Shoptalk 2018: Artificial Intelligence in Retail
Thursday, March 22, 2018

ShopTalk 2018:  Artificial Intelligence in Retail

Shoptalk Emblem

From a general walk around the tradeshow floor, one thing is very clear. Artificial Intelligence in Retail is definitely one of the key tech themes for the year. So many startups to choose from, and almost half of them had some element of machine learning, AI, or deep learning algorithms as the running theme. But artificial intelligence in retail ran hot among the speaker sessions too.

Three points struck me at the show this year:

  1. Retail is going through a renaissance (NOT an apocalypse)
  2. Customer Service, Customer Service, Customer Service
  3. Artificial Intelligence in Retail is here to revolutionize!

Day 3: Physical Retail Experiences

Shoptalk 2018 - SpeakerStarting off with the trend of ‘Physical Retail Concepts for Digitally Native Brands’ – Ben Fischman, CEO of M.Gemi took us through the history of his firm, and key learnings on the digital journey. M.Gemi is a three year old company that opened it’s first physical store in 2016. An interesting point is that M.Gemi brings the historic craftsman arts of Italian hand-crafted luxury footwear to the modern age. It is about taking an otherwise $900 pair of luxurious shoes with NO compromises in quality, and offering it at $250. M.Gemi has refined fast fashion in footwear to the point of condensing the typical 9 month development cycle down to three, with an entirely new style of shoe launched EVERY Monday at 10:00am.

Furthermore, Ben highlighted his commitment to physical retailing stating that at M.Gemi they “believe that the physical experience is an essential piece of the customer experience today.” Customers want to interact, with the physical product. An interesting point shared is that the “physical experiences they are most proud of … is that 80% of their customers don’t stick to the physical world. They go into both physical and online because they have weekly changes to their fashion.” In effect omni-channel retailing isn’t just important to M.Gemi’s business, it is the way M.Gemi customers shop. Sometimes physically, sometimes mobile, sometimes online (desktop/laptop).

Frank & Oak – Online to Physical Migration Exhibition floor at Shoptalk 2018

Frank & Oak has been a tremendous success at a time when physical retail seemed to be in a spiral. Ethan Song, CEO, raised $40 Million in funding the opening of 17 stores across Canada. This from a company that started as an online pureplay. Two crowning experiences on which Frank & Oak focuses are the community aspect of the brand, and differentiating by making their offering a full, premium experience purchase journey. The most interesting learning Ethan shared was that running a physical store business is vastly different from an online only retail play. There are complexities, and more unexpected challenges that come into play, daily. Yet, the physical experience is a dimension that is quickly making the brand iconic.

A Single Product Store

Image of an Away store

Gen Rubio – Chief Creative Office and co-founder of Away, discussed creating a retail chain with only one product. Away only sells their own high-quality luggage. The stores are created such that they are ‘insta-grammable’. This being a concept predicted in an earlier OrderDynamics blog, as a theme for 2018.

Gen surmised the importance of physical retail well, pointing out that “Stores (physical) are a way to add value to the brand in a way that you cannot do online.” For those who have not been to an Away store, it is all about a beautiful, visually impactful experiential store, that takes you for a journey, before your journey begins. The product itself is generally at the back of the store, or around the sides – there to support, by helping you get you to the adventure you desire. Away stores are about creating an ecosystem of the travel journey itself.

Samsonite – Tumi Lesson: Control Your Ecommerce

Shoptalk 2018In a discussion about the future of ecommerce, Charlie Cole, Chief Ecommerce Officer of Samsonite made a central point very clear. When working online, or in doing so with your multi or omni-channel strategy, maintain control. Specifically, his lesson targeted pricing. He expressly stated that “if you don’t control pricing – then it is a race to the bottom.” Part of his lesson was that if you are a high end or reputable brand, that you make sure your retailers are not engaging a price war, and thus devaluing your merchandise. This erodes the brand, and will ultimately impact your margins in the long run.

About selling on Amazon, Charlie mused that given an opportunity to do it all over again, most online retailers might choose NOT to join certain wide and price focused marketplaces. When competing on Amazon, his advice to retailers was to keep the Amazon SKU’s isolated from the products you sell through channels, and physical stores. This keeps brand and product awareness high, while not destroying margins across the premium range of the category.

