When SXStyle was added to the South by Southwest (SXSW) program, it delivered a series of fashion shows and trade show displays. In 2015, the SXStyle sessions blend in with Interactive, hosting some of the biggest names in retail and fashion to discuss how technology plays a greater role in their operations.
At “Retail Tech: What Does the Future Have In-Store?” Healey Cypher, Head of Retail Innovation for eBay, led the one-hour session, which was, “Our manifestation of what we think the future of retail could look like," with leaders from Levis & Strauss, Rebecca Minkoff and Target also on the panel.
Starting by taking a look back at the history of retail, Healey displayed a picture of a department store from 1910, and another from 2014. "It's the same isn't it? I think the difference is we've just created color cameras."
True, stores haven’t really changed in over 100 years, but they still play the largest role in the shopping experience. Currently, online retail sales account for only eight percent of consumer sales and 75 percent of all retail spending taking place in close proximity to shopper's homes.
"Stores aren't going to go away, but they are going to change,” Healey pointed out. “Consumers have changed. Their expectation is accelerating incredibly fast."
Today customers want immediacy and they want their shopping experience to be enjoyable and beautiful, both in the store and online. For the younger generation of shoppers, "If you're under 35 [years old], the first time you'll access the internet is on your phone. It's amazing. It's changing the world. Two-thirds of the world is using their phone the moment they wake up."
As retailers plan for mobile, be it tablet usage and device form factors, they design for each one. "But there's one form factor you may forget, and that's your store. The store is the touchpoint on the path to purchase, and we all know this. When you're in a store, there's nothing that's more immersive than that experience."
The physical and digital worlds are continuing to merge closer and closer together, with show-rooming blending into web-rooming, as shoppers perform more extensive research online prior to visiting the store, so when they get there, they already know what they want, have checked the price and availability, and are ready to buy.
Healey asked about the next challenge, "How do you understand someone's path as they go from the digital experience into the store?"
Referencing Deloitte's "The New Digital Divide" report on retail shopper's digital behaviors, he pointed towards the statistics, "If someone did research ahead of time, then used their phone in the store, the chances they converted were 86 percent, and the lift was 40 percent. It means that we have to think about all these different experiences and how we pull them all together."
Those were historical statistics. Just think about how those behaviors will shift in the coming year and years, as consumers expect, nay demand, a seamless experience when they go through that path from digital to physical and back again.
While retailers need to increase their focus on multichannel operations, "You know who doesn't care about channels? The consumer. They don't care. What they do care about is that they're dealing with Levis, with Rebecca Minkoff, with the Target brand."
Delving into how digital is changing the shopping world, he touched on five key areas: digital signage, empowering associates, providing tools for consumers, such as a mobile app or mobile payment option, and digital interaction.
One example: Adidas used digital signage that simply displayed their product. No messaging or sales information. It resulted in twice the sales for those shoes featured. In addition, "There was a halo effect around that screen. Anything within proximity of [the screens] had a 22 percent lift."
The fifth area of digital interaction is the Smarter Store. "We want retailers to think about an in-store session as similar to an online session," Healey stated, discussing how eBay makes investments in site-speed improvements and design systems to impact the shopping conversion funnel. "Every time you reduce the friction of that step you get more sales. It's that simple. The store experience is identical to that."
The moment a shopper enters your store, they hit the physical version of a home screen. They begin browsing, or searching, "Knowing that, how do you take someone to the cart, which is in our case, to the fitting room?" where two-thirds of the time, results in a sale. He continued, "If someone walks into store, and sees an item they like but it's not in the size they want, 65 percent of people will not ask for help. They'll just walk out. That's leaving money on the table."
Emily Culp, Senior Vice President of ecommerce marketing and retail at Rebecca Minkoff, starts off with a clear statement: their retail brand fully embraces the multichannel world in order to deliver a seamless shopping experience that today's women demand. "Our consumers are already there, and she's not very patient."
