is central to the experience, and dispense anything from beauty items to full-sized cars. Here we look at the most innovative vending machine experiences and technologies that are helping shape the future of retail.

Adidas: Live interaction
Adidas's World Series activation
Adidas’s World Series activation

To promote its new Splash Pack line, Adidas installed vending machines in two sports bars in LA and Boston during the baseball World Series. Customers were able to win a variety of limited edition products, from cleats to autographs and gear from Adidas athletes. The vending machine had built-in digital printing capabilities that would unlock different items based on the on-field action. For example, when player Chris Sale hit a homerun, it unlocked a chance to get his graphic tees. That created an ongoing buzz that kept fans coming back to check which new prizes were up for grabs next.

Lululemon: Data capturing
Lululemon's Run Stop Shop
Lululemon’s Run Stop Shop

Lululemon tapped into one of its core demographics, runners, by setting up a machine at one of its Run Stop Shops in New York, and another one in Chicago. Prizes included essential running supplies, such as Honey Stinger energy chews and Lululemon socks and hats. To win free goodies, customers had to answer a quick questionnaire on their workout habits, register with their emails and post a picture with the caption #thesweatlifeNYC or #thesweatlifeCHI.

Revlon: Social media shoutout
Revlon's gifting machine at Ulta Beauty
Revlon’s gifting machine at Ulta Beauty

In a similar vein, Cosmetics brand Revlon teamed up with beauty retailer Ulta to create a vending machine that toured the US to dish out free gifts with purchase for users also willing to engage on social media. After purchasing a product, clients would be encouraged to post a picture on Instagram with the hashtag #LiveBoldly – the title of Revlon’s latest campaign – in order to win a free gift. Different gifts were available depending on how much the client spent in-store.

Mulberry: Gamification
Mulberry's smart vending machine with TheCurrent Global
Mulberry’s smart vending machine with TheCurrent Global

Mulberry launched an in-store vending machine in partnership with TheCurrent Global, where visitors played a game of roulette in order to win prizes, from leather goods to vouchers to spend. The activity aimed to capture data on existing or new customers of the brand – in order to play, users had to input their social media handles and had the option to add their email address for further prizes. The machine was part of a larger #MulberryLights campaign for the holidays whereby it also toured stores in Edinburgh, Leeds, Manchester and New York.

Caravana: Retail theater
Carvana's vending machine
Carvana’s vending machine

When magnified, vending machines can provide customers with an automated retail theatre that only adds to the retail experience. US-based online car dealership Caravana has created a physical location that features a seven-story vending machine that quite literally, dispenses cars. While most of the purchase process happens online (buying, selling and financing), when the buyer wants to test drive, they can schedule to pick up their desired car at the vending machine, located in Indianapolis.  Adding even more to the experience, a Carvana employee will then hand out a giant coin that customers have to slot into the machine in order to retrieve the car. Alibaba has also launched something similar in partnership with Ford in China.

Dirty Lemon: Text-to-buy
Dirty Lemon's unmanned store
The Drug Store

NYC-based The Drug Store, which sells healthy beverage brand Dirty Lemon, looks like a walk-in vending machine for its entirely unmanned experience. Customers simply walk into the store and open the fridge to take any beverage, and walk out – there is no staff, cashier or even security in place. To pay, customers must text a number and say exactly what they are purchasing. The company has also deployed RFID tech in the refrigerators to track inventory sold, while a heat map tracker monitors customer flow.

Yves Saint Laurent: Customization
YSL's customizing vending machine
YSL’s customizing vending machine

To promote its beauty collection in Hong Kong, Yves Saint Laurent created a vending machine that added a level of customization to the consumer’s purchased. Called “Lipstick Engraving ATM 2.0”, the experience allowed guests to purchase lipsticks and have their name lazered on the product on the spot. “The concept behind the #YSLBeautyClub vending machine is all about fun and engaging way to interact with the brand. It’s about beauty on the go,” said Marie Laure Claisse, YSL Beauty’s marketing manager, at the time.

