Earlier this month, Kilara Le attended NRF 2016. Packing as much as possible into her two days at the show this year, Kilara gives her exclusive WhichPLM report here, which discussed the breadth of technologies on show this time around.
Thousands of industry leaders, retail fanatics and technology experts braved freezing temperatures – and wind chills to wake you faster than a cup of coffee – to attend the National Retail Federation’s Big Show 2016 in none other than New York City, from 17th to 20th January.
In true WhichPLM style, I had a saturated schedule before I even hit the show floor. A combination of talks, meetings, demos and new introductions were to occupy my time over the coming two days.
WhichPLM’s interests (and my own) this year were, and are, heavily stacked towards what is going on with 3D, the IoT (Internet of Things to those unfamiliar with the term), and connecting the store experience back into PLM for design or planning purposes. The latter, it turns out, is something PLM providers are also thinking about. As well as catching up with vendors with whom we have known for a long time, I also stumbled into some other exciting companies, demonstrating and working on some very interesting projects and collaborations.
As is usual following trade shows like NRF and Texprocess, I wanted to share some of these findings and observations from a technology, management trends and ‘future think’ perspective, in this WhichPLM report.
I’ve summarized the 5 top technology trends in a previous article, but will be elaborating on these trends and discussing some of the companies I had a chance to meet with here. For those readers who perhaps haven’t had the chance to read my last posting yet, the top 5 trends are as follows:
- IOT Enabling Visibility,
- Omnichannel is THE Channel,
- Big Data Leading Real-time and Future Decisions,
- Collaboration is Key to Success,
- Customer Experience and Elegant Human Interface
Due to the sheer size and scope of NRF, it’s more than likely I could have spent a few more days wandering from booth to booth, taken in experiences, and still not seen all of the great things being showcased. As such, this report can only go so far in summarising the show this year; for every company mentioned here it’s feasible to assume there are a further five. I’ve selected the most important parts of the show to share with our readers, that I believe you will benefit from the most, and that help to support WhichPLM’s view of the show for 2016.
RFID enabled dressing rooms featured heavily on the show floor, from the point of view of both retailers and technology. Both Intel and PTC were demoing these types of solutions, and I swung by their booths to find out more.
In PTC’s solution, they use an RFID tag embedded in a garment hangtag, a mobile app that reads this and delivers to the user immediate product information along with an image of the item. Items in the store can be tracked using antennas (at a range of 75-100 feet) – a partnership with View Technologies – and shown on screen using the recently acquired ThingWorx platform and Coldlight analytics capabilities to track product movement in the store, stats, sales and more. I’ll report further on this and some other cool things, namely their Vuforia augmented reality platform, within our exclusive interview with PTC, due for publication in the coming weeks.
Now Intel is synonymous with computer chips, processors, computer boards, and other hardware devices. But, what readers may not know, is that they’ve also partnered with some very forward thinking technology companies, visionaries and consultants to create retail solutions that have the potential to change how we all shop. These are the types of partnerships the whole sewn products and retail industry needs to be thinking about: interdisciplinary and cross-industry.
Jose Avalos, Head of Visual Retail for the Retail Solutions Division in the Internet of Things Group at Intel, was my guide to the Intel retail technology wonderland on display at their booth. The first thing I passed was a display of lavish Italian pasta (if such a thing exists) on a farmers’ market-esque store shelf with a mirrored screen above. Jose demonstrated that when pointing to a package of this pasta, information concerning price, content, origin, calories, carbon footprint and more flashed up on the screen above. This is currently being used in an Italian grocery store.
Next up was a smart digital store display meant to provide an alternative to shopping for white goods (refrigerators, washers, dryers, oven ranges etc.). This display is collaboration between Intel and consulting firm CapGemini and is being used throughout European retailer, Boulanger’s, stores. Consumers can look at items on a touch screen display and see specifications, reviews, options and pricing as well as view a photo of the actual item on a larger screen(s). This type of display saves a lot of floor space for these kinds of bulky items, can show them in a more attractive light, and can demonstrate what they might look like stocked with food or dishes, further engaging the consumer’s imagination. By analyzing what people look at on the touch screen and finally purchase, retailers and brands can glean more information regarding trends and consumer behavior.
