In the last two weeks, Wired and UnBound events have hosted visionaries and practitioners of the retail world to talk about the ‘next big things’ shaping their industry in 2016 and beyond.
I attended both events, so here is my personal take on some of the things I thought were most interesting – they may not be the most likely to happen, or even what everyone is talking about. But they are the things made me think a bit.
Data is still the Holy Grail
Companies are working ever harder to try to unlock the undisputed value in their data. Artificial intelligence, deep machine learning and crunching data from multiple sources are marshalled to provide deeper insight on their customers. Layered with neuroscience, brain theory and behavioural psychology retailers are trying to understand our motivations better than we do ourselves.
The analysis of data is getting cleverer – check out Emotient. Their software can analyse facial expressions in video footage and assess emotion with over 95% accuracy. Gold dust for anyone analysing the mood of customers as they arrive in your store or want to know whether what consumers say in research groups is what they really think.
And it’s not just the huge players. Start-ups are using data from the outset to customise their offer and compete with the big guys – My Beauty Matches had me Googling their site with the promise of customised beauty recommendations across hundreds of brands and product ranges. Based on a mix of personal data you input combined with expert recommendations and the Amazon “people who have liked this product have also liked” model that continuously learns from your purchases, it claims to accurately recommend products that you might like and would be appropriate for you.
Big visions to leverage the power of the platform
Businesses are looking for a return on the investment they’ve made in their processes, systems, data management and innovation. They want to become the platform for their market segment.
In less than ten years Zalando are already Europe’s biggest online fashion retailer. Through ‘radical agility’, a strong culture of problem solving and ownership and by building strong partnerships, they want to become the global fashion retailing platform.
Ocado have invested in a huge and specialist UK infrastructure for grocery distribution and delivery . They’re continuing to innovate (even experimenting with bi-pedal robot technicians to make infrastructure repairs) and are looking to become the grocery platform for brands across Europe.
Even newer players are getting in on the act with My Beauty Matches talking about their ambition to be the “universal checkout” for beauty.
And no innovation event would be complete without Uber, who talked about wanting to become the platform for transportation, with crowd sourcing for business delivery becoming even bigger than their taxi service in the not too distant future.
As a counterpoint to this trend, the UnBound panel on the travel sector expressed surprise that no one had yet come up with a travel platform that really was a one-stop shop for creating your bespoke holiday, simply, cheaply, with relevant recommendations and with one checkout so that you never have to leave the site.
Talking of travel, Rent The Runway have ambitions way beyond hiring your prom dress. They envisage a day when we’ll rent our clothes – imagine arriving at your holiday destination with no luggage and a wardrobe full of appropriate outfits for your trip away. I can’t wait.
Constraints are driving innovation – last mile delivery
Interestingly, one of the biggest pain points for retailing was felt to be “last mile delivery”. How do you meet the demand from customers for fast, convenient, inexpensive delivery in a cost effective way?. Customers want it ‘now!’ and they want it to be free.
Solutions were many, varied and sometimes surprising. From Uber offering crowd sourced delivery vehicles, a boon for small, local businesses trying to compete with the big boys, to Starship Tech’s six wheel robotic buggy that waits at local service centres and trundles the last mile or so to your home once you log that you’re in to receive the delivery.
A final mention should go to 3D Hubs. Their innovative and green solution to long delivery distances is to design your product yourself and send it to a local 3D printer where you can pick it up shortly after sending the design. They already provide access to 300 crowd sourced 3D printers across London so this really is no longer the realm of Tomorrow’s World. It’s becoming a new reality.
The old adage of ‘delight your customer’ was a recurrent theme from almost all speakers. But the way to do it has changed. Wired predict 2016 is the year of Virtual Reality, with mainstream brands launching affordable personal headsets next year. Experience your holiday in-store before you book, be guided round the store by a virtual shop assistant or enable your friends to join you on your shopping trip. All these are being tested right now.
More immediately, building shopping directly into your other on-line experiences is getting more sophisticated. Examples include building purchase buttons more seamlessly into social media so that you’re not taken away to another site (something Zalando are working on) and developing videos that help you get closer to experiencing a product before you buy.
For fashion retail that on-going relationship is essential and the designer Henry Holland talked about how difficult it is to stay one step ahead of customer when they’re already creating so much of their own content. A big win for him was in trialling avatars modelled on your own measurements enabling you to see the fit of the clothes before you buy – increased conversion rates, reduced returns and more time spent on his site.
So, clearly there are a lot of cutting edge ideas in development that retailers of all sizes hope will give them the advantage over their competitors. In an age when consumers adopt and discard new tech like a toddler with a sugar high on Christmas morning, it’s hard to predict winners and losers. However, what we can say is that the more intuitive it is for customers to use and the more easily it integrates with their current tech, the greater retailers will see a return on their investment and the increase in loyalty that they want.