Hung Fook Tong: Personalization through AI
Hung Fook Tong vending machine
Hung Fook Tong vending machine

In Hong Kong, herbal tea chain Hung Fook Tong (HFT) is rolling out vending machines that use a combination of visual recognition technology and artificial intelligence to better understand and serve their customer. Machines will have cameras that photograph the customers, and create an individual profile that also includes past purchases. After analyzing data such as the climate at the point of sale, age and gender, the machine will know which drink or product a particular customer is most likely to buy and provide a recommendation.

How are you thinking about retail innovation? 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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business data digital snippets e-commerce product Retail social media technology

ICYMI: Mary Meeker’s internet trends, Balenciaga’s t-shirt meme, drones at Walmart

Balenciaga - ICYMI mary meeker internet trends meme
Balenciaga

A round-up of everything you might have missed in relevant fashion, retail and tech industry news over the past week.

TOP STORIES
  • Mary Meeker’s 2018 internet trends report: All the slides, plus analysis [Recode]
  • Balenciaga heard you like shirts, so they put a shirt on a t-shirt for $1,300 [Mashable]
  • Walmart’s future may include in-store drone assistants and smart shopping carts [CNBC]
  • How Natalie Massenet’s new VC firm sees the future of retail [Pitchbook]
TECHNOLOGY
  • Blockchain can help authenticate ownership of fashion goods [WWD]
  • Blockchain and beauty go together, according to Tev Finger [WWD]
  • AmEx pilots blockchain-based loyalty rewards with Boxed [RetailDive]
  • Google is actually pretty good at identifying what people are wearing [Racked]
RETAIL & E-COMMERCE
  • ‘Need it, text it, get it’: How concierge service Jetblack is aiming to beat Amazon Prime [Glossy]
  • How OPI is hacking Amazon and data algorithms to improve its online site [Glossy]
  • Lululemon hits record high on revamped stores [Reuters]
MARKETING & SOCIAL MEDIA
  • Snapchat launches its first Lens that reacts to sound [Engadget]
  • How Macy’s is using its store employees and stylists as Instagram influencers to drive sales [Glossy]
PRODUCT
  • ALYX’s Matthew M. Williams reveals data-inspired Nike capsule [HypeBeast]
  • Zac Posen’s new Delta uniforms are the ultimate high-performance outfits [FastCompany]
BUSINESS
  • The Gucci-Gap divide: How luxury is winning the race for millennial spend [BoF]
  • J.Crew will relaunch this fall [Racked]
  • The changing face of fashion PR [BoF]
Categories
data Editor's pick product technology

Can connected handbags bring emotional relevance and customer loyalty?

Rebecca Minkoff's #AlwaysOn connected bag - bringing emotional intelligence
Rebecca Minkoff’s #AlwaysOn connected bag

Here’s a question: If your handbag could talk, would you want the brand it’s from to listen? How about if sharing the data it collects on you could lead you to gain access to highly relevant, truly personalised and ultimately exclusive experiences consistently?

It’s a fine line between what of that is a serious privacy conversation, and what’s otherwise merely an outlined future of projected value exchange tied to the internet of things.

This is the future being imagined and worked on by New York designer Rebecca Minkoff with its line of #AlwaysOn smart bags launched in stores last week in partnership with EVRYTHNG’s IoT smart products cloud platform and Avery Dennison’s smart tag solution.

“We’ve always wanted to enrich our customers’ lives and deliver a brand experience that extends beyond the products themselves,” said Uri Minkoff, co-founder and CEO of Rebecca Minkoff. “By bringing #AlwaysOn smart features to the bags, we’re opening doors to a world of amazing, hand-picked experiences we think our customers will love, while making it easier than ever for them to access special offers, recommendations, and other loyalty rewards.”

The bags each feature a serialised smart label that, when scanned by a smartphone, will enable the owner to receive exclusive offers, product recommendations and video content from Rebecca Minkoff. For now, that offering remains a fairly basic one, but long term, the vision is indeed for truly personalised experiences presented off the back of real-time data fed to the business from the bags.

The roadmap for 2018, for instance, includes using geo-targeting to reach additional partners within the lifestyle, wellness and beauty realm. The user may well walk into a hotel in Austin, Texas, for instance, and be presented with personalised content recommending what to do while in the city. Collaborations can follow with food, travel, concert brands and more.

