Conference round-up: Wired Retail 2016

Technology is playing an increasingly important role in the world of retail, but for all the talk of cutting edge systems the reality is that the aim of all these solutions is to simply remove the friction in the shopping journey for customers and improve their overall experience.

This was an underlying theme at November’s Wired Retail conference in London where analytics, VR (virtual reality), AI (artificial intelligence) and conversational commerce were all discussed – but this was in the context of how they can be utilised to ultimately improve the customer experience.

Removing friction in logistics

Nowhere is there arguably more friction than in logistics and fulfillment, with customers continuing to be frustrated with home delivery. Among those offering solutions is Kevin Gibbon, CEO and co-founder at Shyp, who told delegates at Wired Retail that he wanted to solve the problem he encountered when personally selling goods on eBay.

“Packaging goods is still the big pain-point when people want to sell goods online. When you remove the shipping friction there is a 60 per cent increase in listings for those sellers. We are unlocking a whole new market for sellers,” he says.

Shyp involves sellers simply photographing their items and the company then collecting them before packaging them up and using major couriers to collect batches of ordered goods and delivering them to customers.

The service has been initially launched in four US cities but more are planned, as is global expansion. Shyp has also struck a deal with Shopify so that it is now being used by SMEs as well as individual sellers.

Another aspect of Shyp that removes friction in the retail experience is its use of full employees who are on the payroll. This shuns the strategies of the likes of Uber and is a result of Gibbon being convinced that this helps the business deliver a better service.

Idriss Al Rifai, CEO and co-founder at Fetchr, has the same thinking and has amassed a workforce of 1,400 at his logistics company, which addresses the problem many retailers experience when selling goods in emerging markets: “The problem is, in many countries people do not have addresses. It therefore requires multiple phone calls to deliver an item and involves lots of friction. It’s crazy to think the logistics industry works on addresses when there are no addresses.”

Utilising data

The solution at Fetchr is to use GPS technology data and to “make the phone your home”, whereby parcels are delivered to the location where the customer is located with their mobile phone. This has enabled Fetchr to ensure 97 per cent of items are delivered the same day, and returns are a mere 2 per cent versus an industry average of 12-14 per cent.

Jan van Casteren, VP of Europe at Flexport, is also using new sources of data to overhaul the way international supply chains operate: “The customer experience of freight forwarding is broken. It is a super bad customer experience.”

At the heart of his system is structured data, which Casteren says has typically been very fragmented and held in various Excel spreadsheets, emails and PDFs. This has not given great visibility of goods in transit whereas Flexport provides “end-to-end shipment visibility and SKU-granularity of items”.

Disruptive models

This has enabled the company to disrupt the established methods and provide solutions that: bypass the distribution centre and deliver goods direct to stores from containers; move the fulfillment centre to the production location and deliver packaged goods direct to the consumer as regular freight; and operate ‘floating stock’ that enables the changing of destinations of stock during transit.

Such disruption is also in the model of bed retailer Casper, which has made its name selling ‘bed-in-a-box’ mattresses direct to the consumer – cutting out the retailer middleman. Jeff Chapin, co-founder of Casper, says the business was built on the fact that existing bed retailers have been delivering such a poor customer experience.

“They did not care for the relationship because they saw beds as having only a seven or eight-year frequency of purchase,” he says. In contrast, Casper has used marketing that gets people to share content. “We’ve learned to leverage social media to scale-up the business,” he adds.

This adoption of cost-effective marketing and social media platforms has been the fundamental aspect that has fuelled the growth of Casper and enabled it to challenge the incumbent retailers, according to Chapin, who says it has been the same for other well known direct-to-consumer brands such as Dollar Shave Club.

The company is also using physical retail space – including a pop-up in London’s Covent Garden - to further build the relationship with customers and market its wares. “We’re increasingly using physical retail but it’s about trial. We have events where people can engage. It’s about events and not about conversion.”

Brands need to talk directly to consumers

Brands moving closer to customers will become vitally important in the future if they are to fight off the increasing moves by retailers – including Amazon – to develop their own brands, according to Niall Murphy, co-founder or Evrythng, who says they need to create a direct relationship with the end consumer.

This can be achieved by digitising products, whereby a physical product has an identity held in the cloud. These physical goods can then be the interface through which the consumer can be directly engaged. This is part of the Internet of Things, which enables myriad products to be digitally enabled and to create a data trail.

This highlights how businesses have to get a handle on data and use it to their benefit. Randy Dean, chief business officer at Sentient Technologies, says there is now the ability to use real-time rather than historical data to understand consumers’ intentions online and that this should now be used by retailers.

New era of more intelligent search

Behind this capability is AI, which he says is now heralding a new era of search. The ‘Sentient Aware’ solution takes a visual image of a product supplied by the consumer and breaks it down into many components. This enables a more intelligent search to be undertaken that is much more accurate to the individual’s requirements than traditional text-based search using a search engine.

“We are seeing double/triple-digit improvements in conversion. Over time we evolve the best variants to get the best possible results. It is always-on continuous optimisation. The personalisation of [searched for] items can also be assisted by using intelligence such as what is on-brand and current trends,” says Dean.

He says there is lots of talk about AI in the future, whereas he suggests there is AI that can be utilised today: “The sooner retailers embrace and adopt it then the more successful they will be.”

Retailers need to be braver

Tim Fleming, founder of Future Visual, finds there is a frustrating reluctance by retailers to accept that the world of retail is changing rapidly: “The High Street has not really changed much [in 100 years]. It is kind of business-as-usual while the whole mobile and online thing happens around them. Retailers need to react in a more brave way.”

One of these ways is through VR, although he admits it is still “ground zero for VR” and the biggest challenge at the moment is getting the technology in front of people. One progressive area of retail is travel, where Thomson Holidays and Virgin are among the companies giving customers a VR experience that gives a flavour of holiday destinations.

It is moves such as these that must at least be investigated by retailers, because not only is the technology available to deliver a better experience to the customer but these individuals are increasingly demanding an improved level of service. Otherwise they will shop elsewhere.

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