What's next in digital retail
Companies like Google, Apple, Facebook and Amazon are investing heavily in innovation, operating less like companies and more like research labs. Iterate Studios co-founder Jon Nordmark kicked off the closing “fast track” session at the Shop.org Digital Summit by sharing some powerful numbers: Those four tech giants spent more than $35 billion in research and development last year, up from $19.8 billion in 2013. The “GAFA” companies are also actively tracking and acquiring startups around the world; Amazon alone has acquired 65 companies over the past decade. To stay competitive, modern retailers must keep a watchful eye on emerging technologies.
With this in mind, Stitch Fix’s Julie Bornstein, 3DLT’s John Hauer and SmartThings’ Maria Thomas took to the stage to discuss their retail experiences and what changes — and surprises — lie ahead for digital retail.
Personal style powered by recommendations
The question of how to provide personalized shopping experiences to consumers is one that has long puzzled digital retailers. But Stitch Fix, an online personal styling service for women, thinks it has the answer.
According to Chief Operating Officer Julie Bornstein, “the founder of Stitch Fix, Katrina Lake, had the theory that there is probably someone out there better at shopping for me” than me.
So how do they do it? A new client fills out an online quiz where she provides her “size, her fit, her budget and her style preferences.” Stitch Fix then looks to its team of personal stylists — assisted by an algorithm — to select five items that will fit the client’s needs. Once the client receives her stylist’s picks, she keeps the things she likes and returns the rest, along with feedback explaining why she did or didn’t like the items.
As the company comes to fully understand the client’s style and needs, Stitch Fix becomes an indispensable part of the client’s shopping experience. And it shows: “80 percent of our first-time clients come back within 90 days to have a second fix,” Bornstein said.
With all of its transactions influenced by recommendations — a combination of smart algorithms and savvy stylists — Stitch Fix is proof that technology is fundamentally changing how retailers do business and how consumers interact with brands.
Adding another dimension to in-store experiences with 3D printing
Where can 3D printing make the biggest splash? And how does it fit in the retail space?
According to Hauer, recent in-store tests show 3D printing could go a long way in helping to enliven the in-store experience. In the case of a 3D printing kiosk placed in a Pittsburgh toy store, the results were remarkable. “Within 60 days, it became the most profitable real estate in the store. And over 25 percent of people who touched that kiosk ended up making a purchase.”
While 3D printing’s place in retail is still evolving, its potential shouldn’t be overlooked. “It changed the entire hearing aid industry in under 500 days,” Hauer said. “It was that effective and that quick. It has the potential to do the same thing in retail.”
Constant connection to the Internet of Things
“The first two decades of the commercial Internet were all about us. They were about you and me, humans connecting to the Internet, and controlling machines,” she said. “The next two decades are going to be about things, machines connecting to the Internet. And then importantly, machines connecting to machines.”
According to Thomas, IoT is nothing new in retail, particularly when it comes to logistics and supply chains.
But the innovation won’t stop there. Brands are already beginning to prepare consumers for the new modern age. According to Thomas, consumers should expect to see “more investment in experiential retail” in the years ahead.
“Already Sears and Target both have these prototype smart homes out in the Bay area that you can tour. What they’re really trying to do is help … educate consumers,” Thomas said. These concept stores answer questions like “What is a connected life? What are all these connected devices? What do I do with all these apps? How do they work together or not work together?”
Ready or not, the future is here.
#STORESMag is starting off the new year with its annual 20 ideas worth stealing. Check it out: https://t.co/0Pa1Rgzzac1 week ago