The concept marks a broad potential movement, according to a report commissioned by EVRYTHNG and Avery Dennison, that suggests brands should be using the data that digital products can provide to drive emotional engagements with consumers. Head over to Forbes to read all about the report findings.

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

What you missed: Burberry’s ARkit, AI transforming Shop Direct, Stella McCartney and The RealReal

Burberry's new ARkit integration
Burberry’s new ARkit integration

A round-up of everything you might have missed in relevant fashion business, digital comms and tech industry news over the past fortnight.


TOP STORIES
  • Burberry turns to Apple for augmented-reality fashion app [Bloomberg]
  • AI will transform every retailer, says Shop Direct boss [Drapers]
  • Stella McCartney wants you to resell her goods in new partnership with The RealReal [Fashionista]
  • Could kelp be the future of sustainable fashion? [Observer]

BUSINESS
  • Direct to consumer brands vs commodities: who will prevail? [LooseThreads]
  • Decoding Chanel’s Gen-Z strategy [BoF]
  • More luxury stores closed in China over the last year than in any other country [Jing Daily]

SOCIAL MEDIA
  • Target will begin incorporating Pinterest’s Lens visual search technology [AdWeek]
  • John Lewis pioneers Facebook’s 360 shoppable ad [Campaign]
  • Dior debuts Weibo story, stays in lead with Chinese millennials [Jing Daily]
  • Inside Birchbox’s 40-person social media war room [Glossy]
  • Snapchat debuts Sponsored 3D World Lenses at Advertising Week New York [The Drum]

MARKETING
  • Gant to launch ‘Couple Thinkers’ TV show on YouTube [Fashion Network]
  • Nas brings street cred to effortlessly cool animated ads for Timberland [AdWeek]
  • Why United Colors of Benetton is parting with catwalk convention to showcase its brand DNA [The Drum]
  • Fashion brands still succumbing to the high-priced artsy film [Glossy]

RETAIL & E-COMMERCE
  • Patagonia has launched its own online thrift store [PSFK]
  • New Macy’s loyalty program nudges customers to spend more [Retail Dive]
  • Uniqlo’s retail empire embarks on a digital revolution [Nikkei]

TECHNOLOGY
  • AR is now a must-have in retail [Business Insider]
  • A way to repeatedly recycle polyester has just been discovered [Eco-Business]
  • These high-tech knitting machines will soon be making car parts [Bloomberg]
  • Fashion’s future may rest on an old technology: glue [Fast Company]
  • Modiface is becoming the go-to provider of augmented reality to beauty brands [Glossy]

PRODUCT
  • Google and Levi’s ‘connected’ jacket is now on sale [TechCrunch]
  • To make a new kind of shoe, adidas had to change everything [Wired]
  • How these female engineers reinvented the bra [Fast Company]

START-UPS
  • With lab-grown leather, Modern Meadow is engineering a fashion revolution [BoF]
  • Amazon has acquired 3D body model startup, Body Labs, for $50M-$70M [TechCrunch]
Categories
business digital snippets e-commerce product social media sustainability technology

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

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

A round-up of everything you might have missed in relevant fashion business, digital comms and tech industry news over the past fortnight.


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

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

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

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

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

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

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

What you missed: AI for retail, the selfie’s influence on fashion, last mile challenge

AI is not optional for retail
AI is not optional for retail

A round-up of everything you might have missed in relevant fashion business, digital comms and tech industry news over the past week.


TOP STORIES
  • AI is not optional for retail [VentureBeat]
  • How selfie taking has influenced fashion [Edited]
  • In global e-commerce, the race to solve the ‘last mile’ [BoF]

BUSINESS
  • Avenue32.com confirms closure [The Industry]
  • Matchesfashion in £600m sale talks as buyers circle [RetailWeek]
  • Alibaba uses its shopping leverage [Bloomberg]
  • Amazon’s private label business is booming thanks to device sales, expanded fashion lines [TechCrunch]

SOCIAL MEDIA
  • This influencer marketing shop created fake accounts to prove that the industry is full of ad fraud [AdWeek]

