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Retail technology

41% of consumers will forego brands with poor personalization, says report

Weak personalization can have a negative effect on consumers, with two in five saying they would stop buying from a brand if they perceive their ads to be unrelated or poorly targeted, according to a report by marketing platform Emarsys.

The study, which interviewed 2,000 consumers in the UK, highlights shopper’s growing demand for more personalized offers (60%), adding that only 6% of consumers currently believe they receive these.

Creating a tailored experience is therefore key, with 41% of respondents say they would shop again with a brand if the offers they received were clearly unique and personalized to them.

However, brands are struggling to scale their human-led personalization efforts, identifying the need for automation processes and artificial intelligence (AI) programs.

“The customer is expecting an experience that they want to be personalized in a speed that is impossible,” a representative for German agile-retail start-up Les

ara, told the audience at the recent Emarsys Revolution conference. He added how technology is an enabler for personalization, and how the company has been using data as a “north-star” to guide its efforts.

Also at the conference was membership-only e-commerce brand, BrandAlley, which shared how its effort to tailor its email content to previous purchasing behaviour with the help of AI, increased traffic to its site by 16%.

AI adds immense value to personalization strategies, noted Grant Coleman, VP and market director of the UK and Nordics at Emarsys: “AI tips this balance in [retailers] favor, doing all the legwork so that communication is always tailored across every channel along the purchase lifecycle, eliminating the risk of upsetting valued patrons.”

Across the industry we’re seeing a steady increase in brands focusing on personalization by deploying tools such as AI. Recently, H&M invested in Thread, a UK-based men’s styling service that uses a combination of man and machine to tailor recommended items for its users. The move shows that the Swedish group is well aware of such technology as an important catalyst for all future consumer interactions.

How are you thinking about personalization? We’re all about finding you the perfect partners for your innovation strategy. 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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e-commerce Editor's pick Retail Startups sustainability technology

What recent H&M investments in AI, recycling and payment tech mean

Thread
Thread

H&M has invested in several major startups in recent months indicating a direction of travel for the retailer that’s related to greater personalization, a circular economy and increased convenience for shoppers.

The group announced it is backing men’s personal styling service, Thread, this week through its venture arm, CO:LAB. It is putting $13m into the artificial intelligence-based startup, which has just closed a $22m Series B round.

The UK-based service offers recommendations for men on what to wear by combining data with a layer of human insight.

The team behind it said the funding will go towards “hiring data scientists and engineers to make the artificial intelligence much more powerful”, according to CEO and co-founder Kieran O’Neill. The site sells 536 brands, including Paul Smith, Diesel, Barbour and Hugo Boss, among others.

What Thread has alongside that, of course, is data into how men shop and what their tastes are. H&M says its interest lies in exactly that to strengthen the personalized shopping experience that it too can offer shoppers at a time when such expectations are only increasing.

With that same consideration comes the fact shoppers now demand better options around payments, it has also noted. Enter its $20m investment in Klarna, a Swedish fintech startup.

The funding, announced just last week, signals a global partnership that will see Klarna’s digital payments technology integrated into H&M’s physical and digital stores. The outcome will “provide an enhanced omnichannel customer payment offering [and] a streamlined post-purchase service in the H&M app”, according to the company.

What Klarna is particularly known for is its “try before you buy” service, which gives shoppers the flexibility to pay for their items later. That will be available eventually to H&M customers in 14 markets, starting with the UK and Sweden in 2019.

Karl-Johan Persson, CEO of the H&M group, referred to the move as part of a strategic and relentless focus on creating great customer experiences.

Both come at a time when H&M, which has been struggling in the market, has promised its shareholders that it will focus on improvements around not only inventory, but the shopping experience directly, based on understanding the changing retail and consumer landscape it sees before it.

“We know the industry is undergoing a huge shift – the catalyst for this transformation is technology. It’s not just one technology, but a set that includes artificial intelligence, augmented reality, robotics and more,” he said back in February at the company’s Capital Markets Day.

“There are changing consumer behaviours as a result – they are expecting more and more. They expect a more tailored offering in how we set up our stores, in how we communicate with [them]. They want a hassle free shopping experience, and the ability to shop anywhere and anytime. And they want even better designs at higher quality and better prices.”

Meanwhile, the company is also placing a big focus on sustainability. One of its other broad ambitions is to move to a 100% circular model by 2030, which means that everything it uses will go back into the system to be either recycled or reused.

Another, quieter investment it announced in August helps with this – it led a £5m round for polymer recycling technology startup, Worn Again Technologies. This is a business focused on how to drive circularity for the fashion industry by separating, decontaminating and extracting polyester polymers and cellulose from cotton to create new products as part of a repeatable process.

As Cyndi Rhoades, Worn Again Technologies’ CEO, said: “There are enough textiles and plastic bottles ‘above ground’ and in circulation today to meet our annual demand for raw materials to make new clothing and textiles. With our dual polymer recycling technology, there will be no need to use virgin oil by-products to make new polyester and the industry will be able to radically decrease the amount of virgin cotton going into clothing by displacing it with new cellulose fibres recaptured from existing clothing.”

At present, less than 1% of non-wearable textiles are turned back into new textiles due to technical and economic limitations of current recycling methods. This will therefore help with H&M’s goal.

As the group’s head of sustainability, Anna Gedda, explained on TheCurrent Innovators podcast recently: “We only have one planet, and the toll [the fashion industry] has on resources today is simply unsustainable.”

How are you thinking about 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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digital snippets e-commerce social media Startups

Digital snippets: The North Face, Instagram Direct, Target, Barneys, Harrods, Karmaloop

The big news over the past couple of weeks in the retail and fashion tech space was of course the concept of Amazon drones, but multiple other stories grabbed the headlines too. Here’s a highlight of the best ones…

instagram-direct-2

  • IBM’s Watson explores the great e-commerce unknown with The North Face [AdAge]
  • What Instagram Direct means for fashion brands (as pictured) [Fashionista]
  • Barneys creates holiday .gif guide to appeal to younger consumers [Luxury Daily]
  • Harrods’ Christmas Weibo campaign engages London’s Chinese tourist influx [Jing Daily]
  • Karmaloop targets millennials with YouTube and Snapchat holiday plan [AdWeek]
  • Kmart’s ‘Ship My Pants’ gets the Dickens treatment for Christmas [AdAge]
  • Native advertising: the pros and cons [WWD]
  • Designing the next generation of wearables, with women in mind [Fast Company]
  • With 3-D printing, clothing that leaves out the sewing machine [NY Times]
  • Mallzee is a Tinder-esque shopping app that lets your friends play fashion police [TechCrunch]
  • Start-up Thread is building a scalable personal styling service, blending human stylists and intelligent algorithms [BoF]
  • Instagram is the ‘best platform for brands’ in 2013, beating out Facebook, Twitter, and Google+ [Venture Beat]
  • Retailers look to their best customers, not bloggers, as the new influencers [Fashionista]
  • Gap’s ad with Sikh model Waris Ahluwalia defaced with racist graffiti, drawing incredible response from company [Huffington Post]