The FGRT team is attending Shoptalk Europe 2017 in Copenhagen, Denmark, this week. The event, which runs October 8–11, is the inaugural pan-European version of the Shoptalk retail and e-commerce conference that launched two years ago in the US. Shoptalk Europe covers innovation in retail and e-commerce, focusing on the evolution of how consumers discover, shop for and buy products.
Shoptalk Europe is expected to draw more than 2,200 attendees, including executives from established retailers and brands, startups, and technology companies, as well as investors, media professionals and analysts. Our key takeaways from the first day of the conference include:
The FGRT team is attending Shoptalk Europe 2017 in Copenhagen, Denmark, this week. The event runs October 8–11 and is the inaugural pan-European version of the Shoptalk retail and e-commerce conference that launched two years ago in the US. The conference will focus on topics such as the shopping experience of the future, the digitalization of physical retail stores, on-demand delivery and logistics, shifting e-commerce trends, analytics, consumer behavior, and cross-border commerce.
Shoptalk Europe 2017 is expected to draw more than 2,200 attendees, including executives from established retailers, brands and early-stage tech companies, along with investors, media professionals and analysts. The event features more than 250 speakers, who represent a broad cross-section of countries and companies, including Alibaba, Amazon, Hudson’s Bay Company, IKEA and Pinterest.
Below, we summarize our key takeaways from the first day of Shoptalk Europe 2017.
1. Retailers that Master 3D Scanning and Printing Are Likely to Dominate Fashion in the Future
3D printing enables brands and retailers to deliver customized products through an automated, scalable manufacturing process, according to Bram de Zwart, CEO and Cofounder of tech firm 3D Hubs. Adidas, for example, invested in 3D printing technology to produce custom-made midsoles for high-performance running shoes. The company is also introducing 3D scanning of customers’ feet in order to produce tailor-made shoes with optimal fit.
Moritz Schiebold, CEO of 3D scanning and artificial intelligence (AI) firm Volumental, said that retailers that provide 3D body scan solutions to their customers will be better able to deliver customization, and consequently will see reduced returns and increased conversion and retention rates.
In October 2017, Internet giant Amazon bought New York–based tech firm Body Labs. Amazon aims to use Body Labs’ 3D scanning technology to enable customers to virtually try on clothes, among other applications.
2. Speed to Market and Social Media Marketing Are Key for Fashion Startups to Succeed
Three key factors behind the success of fast-growing fashion retailer Chiquelle.com are its ability to deliver products from design to store in two weeks, its strong focus on marketing, and its effective use of social media and influencers, according to Cofounder and CEO Pouya Boland. Chiquelle.com reached turnover growth of 200% per year, and the company has seen particular success using social media to engage with customers and expand into new markets such as Finland. It is important to follow the trends in social media and move rapidly to respond to them, Boland said. For example, Instagram Stories have quickly become the most impactful function on Instagram, with an impact that is 200% bigger than regular Instagram posts, according to Boland. The reason is that Instagram users tend to browse videos that appear on top of the app’s page rather than scroll down to images posted hours before.
3. Experiential Retailing in Physical Stores Is Good for Revenues and the Community
Physical stores are key for retailers seeking to engage with the local community. John Argento, Managing Director, Europe, for Bedrock Manufacturing, shared how his company built the Shinola brand around domestic manufacturing, product quality and engagement with the community. Shinola engages with local designers and manufacturers of products such as accessories and bicycles, he said, and local craftmakers can also use space in the brand’s stores to showcase their products. The company opened its first store in a deprived area of Detroit, MI, contributing to the regeneration of the neighborhood. Shinola also organizes various initiatives and offers facilities such as coffee shops in stores that encourage people to visit whether they need to shop or not. Shinola’s business model encourages store traffic and conversion and has a positive impact on the communities in which the brand operates stores.
4. Visual Search Technology Will Significantly Improve Product Discovery Experience for E-Commerce
Advances in visual search technology such as image recognition and AI have enabled consumers to discover products in a more intuitive way. Clarifai is a New York–based AI company that enables shoppers to drop an image in the search bar of their browser, along with key words if they choose, to search for items that cannot be easily described in words. The AI-powered system also recognizes and “learns” images in videos in real time.
Slyce.it, another visual search tool, enables users to digitize and redeem paper coupons by snapping pictures of them. Slyce.it has helped customers snap pictures of products they want to buy and then identify relevant products on retailers’ sites. The company partnered with Tommy Hilfiger to develop the first “shop the runway” app that allows viewers to snap a photo of a runway model and purchase the look instantly.
Twiggle is an AI-powered search tool that gleans product information from e-commerce websites to yield the most relevant products in searches. It provides companies with real-time feedback on what customers are searching for, helping retailers and brands develop the products that shoppers most desire.
5. The Supply Chain of the Future Will Be Driven by Speed
At several sessions at Shoptalk Europe, we heard about the need to improve supply chain speed in order to drive top-line growth. This represents a change from a few years ago, when retailers largely focused on optimizing their supply chains based on cost at the expense of lead time. Neil Ackerman, Senior Director of Global Supply Chain Advanced Planning at Johnson & Johnson, noted that, for retailers, improving supply chain efficiency is an opportunity to increase revenues.
Spencer Fung, CEO of Li & Fung, delivered a keynote presentation that stressed the urgency of retailers digitizing their supply chains and the tangible benefits that doing so brings to retailers. Getting the right products in front of customers improves the chance of a sale and decreases the possibility of a markdown.