MARKETING
  • How the sisters behind cult clothing brand Rodarte mastered fashion and film [FastCompany]
  • Sephora is creating the world’s largest beauty forum [The Cut]
  • The all-woman agency team on Nike who ‘Just Do It’ [AdAge]

RETAIL & E-COMMERCE
  • Nordstrom and Macy’s: A lesson in surviving the retail apocalypse [RetailDive]
  • ‘Retail isn’t dying’: How brands are competing for brick-and-mortar space [Glossy]
  • 4 things American department stores must do to survive [BoF]
  • What if stores charged admission? [BoF]

TECHNOLOGY
  • The virtual revolution of retail [Medium]
  • Do your customers actually want a “smart” version of your product? [HBR]
Categories
business Comment e-commerce technology

Comment counts: How AI is key to the future of retail

Advances in artificial intelligence are destined to make our lives and shopping experiences stronger than ever – good news for the consumer, and even better news for retailers, writes Uwe Hennig of Detego.

The AI-powered Macy’s On Call mobile tool from IBM Watson and Satisfi
The AI-powered Macy’s On Call mobile tool from IBM Watson and Satisfi

There have been a number of buzzwords and defining technology trends in retail over the last decade, from big data, to omnichannel, and the ubiquitous, omnipresent cloud. Now the internet of things (IoT) and artificial intelligence (AI) have become the latest talk of the town.

Forrester expects investment in AI to triple this year. By 2020, 85% of customer interactions will be managed by AI, according to research by Gartner. It’s becoming big business across industries, and not just in retail: the value of AI is estimated to be worth $36.8bn globally by 2025, predicts US market intelligence firm Tractica.

With the proliferation and accumulation of so much data as people shop anytime, anywhere – whether online, in physical stores or increasingly via their mobile phones – the conundrum for many remains: there’s just too much information to be able to make any meaningful sense out of it.

And that’s where artificial intelligence comes in. AI relies on a continual process of technological learning from experience and getting better and better at answering complex questions. Algorithms powered by AI can rapidly come up with alternative options which are otherwise much more time-consuming and laborious using conventional computer-powered A/B testing. Like the human brain, AI adapts to the environment and gets better the more you use it. But unlike humans, the capacity for improvement is unlimited. What’s more, boring, repetitive tasks are never a problem.

Plenty of examples in retail already fall under the hat of AI: chatbots are being used to help with customer service; personal shopping assistants like Amazon’s Alexa respond to voice prompts; and robots are replacing information kiosks in stores like Lowe’s in the US. Live chat functions on retailers’ websites are also proving popular for replacing staff with always-on robots and providing a continuous machine-learning customer service experience. But the future of this space looks even more AI-enabled.


Personalised service and the human side of AI

Retailers have long since struggled with maintaining ever-increasing standards of customer service as consumer expectations continue to rise. As people continue to shop more via the internet, retailers have to provide a faster, more effective, personalised service specifically aimed at the needs and wants of individual customers.

AI is set to help. eBay’s ShopBot for instance, is an AI-powered personal shopping assistant on Facebook Messenger that helps users find the best deals and sift through over a billion listings.

Chatbots have question and answer recommendation capabilities that are much more personalised than previous systems. They’re examples of retailers trying to create a near human interaction. Yet an IBM study in retail deduced that traditional retailing is too constrained to cope with recent technological advances and that the technology to date is just not human enough.


Humans vs machines

In spite of that, a new report by PwC says that around 44% of jobs in the retail sector are at risk of automation by 2030. AI is extremely good at repeated tasks and number crunching, so machines will do lots of manual processes in the future. We’re already seeing some retailers wanting to close off stock rooms and using robots to make automatic decisions about what needs replacing on the shelves, or managing the flow of goods for deliveries and onto the shop floor, for instance.

In the not too distant future, it will be common practice for consumers to pull out their phones and ask it a question as they enter a store, rather than seeking out a sales assistant or searching through the rails themselves. The smartphone can immediately respond that a desired article is available in a specific size and that sales staff can bring it.

Voice recognition systems and speaking to a computer or smartphone (like Apple’s Siri) for answers is already taking shape. Macy’s used a version from IBM Watson to do exactly this (as pictured above), and talking interactive screens and self-checkouts in fitting rooms is something we’re also already engaged with.