 

Where does fashion retail stand in omnichannel? Find out in 2-page OMS Brief

 

Day 4 – Bring on Retail’s Autonomous Vehicles

Brian Walker, Managing Director at Accenture Interactive, kicked us into the land of autonomous vehicles, and the implication on retail. A new era with autonomous vehicles will bring new services, and conveniences to the world – which retailers will have to embrace. Specifically Brian proposed that the impacts will be felt on:  Outside of the Venetian in Las Vegas

  • Customers
  • Stores
  • Products

If the vehicle and maintenance costs decrease significantly, there will be new boundaries and definitions to the omni-channel experience. Online and offline will blend and blur further. Autonomous vehicles are already part of some delivery processes, but imagine the next few years when it is part of the marketing budget, used to directly impact in-store foot traffic. Elder, disabled, or remote customers can either schedule or have the retailer send an autonomous vehicle to bring them directly to the store. Alternatively, an app might summon a traveling store directly to the customer’s location. This might be especially attractive for high end, quality goods. Take a further step, and a small cluster of autonomous vehicle might bring a traveling mini-mall directly into shopper communities.

Mobile Merchants

Self-delivering truck at Shoptalk 2018

On the heels of visionary thinking, Daniel Laury, CEO of Udelv showed the audience what exists today – in the ultimate traveling salesman story. Correction, this would be more of a traveling order fulfillment story. Udelv is pushing a new paradigm with the world’s first custom made autonomous vehicle for last mile order fulfillment. This autonomous, electric vehicle started deliveries in February.

It is fully automated. There are 18 compartments on the truck, of four different sizes. When delivering to a customer’s home or preferred location, the recipient uses an app to approve the vehicle to open their compartment, which pops open. The shopper then collects their goods. Udelv’s vehicle then closes the compartment, and auto-drives to the next consumer.

According to Daniel, Udelv’s business model work, and will be profitable in the short term.

Artificial Intelligence in Retail – Panel Panel discussion at Shoptalk 2018

Ending the conference, Bernardine Wu, CEO of FitForCommerce hosted a panel discussion with George Babu, Chief Product Officer of Kindred, Lisa Bougie, GM of Stitch Fix, and Sahal Laher, Chief Digital Officer of DXL Group.

Key to the panel discussion was the theme of how to bring in, and adapt to artificial intelligence in retail. All three panelists agreed that artificial intelligence in retail isn’t about displacing people’s jobs. Rather it is about taking on mundane aspects, and roles of the work, and letting human associates focus on the more challenging, difficult, interesting, and creative aspects of retailing. For example, category managers are often called to forecast next season’s SKUs, or to map out a SKU replenishment. These tasks are mundane and can be taken over by an AI to provide standard SKU replenishment plans. It alleviates human associates to focus on the exceptions, judgement calls, special allocation plans, and completely new products with no historical precedent or run-rates.

Lisa shared that Stitch Fix has already been using these AI algorithms to decide the standard buy plans, giving the buyers more time to focus on the new fashion purchase decisions.

Lisa shared her lessons learned to adopt artificial intelligence in retail, as:

  • Be clear about the vision
  • Be specific about the capabilities needed by your business
  • Highlight the benefits for the employees and customer
  • Create Tiger teams to expedite adoption, and remove barriers, and
  • Remember to celebrate successes.

ShopTalk 2018

Crowd at Shoptalk 2018Four days of the latest thoughts and ideas in retail converged on Las Vegas again, this year. Exceptional speakers, good networking, and many tech ideas for retail permeated this year’s event. All told the keys to Shoptalk this year were:

  • Lead with superior customer experience,
  • Omni-channel retail is here to stay (and grow), and
  • Our future includes artificial intelligence in retail

 

Author:

Charles Dimov - Director Marketing OrderDynamicsCharles Dimov is Director of Marketing at OrderDynamics. Charles has 21+ years experience in Marketing, Sales and Management across various IT and Technology businesses. Previous roles include Chief of Staff, Director Product Marketing, and Director Sales. Charles has held roles in brand name firms like IBM, Ericsson, HP, ADP, and OrderDynamics

 

 

 

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