6. Pinterest Is Not a Social Network, but a Robust Product Discovery Platform
Pinterest President Tim Kendall clarified that Pinterest is not a social media platform in the same vein as Facebook and Instagram, noting that Pinterest does not have functionalities for users to share their daily activities, for example. The platform is about helping users plan different aspects of their lives, he said, such as cooking, fitness, life events and beauty regimens, and the company intends to play a significant role in the customer product discovery journey as well as monetize product marketing opportunities. With 75% of its content generated by businesses, Pinterest has become a place for brands and retailers to get their products in front of customers when they first begin to show purchase intent. The company learned that shoppers do not usually have a specific brand in mind at that stage, so it is a good opportunity to market to them.
7. A Frictionless User Experience, Loyalty Generation and Knowledgeable Service Are Key to Mobile Commerce
Stephan Schambach, Founder and CEO of mobile retail platform NewStore, shared three tips to help retailers in the audience make the most of mobile commerce. First, he said that consumers want a frictionless experience. Retailers should look at everything from page load speeds to transaction speed and reduce the number of steps customers must take to complete a transaction. Second, apps are the new loyalty cards, Schambach said. Loyalty is now created through rich mobile experiences and through the provision of service and assistance anytime and anywhere, rather than through awarding points as rewards. Third, associates need mobile devices to better serve customers in stores, he said. Store associates can use mobile devices to access customer and product information, enabling them to better assist store visitors. Better service translates into higher conversion rates, Schambach noted, saying that 90% of customers spend more when they are assisted by a knowledgeable store associate.
8. Brick-and-Mortar Stores Still Matter
Despite the rapid growth of e-commerce, physical stores are not dead—they are simply changing. How brick-and-mortar stores employ new technologies and new models may determine how well they fare, however, as e-commerce grows. Jerry Storch, CEO of Hudson’s Bay Company, delivered a keynote presentation that discussed the tangible benefits that physical stores bring to retailers. He acknowledged that the US retail sector is overstored, but said that retailers can and should continue to play to the strengths of their physical assets. He noted that stores provide locality and immediacy to customers; that shipping items from stores boosts efficiency; that customers like the ability to see, touch and feel items; and that stores can be fun, entertaining and social places for shoppers to meet people, interact and attend events. Human interaction during the physical retail experience still holds value, according to Storch.
9. Last-Mile Fulfillment, Same-Day Delivery and Pickup Services Are Crucial in the E-Commerce Battle
Today’s consumers expect more convenience and a range of delivery and pickup options, so last-mile fulfillment continues to be one of the most rapidly evolving aspects of the retail supply chain. At Shoptalk Europe, leaders from several companies discussed how their innovative solutions can help retailers cut fulfillment times and speed their last-mile delivery. For example, UK-based Starship Technologies is using autonomous delivery vehicles for last-mile delivery. Launched by the cofounders of Skype, the company is operating in eight cities worldwide. The personal delivery device—as the delivery bot is called—uses sidewalks and public spaces and is monitored by human operators who can take control at any time. The company focuses on groceries, packages and takeaway foods for deliveries within a radius of one or two miles. The delivery bot is equipped with cameras and other sensors to navigate sidewalks and public spaces.
Damien Bon, CEO of Stuart, a French last-mile delivery company, discussed how consumers’ expectations regarding delivery are growing. They now expect transparency, predictability and speed, according to Bon. Same-day delivery can increase conversion at checkout by 20%–30%, he said, yet only 5% of retailers offer it.
Another crucial offering is the self-service collection of parcels. InPost is a company that provides parcel lockers, primarily across Central Europe, enabling shoppers to pick up their orders 24/7 from convenient locations. More than 5,000 InPost automated parcel machines were globally available across various business models by the end of 2016, according to InPost CEO Rafal Brzoska. The company plans to deploy another 4,000 terminals in Europe, Asia, the Americas and the Middle East.
10. China Is the Largest E-Commerce Market in the World and May Offer a Glimpse into the Future of Global Retailing
China, the largest e-commerce market in the world, is setting the benchmark for global retailing. E-commerce is expected to account for 18% of China’s $5 trillion retail market, compared with 8% in the US, according to the National Bureau of Statistics of China. The country represents 47% of digital retail sales worldwide, driven by its 731 million Internet users.
An executive from JD.com, the third-largest Internet company in the world by revenue, discussed the three pillars of Internet shopping: a wide selection of high-quality, authentic products at competitive prices; easy-to-use web and mobile interfaces; and fast and reliable delivery. According to Dr. Hui Cheng, head of JD.com’s JDX Silicon Valley Research Center, Chinese consumers’ higher expectations regarding service strain existing supply chain and logistics models. JD.com is the only e-commerce company with a self-operated nationwide logistics network down to the list mile, Cheng said. The company operates 335 warehouses and 7,000 delivery stations, and offers same-day and next-day delivery to 1 billion consumers. The future of online shopping will be powered by smart logistics, according to Cheng, who said that JD.com is developing and integrating intelligent handling robots, robotic arms and other warehouse automation technologies in combination with big data analysis to improve warehouse operation efficiency. JD.com is currently testing its first fully automated sorting center in Kunshan, China. The company is also testing next-generation delivery solutions, such as autonomous delivery drones for hard-to-reach rural areas and autonomous ground delivery for urban areas.