Real-time recommendations

AI, or machine learning, learns from past behaviour, as well as trial and error, to come up with more intelligent solutions. It’s not just science, there’s an art to selling too. Old fashioned rules-based analytics will soon become a thing of the past.

At Detego, this means making more informed recommendations to retailers using predictive analytics. So, much like the practice of online retailers flagging up similar items you might like as you browse the web, some retailers are now taking this to the next level using AI – and not just online, but in their physical stores as well (where still over 80% of sales are driven).

For example, whereas a sales assistant might, if you’re lucky, recommend something that’s evidently there on the shelves, an AI system would be better at identifying what would be the best items to offer based on many more criteria. These would include fundamental credentials like real-time product availability and the resulting profitability for the retailer, as well as other considerations like the consumer’s browsing history, or even what they’ve tried on before in the fitting room (thanks to “smart” RFID tags embedded into garments).

Informed recommendations can also be made by tapping into social media and other factors that might influence product choices, like current fashion trends or weather forecasts in different regions.


Predictive AI

Effective AI systems are also looking for re-occurring patterns to help avoid out-of-stocks and unnecessary markdowns, such as by promoting underselling lines held in reserve that otherwise would later have to be discounted. Not only will such advanced technology know when shelves are empty, but more importantly, it will predict what will happen next.

One of the biggest growth areas where AI can make a significant difference to a retailer’s bottom line – for mobile, online and bricks-and-mortar retailing – is in this field of intelligent forecasting systems. Previously, retailers were only able to predict roughly the quantities of products to order to keep shelves fully stocked using (often out-of-date) inventory levels and historical sales data (usually going back a few years, at best). These days, AI can develop a much more accurate picture of exactly what types of products, sizes and colours are likely to sell, by looking at multiple scenarios in real time (fashion trends, consumer behaviour, the weather etc) and drawing on data from the internet. This means forecasting is no longer so much “stab in the dark” guess work.

Using AI, German online retailer, Otto, predicts with 90% accuracy what will be sold within the next 30 days and has reduced the amount of surplus stock it holds by a fifth. It has also reduced the number of returns by over two million products a year. It claims to be so reliable, in fact, that it now uses an automated AI system to purchase 200,000 items a month from third party suppliers with no human intervention. Humans simply wouldn’t be able to keep up with the volume of colour and style choices to be made.

While some fashion retailers are working with Detego to exploit many of the latest technologies to help encourage more people into their stores and improve levels of customer service, forecasting in fashion is generally quite poor. Despite more than 1,500 stores already equipped with Detego’s software and over a billion garments digitally connected, the wider industry average for forecasting accuracy in fashion still lags at a paltry 60-70%. Although RFID tagging and real-time stock monitoring offers near 100% inventory accuracy, relatively few fashion retailers have rolled-out digitally connected technology on a wider scale.

It’s still only the early stages of AI, but with the promise of it making forecasting and product selections even more accurate, it’s set to become a rapid reality. Now’s the time to jump on board.

Uwe Hennig is chief executive of retail tech specialist, Detego. Comment Counts is a series of opinion pieces from experts within the industry. Do you have something to say? Get in touch via info@fashionandmash.com.

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

What you missed: Store of the future, Edward Enninful to Vogue, Walmart acquiring Bonobos

Edward Enninful is joining British Vogue as editor in chief - what you missed store of future
Edward Enninful is joining British Vogue as editor in chief

A round-up of everything you might have missed in relevant fashion business, digital comms and tech industry news.


TOP STORIES
  • A fantastical new world of high-tech, high-concept stores is here [Quartz]
  • Enabling the ‘offline cookie’ – why Farfetch’s store of the future is all about data [Forbes]
  • 6 fashion insiders on the British Vogue EIC news [Man Repeller]
  • Walmart is in advanced talks to acquire online men’s retailer Bonobos [Recode]
  • A new generation of even faster fashion is leaving H&M and Zara in the dust [Quartz]