Further solidifying the marriage between physical and online, Rebecca Minkoff teamed with eBay to create “the connected wall” for their flagship store in New York. Culp demonstrated how it allows shoppers to engage with it through the touchscreen, much in the same way they would on their smartphone or tablet. A shopper can order a beverage to sip on while she browses, go through the lookbook, pick the color and size of a given piece, which then goes into a virtual fitting room. By entering her phone number, she'll be texted a notification that her clothes are waiting for her to try on.
Once she's in the fitting room, she can see what her pieces look like in different lighting scenarios, going from daytime to evening, and what other the hats or shirts could complement the look. Of those recommendations, they've tracked that 25 percent asked for those items to be brought into the fitting room.
When the shopper is ready, she can pay via her mobile phone. "She is able to experience all of our products through all of her senses," said Cray. "That's why we think retail at this point is really multi-sensory, and that's why we love the idea of integrating from online and offline."
Recognizing that the traditional sales funnel no longer exists, Culp stated, "It's not linear. It's not predictable. It's not controlled by the brand." What brands can control is really knowing who their customers are, including their pain points, and then taking steps either operationally or technically to remove any friction that exists. For the Rebecca Minkoff loyalist, "She's 18 to 35 [years old], and mobile is her life."
Knowing that the shopper uses her phone about 150 times a day, they began with their RM mobile app and then worked to design the other channels around it. It not only has the customer’s account information, but it stores all the looks, including style and size she tried on in the fitting room. If she didn't decide to buy then, she can easily buy later.
In the same way ecommerce systems track online shopping cart abandonment rates, Rebecca Minkoff can now replicate that tracking in the physical store via RFID tags and through what Culp called, "Dressing room abandonment. Why don't I send her an offer or a free trial? Again, we start to get that entire, holistic view of our consumer. That's where the magic really starts to happen."
For this brand, collecting, leveraging and applying data from every channel is central to their operations, "The insights you can get about your consumer and what you can offer them in turn, I think is one of the most impactful and exciting parts about being in marketing right now."
David Newman, Director of Enterprise Growth Initiatives, works with his team at Target to look at and plan for the "store of the future," working with concepts such as robotics for automatic inventory management, tracking and replenishment, to virtual reality to deliver a highly customized store experience. From your smartphone, "You can shop while sitting in the doctor's office or sitting on an airplane. If all you care about is music, crafts, and purses, that's all you'll need to see in that store, and we can deliver that."
It will all tie back to personalization and going beyond the today's shopping experience, "Know who I am, what I like and what I've bought. The key for us is, how do we play a role before you even think about going to the store, how do we become more active in that space, and then after you finish that trip, how are we there if there's a recall on the product, help you with returns, help you to recycle the packaging."
Target is already a large player in the mobile shopping space, with 13 million users of their cartwheel™ app and over $13 billion in sales. When it comes to the future, they're experimenting with gaming and the shopping experience through Bullseye Gaming, and how virtual reality and the Internet of Things, both big topics at SXSW, will play into improving traditional operations and attaining the goal of personalization.
Marc Rosen, Levi Strauss & Company Executive and President of Global Ecommerce, sees his company as the 162-year old startup. The challenge and question they're currently asking is how to leverage today's technology to solve problems that go back many decades.
Showing pictures of a pair of jeans, a bra and a swimsuit, "The women I think get it right away. Those three things are the hardest things to fit,” Rosen explained. “They're some of the most painful shopping experiences. So how do we make that less painful? How do we know you better? How do we understand your fit? How do we put that all together for you? If you can answers those questions you can win."
As opposed to some of the tech-oriented fitting solutions that exist today, which Rosen stated is similar to going through TSA, they're experimenting with something less invasive. Ultimately, Levis wants to own fit. "Being a jeans brand, the base of the outfit, if we get that fit right, we're going to have the deepest relationship with the consumer. That consumer's going to know and trust us."
For today’s fashion brands and retailers thinking about, investing in, and working towards meeting consumer’s evolving digital demands, Healey had a warning about jumping on the slew of technology bandwagons, "Does it really solve a problem? Because if it doesn't, you probably shouldn't do it."
Culp agreed. “We don’t do tech for the sake of tech,” instead she believes the leaders of a given fashion brand need to embrace quantified innovation, taking a smart risk approach to deliver that highly personalized, enjoyable, and multi-sensory store of the future.