Now I know what you may be thinking – what does any of this have to do with RFA? Whilst the solutions I’ve mentioned so far aren’t in the fashion space, the technology is still crucial. Smart stores with touch screen displays are intelligence and effective, regardless of industry. And, are often flexible anyway – smart stores are popping up all over the world, from industry to industry and plus, some of the biggest fashion retailers are also selling a wide variety of goods, even Amazon.
And NRF did have several examples of the ‘Internet of Things’ (this connected world we speak of) within a fashion retailer setting. First up: a collaboration with popular brand Levi’s using Intel’s Retail Sensor Platform to track the location of items and their movement in the store using RFID and antennas (150 foot range here). In this solution, when carrying a pair of jeans into the dressing room, a tablet on the wall reads the tag and the item information appears on screen. Should you wish to request a new size or color, you can order it from inside the dressing room via the same tablet on the wall, and the sales associate it is routed to sees the request on their mobile device as well as the number in stock and where they are situated.
This is done through collaboration with Sato America. Intel’s Trusted Analytics Platform (TAP) runs the backend analysis for item tracking and data.
There was also a size prediction solution in pilot, which is the result of a partnership between clothier, Brooks Brothers, and body scanning business, Size Stream. The solution uses a front and side photo, taken using the Intel RealSense Sensor and a tablet. This solution can predict the closest size for a customer in the store or be used for custom made-to-measure clothing with around plus or minus 3% accuracy.
Also in the area of size prediction was the Volumental foot scanner. (Readers with a copy of WhichPLM’s 5th Edition Report will remember this name well.) Volumental’s technology can scan a person’s feet within 2-3 seconds and create a 3D shape of their feet, which a sales associate can then use to match shoe styles and sizes.
And last for successful partnerships I’ll be reporting on, but certainly not least, was the ‘magic mirror’ collaboration with Mirum, using Realsense, to virtually try on jewelry. Whatever item the ‘customer’ selected, in my case a $2,000 necklace, floats virtually on your neck as you look in this digital mirror. You can also take a photo of yourself wearing it and share with friends. My new virtual bling is now on my virtual birthday list.
Another interesting thing that sparked my imagination was the ‘Anywhere’ outdoor locker system from Apex Supply Chain Technologies. This system allows users to unlock a locker with a scanned pick up code on their smartphone and retrieve an item inside. While not currently being used by any clothing retailers, there are some interesting possibilities across the retail sector, including fashion. The locker usage information is all real-time and held in the cloud, and can provide information including average dwell time, compartment size and availability and connects to a retailer’s order management system as well as interfacing with their other sites and systems. The intelligence behind the lockers can link order size and package size and help retailers to address “multiple buying personas within one consumer” according to Kimberly Carroll, VP of Marketing. She explained that Apex is working with some retailers and very open to doing some trials to see how they can help to “facilitate the last inch of the last mile” and “expand and evolve the way we think of brick and mortar”. The company is also launching multiple compartment sizes and compartments with hanger racks and currently has double-sided insulated compartments for quick pick-up of, for example, a latte or burrito ordered from a restaurant’s app.
Again, maybe this is not directly related to fashion, but read further to learn more about Steve Lowry’s vision of the retail mall experience of the future and think about the overall experiences that the IoT and connectivity could enable for consumers.
All of these experiences feed into the idea that omnichannel is now just the sales channel, not the segmented sales channels of years past. Retailers now recognize that a customer could come in with the item she’s (I’ll stick with the female pronoun here, to help the flow of the story) looking for on a review page on her phone and a store could immediately locate it for her, or the brand’s app she’s loaded could do it for her, because of the RFID enabled store. She could try on a pair of pants and then order the next size up from her smartphone in the dressing room because the sales associate can immediately see that they are out of stock of this next size up, or the color she wants. She could have it delivered to her home, or to the store, or perhaps to an outside locker to be picked up after she leaves the gym the next day. All of these options give the customer what they want when they want it, or at least as soon as is possible. They enable a good brand experience – something consumers have come to expect.
Speaking of potential store experiences …meet Pepper.