BUSINESS
  • With Brexit now triggered, UK’s modern luxury CEOs discuss the early impact [LeanLuxe]
  • Burberry licenses fragrances and cosmetics business to Coty [Reuters]
  • Ralph Lauren closing Fifth Avenue Polo store, cutting staff [WWD]
  • Jenna Lyons out at J.Crew after 26 years [NY Post]
  • Luxury-goods companies are belatedly trying to go digital [The Economist]
  • Prada’s turnaround plan: fewer stores, more e-commerce [Glossy]
  • ‘See now, buy now’ is a publicity stunt, not real process innovation [BoF]

SOCIAL MEDIA
  • Snapchat vs. Instagram: Which Stories format is winning? [AdAge]
  • Snap-to-shop ads hope to drive retail sales [MediaPost]

MARKETING
  • Dear brands, quit trying to be my best friend [Racked]

RETAIL & E-COMMERCE
  • The whole ‘malls are dying’ thing is getting old, say mall CEOs [Bloomberg]
  • Macy’s CEO on the future of department stores [The Robin Report]
  • Alibaba’s new retail integrates e-commerce, stores, & logistics: is this the next gen of retail? [Forbes]
  • ModCloth, True & Co. point the way to e-commerce’s future [SF Chronicle]
  • How Mon Purse makes $2 million worth of customisable handbags a month [Glossy]

TECHNOLOGY
  • Artificial intelligence in retail: A smashing tool of omnichannel [Medium]
  • Adidas is kicking off the era of 3D-printed sneaker production with the Futurecraft 4D [Quartz]
  • What RFID technology means for retail [Glossy]
  • London to stage world’s first “smart street” [The Industry]
  • Why drone delivery still has a long way to go before it takes off [Retail Dive]
  • Inside Stitch Fix’s experiment to design clothing with an algorithm [Glossy]
Categories
data Editor's pick technology

Enabling the ‘offline cookie’ – why Farfetch’s store of the future is all about data

Farfetch Store of the Future
Farfetch Store of the Future

The physical retail experience when done right is magical, but the spell is waning, said José Neves, founder, co-chairman and CEO of fashion e-commerce platform Farfetch, at an event in London today.

His antidote? Technology. Or more specifically, the introduction of the Farfetch Store of the Future concept, which aims to link the online and offline worlds using data.

Neves pointed to the fact 92% of luxury sales today still take place in physical stores, according to a report by Bain & Company. By 2025, even with online sales growth, that will have only decreased to 75% and in his opinion it will likely then plateau, leaving the store still very much at the centre of the luxury industry. What has to shift however, is how those experiences take place, he said.

While the industry has been talking about connecting online and offline in an omnichannel sense – turning to ideas like click and collect, same day delivery and more – the missing link still remains around what happens on the shop floor. At this point in time, the majority of shopping experiences from the consumer’s perspective are entirely anonymous until point of sale, after all. There is no data on hand to enable otherwise.

“How can you really be serious about data when 92% of the action is happening in stores and you are not collecting data in stores?” Neves asked. During an average five-minute session on the Farfetch site, 15,000 data points are collected, he noted by comparison, highlighting one of the reasons his company is currently valued at over $1 billion, is looking likely to eclipse Net-a-Porter and is rumoured to be prepping for an IPO.

Farfetch Store of the Future
Farfetch Store of the Future

“Retailers need a way to collect information about their customers while they are browsing in-store, just as they collect data from online searches,” he explained in a press release. Indeed data is at the very heart of the new Farfetch proposition, built around driving personalised customer experiences.

“Store of the Future aims at providing the in-store experience of the future by giving visibility to retailers on what is happening in the store. It’s the offline cookie that closes the loop, between a great online presence and a complete omnichannel offering and, finally in-store technology which augments the experience of customers in store and overall. The next stage in the evolution of the fashion industry is the connected store, which uses technology to enhance the luxury retail experience to become even more customer centric,” Neves said.

A beta version of the Store of the Future was on show at the FarfetchOS event – so named for the idea of an “operating system”, which is what the concept aims to become. It will officially launch in Browns in London and Thom Browne in New York later this year, but has the potential to reach any one of the brand partners Farfetch works with, not to mention the hundreds of boutiques around the world, thereafter.

