The news and online articles for the past couple of years have been claiming that retail as we know it is dead. Can advances in technology be the key to resuscitating it?
image source: Vision Critical
A recent Bloomberg article states that 3,000 new stores opened in the US in the last three quarters, but 6,800 stores closed that in the same period. What it tells us is that even though there is growth, the competition to stay in business is now even more difficult due to shifts in consumer expectations. However, there is hope on the horizon: new ideas and technologies designed to meet these expectations are promising to usher in a new and more robust era in retail.
Exploring how these advances in technology will propel a new understanding of the customer starts by looking at new ways companies are gathering their data. Older methods involved looking at surveys, loyalty programs, and seeing what the customer bought. Those are reactive analysis to the shopping experience. You find out what works after the transaction is completed or (worse) abandoned. To increase the accuracy of the analysis more real-time input is needed. This info will be more effective in optimizing customer experience to ensure closing the sale.
Online Retailers working to understand the customer
A good example of a retailer collecting more accurate real-time data is Bonobos, an e-commerce apparel company that works with the customer to ensure their clothes have more custom fit. When you enter a Bonobos store you try on some of the clothing offered and are measured and asked for feedback about how you want your item to fit. This means that the store has no inventory for sale; instead you order online to get your custom item of clothing. Data collected about an individual customer and their preferences can be very powerful in creating new items and identifying trends.
image via Time magazine - photographer Winnie Au
Another retailer that is harnessing that power is Stitch Fix, an online company that goes beyond traditional surveys to understand customer preferences and tastes for choosing clothes. At Stitch Fix you are encouraged to share as much about your preferences on clothing and design as you can with your stylist. You not only give information on fit preferences, but also celebrity styles you like, clothes you love, and trips you plan to take. You share all that style inspiration on Pinterest boards along with other details. How is all this data used? By adding it to algorithms. Algorithms were also mentioned in the technology post we had about Design. For Stitch Fix, three algorithms help create the custom list of items designed for the client. There are still drawbacks to this method. For example, if a client is new, or not as open to share this information, some assumptions need to be made by the data team. Even with current shortcomings, algorithms will continue to be adopted and improved on, and therefore have a lot of potential to improve the retail experience.
These ideas are useful for online businesses or stores that can operate without inventory on hand, but what about the more traditional brick and mortar retail?
Startups helping Brick-and-Mortars improve their business
There are many startups working on new ways to increase business and better manage inventory for traditional retail channels. Let’s explore a couple. The first is Third Channel, a company based in Cambridge, MA that is using on-site field agents to help improve store growth. They do this by monitoring store activities and being a brand ambassador for the store. The data collection by these ambassadors feeds into Third Channel’s software and creates real-time data that helps in everything from customer service to inventory management.
Another startup that is more focused on inventory management is Boston based startup Celect. They focus on using predictive analytics to help improve understanding of how customers choose products by looking at multiple retail channels (store, online, catalog, etc). The new ways of gathering data are powering a better understanding of how to reach the customer.
image via Celect
Stores of the future
Remember articles like this one from The Week, about stores of the future? Things that seemed so futuristic only a few years ago are quickly becoming a reality. There are so many innovations afoot it can feel overwhelming and can either be exciting or frightening depending on your perspective. Virtual reality replicating the in-store experience, mannequins that communicate with you via apps, being identified the moment you walk in through retina scanning that links to data collected on your previous purchases or searches - these are just a few of the high-tech ways retail is being brought into the 21st century. Consumers may welcome the convenience, but not the intrusion some present.
An alternate article that came out this month in Time Magazine talks about options with more customer friendly approach. There is retina scanning as a method of payment if you opt-in. Facial recognition is also right around the corner, but for now it will be geared to discounts on items you were looking at online rather than knowing all your history and background. Creators are experimenting with a mix of AI and VR, dubbed MR (for Mixed Reality), to project the image of a product for a customer to envision it on themselves, or in their homes. It will take the guesswork out of ordering for a customer who may be buying from the new model of store which may have little to no inventory for them to try on.
image via the Marginalist
These are attempts to make the online and in-store experience more seamless and successful. They may sound like a plausible cure for the ills of the retail environment, but some are bound to be met with apprehension not only by customers but also from retailers. The cost of equipment and implementation will most likely be very steep and there is no guarantee that their customers will buy in.
Another topic cropping up in articles discussing the future of retail is how to compete against retail giant Amazon. Fast Company put out an article in response to the shift in the retail industry caused by Amazon. It paints a grim picture for retailers not agile to the changing environment giving one example of fast fashion retailers like Zara and H&M that can produce their merchandise in 5 weeks versus traditional retailers who get product to store in 6-9 months. How can brands compete with the fast turn around of fast fashion, which produces its own industry ills? One suggestion to get more people into the stores is offering more custom products that are up to date with current trends. To do that successfully you need to have a clear direction for trends, but also have a way to pivot and make changes easily when designing and producing your product.
How Polychrome can help
Although there are many factors contributing to calendar stress for design teams and product management teams in the fashion industry, design development timelines don’t have to be one of them.
Many of our clients find that shopping for prints and trend at our online marketplace is a great alternative to making the expensive and time-consuming trips to print shows that are happening months in advance. Designers can get up to the minute trend direction and browse through our collection and shop for exclusive original prints anytime and anywhere. The artwork files are available immediately upon purchase with a transfer of copyright. What’s more, all the repeat prints are truly in seamless repeat, and are engineered to be easy to edit taking a fraction of the time to recolor, resize, etc. than our competitors’ prints. The CAD designers on your team will no longer have a bottleneck of tedious revisions. No CAD designer on staff? No problem - we offer custom services editing or digitizing prints, or coming up with a custom print just for you.
Getting some of that development time back will put you in charge of your calendar instead of being a slave to it, and your team will have more time to react to other things that might be hanging up the design and production process.
Click links below to find out more about specific services we offer to get you back on track:
Print Services | Trend Services | Custom Services
....and stay tuned for the next article in the series where we will look more closely at manufacturing innovations and how technology is helping to improve the production side of the industry!
Look for the tag #FastForwardFashion to keep up with this series.
Sources: Time | Stitch Fix | Celect| the Marginalist | Vision Critical | Bloomberg
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