Pepper the robot helped to draw crowds to the NRF iLab, with its friendly face and sleek modern appearance. In fact, as an observation on how people interact these days, scores of people took smartphone pictures, selfies with, or video of Pepper and maybe 5 actually talked with the engineer escorting Pepper around.
Pepper is a “human-like” social and “friendly” robot with fluid movements from its jointed upper appendages. It is, in essence, a robot designed using AI to help and interact with humans utilizing IBM’s Watson. It has been designed to function in our human scale spaces such as in the home or in a retail environment. While Pepper is not yet for sale in the U.S., sales have been a huge success in Japan where shipments apparently sell out in minutes. Also of interest here is the fact that apps can be written for Pepper’s interface, much like those for smartphones, but instead have many reactive or emotional responses complete with hand, head and eye movements, using the GUI or the open SDK info. Aldebaran is the ‘mother ship’, as it were, of Peppers and the company performed the keynote speech at the recent consumer electronics show (CES). Numerous interview videos with Pepper can be found on YouTube.
As experiences go, this one was pretty unforgettable.
As I mentioned in the ‘5 Big Trends’ article, app-like development is becoming more and more common amongst software companies, including providers of PLM. Also gaining traction are cloud-based PLM installations and SaaS (Software as a Service) to ease the burden on IT groups, to speed implementation and to give easier access to turning on additional features and upgrades.
In our busy lives, we all as consumers have choices, but when we go into a store we are limited by what they have in stock. Whether we realize it or not, someone somewhere – a buyer, merchandiser, or designer – has anticipated our need and worked with others to source, transport and stock it. The connectivity with mobile and online stores does open up the possibility for finding something that is not physically where we happen to be and ordering it, or viewing it and then being directed to the physical store or location where we can acquire an item. Both of these scenarios provide an opportunity to do some data crunching to better understand how to get more products that consumers want in front of them, however they shop at any given moment in time.
As the link between front end product development providers and retail POS becomes more blurred, there are collaborations and investments with analytics companies popping up all over the place. For example, in December, TXT announced a global alliance with First Insight to harness their “customer driven predictive –analytics” and incorporate this information back into their software’s planning capabilities. Infor released a press release during the show on their recent investment in software company, Predictix, which will connect to their planning software. Analytics company, SAS, showed me some of their in-store analytics software and also mentioned their merchandise financial and line planning software with baked in predictive analytics.
PLM and ERP provider, Visual 2000, has an e-commerce platform that links with their ERP solution in real-time to verify product information and inventory. It’s better to know that you have 4 items left in stock and can let your potential customers know immediately, than to have them order the item and it be back ordered. The platform can also communicate with popular platforms such as Shopify and Magento if clients are already utilizing them through their websites.
Another interesting development that relates to customer feedback is an app that PLM provider Centric is working on for field-testing of products. This has been developed mainly for their outdoor clients who need relevant and timely feedback on their gear from the folks wear-testing it out in the fields, mountains, oceans or wherever. It’s an offline app so that data can be filled in while testers are off the beaten track and when the smartphone or device is back online it connects and imports this information back into the PLM system. Right now, they envision this as part of product development, but I can see a lot of potential for brands to use it with their premium customers, or first adoption fashionistas, to gain valuable feedback early in the product delivery cycle as well.
Let’s move on to visual trials and testing. 3D for design, and augmented/virtual reality solutions bridging product development and in-store planning were hot at NRF, shown well by both Dassault Systèmes and by PTC. Both businesses have created partnerships or made acquisitions to build on their 3D CAD design capabilities and extend the reach to mobile devices that read codes and show 3D models of products.
In terms of design, both are key players in the footwear arena, a sector that has been much quicker in adopting 3D design and experimenting with 3D display for retail than fashion companies who focus mainly on apparel. In this type of scenario, design really does flow through the development process and systems to reach the final consumer. However, creating a realistic looking product is important when the consumer will be the one viewing it. They will be expecting something very similar to show up if they order it. To make this happen, there is still some digital wrangling necessary, such as using scanners capable of capturing materials in 3D and applying them to 3D wireframe structures as was mentioned in my conversation with Dassault. Actual realistic rendering is less important for store layout and store walkthrough software, though software companies are making headway in this area as well, potentially further connecting the physical store with the online or mobile experience.