The system is built on the idea of a universal login or identity for each customer. Modular in form, it could consist of a multitude of different experiences, but the one on show demonstrated such ideas of a connected store as logging in initially using a QR code stored within the Apple Wallet, and then having access to things like a smart mirror that suggests recommended items based on an algorithm. It also recognises pieces brought in via RFID tags and allows the user to ultimately change what they’ve got for other sizes, colours and more accordingly, and then checkout via their smartphones too.

Farfetch Store of the Future
Farfetch Store of the Future

An early-stage product recognition tool meanwhile, allows items picked up off a clothing rail to then be logged in the user’s app on their mobile device to create an instant in-store wishlist. Everything is pinned back to that device identity. There was also a customisation bar on show with footwear designer Nicholas Kirkwood.

The central idea within all of it is built around an opt-in data-sharing concept, where the customer’s shopping preferences, browsing behaviour and purchase history are known so as to allow better and more personalised clienteling by the sales associate. In doing so, it enables such employees to rather become “in-store influencers”, Neves explained. The aim is to “humanise” the retail experience. It works well for luxury of course because of the fact this tends to be a more intimate and limited shopping exercise, comparative to say what Amazon Go is trying to achieve, which is about shifting mass products at scale.

As highlighted, the platform is a modular one, allowing Farfetch to tailor the tech solutions based on each brand and store. It’s an open API, meaning that Farfetch hopes others will build on top of the platform – existing indeed as an operating system with numerous applications created specifically for it, as opposed to a full solution.

Again, the key value lies in data. Simply put, Farfetch views its potential to connect multiple boutiques and brands around the world more wholeheartedly with the physical consumer as a huge opportunity for the future of retail. It’s gearing this launch primarily at the millennial customer, who it believes sees data as currency or a transactional entity – something it’s willing to exchange in return for value and service.

As Neves explains: “The mantra of this industry needs to be a single view of data. This is the single most powerful thing of the Store of the Future. It’s absolutely imperative that we bring that data intelligence into our businesses and deliver to customers incredible mind-blowing experiences that only data allows us to do.”

This story first appeared on Forbes.

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Editor's pick technology

Reformation opening tech-enabled store inspired by Silicon Valley

Reformation's tech-enabled San Francisco store
Reformation’s tech-enabled San Francisco store

Reformation is set to open its fifth store, this time in San Francisco, and inspired by brands that call Silicon Valley home, including Apple and Tesla. The result will be a more efficient experience for those who visit, enabled via touchscreen monitors and a smart dressing room setup.

The aim is to get away from the “self-service cafeteria” feel of so many stores, according to founder Yael Aflalo. “Most [stores] are super messy, you can never find your size, you have to wait in line forever, the dressing room lighting is the worst,” she told Fashionista. “I felt like a high-volume, high-end retail experience was basically nonexistent. So we wanted to blend internet and IRL to create a store we’d actually want to go to ourselves — that hopefully solves a lot of these problems.”

She took inspiration from the ease of shopping at Apple, where even on its busiest days, there’s a high level of customer service maintained. She particularly appreciated the fact the products are neatly on display, not cluttering the store, and used that to inform the way she designed her own space, placing her best selling pieces front and centre.

Reformation's tech-enabled San Francisco store
Reformation’s tech-enabled San Francisco store

The touchscreens meanwhile were influenced by Tesla, where there are similarly minimal models on display and instead digital interfaces that showcase the detail of everything you can purchase. “I bought a Tesla in a showroom and it left a profound impression on me,” Aflalo told Fast Company. “Usually buying a car is so difficult and horrible. But buying a Tesla on a flatscreen monitor was so easy that I wondered if I was doing it right: I picked the color I wanted, entered my address, and swiped by credit card, then it was all done. My car showed up a month later.”

Customers to the Reformation store can use the touchscreens to explore looks they like, and then select them to arrive in the dressing room. Much like the Rebecca Minkoff and Ralph Lauren experiences, that connected space allows users to request additional sizes, colours or styles, as well as do things like change the lighting and play your own music.

Aflalo says she’s already planning the next steps, including a system that merges both the online and offline experience in a literal sense – allowing shoppers to purchase an item there and then to have it sent home, or to pre-order at home and have them ready for you to try on when you come in.

The store opens at 914 Valencia Street in San Francisco on February 21.