Anyone who’s attended a trade show before will know the technology on show in the booths that litter the halls is a major element. The other main contributor is the array of presentations on offer. Attending a large sample is a must.
First up for this report is “Retail Disrupted”.
Consumers are using digital devices as a shopping aid and the top 25 major retailers have lost about $70 billion in market share over the past 6 years to mainly smaller startups who are digitally enabled, According to Rod Sides, Vice Chairman, U.S. Retail and Distribution Leader at Deloitte LLP, “we are finding that digital is pervasive globally and that’s really driving change in the marketplace.” During Rod’s part of this presentation, he referenced the exponential rise in use of technologies such as AI, advanced analytics and 3D printing and the way they are accelerating the pace of change from a retail perspective. He challenged retailers to think about how to adapt to survive.
In the same presentation Paul Gainer, EVP of Disney Retail, shared that previous retail and e-commerce divisions have been combined to form one Disney retail division to really consolidate information and elevate the consumer retail experience by “creating magical moments for guests of all ages.” According to Gainer the company has created “centers of excellence for both our creative organizations and analytics that we could use to work across our vertical business and all of retail.” Because of extended enterprise systems such as PLM, ERP and others, product information is more easily accessible by users and analytics platforms.
John White, COO and EVP of Fossil Group, Inc., referred to the importance of omnichannel presence as “not just about the transaction but following the consumer in conversation whether they are on the couch at home or in the store”, He also acknowledged that, “that convergence of fashion and technology is important” and potentially a game changer for many industries. Fossil Group sells an enormous number of watches each year in a $60 billion global market; wearables are currently a $15 billion global market, projected to be at $45 billion in 4 years’ time. So, to put this in perspective, says White, if the Apple watch, in its first year of sales, is “not the largest watch brand in the world, it is one of the largest, […] so clearly technology is impacting our marketplace not just from the consumer perspective but from a product and branding perspective as well.” He continued that ‘millennials’ are “twice as likely to buy a wearable” – a considerable, yet not surprising, statistic.
Christiana Shi, President, Global Direct to Consumer at Nike, mentioned disruptive opportunities and Nike’s role to inspire and innovate athletes everyday and how they “believe it’s our job to put the consumer at the center of everything we do” by giving them easy access to Nike products and experiences. “We operate our business in a connected, global and multi dimensional way” by connecting consumers through their website, on a common global e-commerce platform, and carrying that through all touch points. Like many retailers, Nike’s e-commerce sales are really accelerating with FY15 growing by 56%. They are implementing seamless commerce to have one checkout for all stores and online as well as a new real-time app just for their devoted “sneaker heads” to know when the latest sneaker drops are. They also have the capability in some of their stores for consumers to try on merchandise that particular store doesn’t stock, order it via mobile with no shipping cost, and even pay with cash for an online purchase, “which creates digital access in the community,” says Shi.
So, in summary, watch out (no pun intended …well maybe) for disrupting technology and competing companies coming out of left field. Get your payment, product development systems, channels, website, messaging and mobile access aligned. All of of this will help you to cultivate a seamless brand experience that creates value for your customers and community.
This session was hosted by Courtney Reagan, CNBC Retail Reporter, who reminded the audience that retail was tough especially when today’s consumers were investing more in experiences and their homes versus what is in their closets. She alluded to the need for congruity between stores and online and described the first speaker’s mall space in San Francisco as still “bustling” and tech enabled. She also told us that it has a co-working and event space for retail start-ups (how smart is that?!)
Steve Lowry, Co-CEO of the Westfield Corporation – a retail real estate company – stated in this presentation, “business is beginning to realize that their biggest threat isn’t one another, it’s actually the status quo.” Lowry stated that the ways to connect to consumers are evolving, constantly, and when the customer is happy, “we all stand to benefit.” He challenged retailers to share data freely and openly with each other and their partners and aptly stated that, “collaboration is the new competition.”
When consumers go to shop, they are looking for a great experience, not thinking about one single brand or store, and they are committed to making partnerships to win in the physical and digital world. “The fact is that digital retail is growing even faster than physical retail.” We must make physical experiences at retail more exciting, and much more relevant and competitive. “To do that we need to partner together to share knowledge and information more freely and build better physical and digital experiences that service the customer demand.”
Sir Charlie Mayfield, Chairman of John Lewis Partnership followed up with some interesting information about the history of John Lewis stores (John Lewis and Waitrose stores in the UK), in that they are entirely employee owned and each employee, including himself, receives a percentage of profits based on the store’s yearly performance on top of their salary. They and the community all benefit from the store’s success. This sounds like it’s part of the modern B-corp movement to me, except this has been standard in their stores since 1929. Each person in the company receives the same percentage boost, all 9,000 of them.
As for shopping, he said that 80% of their best customers shop across both channels and 75% of all transactions use both online and physical store in some combination. He made the great point that customers don’t care, or even know, about channels and retailers need to decide “which language they speak: channel or customer?” He also stated unequivocally that investment in IT and supply chain and product data is essential – we agree Sir Charlie! As well as having unique products in the store.
Kevin Plank, CEO of Under Armour, spoke next and informed he was greeted by ecstatic fans from Brooklyn flashing their Under Armour branded underwear waistbands in the men’s room (he and Sara Blakely of Spanx probably could co-author a bathroom book about this) on his way to speak about his company’s commitment to changing the way athletes live and connecting them to the products and lifestyle of the brand. Plank reminded the audience that he founded Under Armour because “the athlete never had a choice” and there were not very sophisticated fabric options available to them.
He shared their 20-year growth curve, which basically follows the trajectory of a jet plane taking off. Their e-commerce strategy is personalization and localization. He stated that, “consumers want experiences and flexibility, and they want us to meet them where they are, wherever and whenever that happens to be.” Consumers know more about their car than their own body, but they don’t know data on how many days they were sick last year.
They want to change this with the idea of Connected Fitness and have made a lot of acquisitions of fitness technology companies and apps for this fitness network. They currently have over 160 million registered users using their brand’s fitness apps. With this massive amount of data, soon users will be able to benchmark themselves against others in the same demographic and Under Armour will have unprecedented data available on their customer base, from their eating habits to how much they sleep and when and where they use their products. They intend to use this data to convert it to sales and better serve their customers, and sell more shirts and shoes.
So: connect, connect, connect. Do it in stores with your customers, retail partners, platform providers and your employees. Connect your digital presence to your physical presence be it in stores, in your products or with your customers. Use the data you glean from these interactions and observations to improve your products, brand experience and people’s lives.
Thinking about how the smartphone has enabled our lives and changed the way we live, work, play and shop as well as the software that we use at our desks, it seems pretty clear that the world of IoT is already pulling us through the next wormhole (don’t worry, your smartphone is coming too).
I think it’s safe to say that I will never look at shopping in the same way after this year’s amazing ‘Big Show’. I’ll be expecting to be able to locate items in a store with an app or by asking an employee to locate it with their tablet, and if they don’t have it then I should be able to order it right then and there from my phone. Or maybe Pepper can do it for me? Heck, I might even expect that they know what I need before I get in the store – is that too much to ask?
Based on the pace of change, number of collaborations and new partnerships from platforms to predictive analytics, it might not be that far off. I was really impressed by the caliber of solutions on offer at NRF this year and the breadth of solutions that are extending product development through to the final consumer, both on the physical product side and the digital product side.
There really are so many possibilities for the retail industry, which is why shows like NRF are so awesome and important for people to attend. Not just for people like me to explore what’s new and talk to like-minded individuals, but also for companies to find real solutions to problems they may or may not know that they have. There is also a great opportunity for solutions providers to identify new directions and connect to the pulse of the retail industry to make it better, faster and stronger.
In the next year I fully expect to see, clothing that reads my mind, a partnership with Pepper and Roomba (being friendly is great, but being friendly and useful around the house is even better*) and a counter culture emergence of custom hand embroidery and an app that predicts what I should embroider based on my food intake, mood and stress level.
You can catch Kilara’s exclusive interviews with some of the top names at NRF this year, in a very-soon-to-be published series. Stay on the lookout.
*I would like the developers of Pepper and Roomba to talk – I don’t see why a robot can’t be friendly and able to vaccum at the same time. Plus with arms and fingers, Pepper can get into the corners that Roomba just can’t reach.