In a world in which the volume of data from digital and physical sources is growing exponentially, how can retail marketers understand which sources to collect and leverage, and which to ignore?
In a world in which the volume of data from digital and physical sources is growing exponentially, how can retail marketers understand which sources to collect and leverage, and which to ignore?
Product differentiation on store shelves is getting a helping hand from the IoT. To turn in-store browsers into buyers, solution providers need to help retail customers accelerate their use of IoT, including technologies such as augmented reality (AR). A company that recently took the plunge into AR is Treasury Wine Estates (TWE), an Australian-based global winemaker and distributor that owns more than 40 popular brands, including Napa Valley’s BV, Beringer and Acacia.
For the company’s newest brand, 19 Crimes, TWE worked with J. Walter Thompson and app developer Tactic to create a series of animated characters for its label. With the help of AR and a mobile app, the bottle labels can “talk” to a buyer as they browse wines on store shelves.
To create this in-store experience for shoppers, Treasury Wine Estates and its project partners built an AR mobile app that can interact with the labels for the Hard Chard, Red Blend and Banished varietals in the 19 Crimes series. Once a buyer downloads the app and points her phone camera at a bottle on the shelf, the character on the label—one of the infamous rogues—becomes animated and tells his personal crime story. The shopper can also share the AR experience on social media.
Perfecting the AR Blend
According to Treasury Wine Estates, the goal of using AR technology on the label was to offer consumers a new way to engage with the 19 Crimes brand. The Tactic team created the personas of the animated characters, making each one unique. Tactic combined its expertise in character animation and visual effects with its knowledge of mobile AR to create the integrated shopping experience.
The company knew this particular wine series was an ideal test bed for animation-based storytelling. The 19 Crimes label is modeled on the founding of Australia as an English Penal colony. The label depicts a portfolio of prisoners who were banished to their new fate. Tactic used various voice talent to portray each character, and modeled each one to seamlessly animate from the brand's signature lines.
To date, the new technology seems to be locking in buyers, as 19 Crimes is currently one of the fastest-growing brands within the TWE portfolio. According to the company, 19 Crimes has grown to one million cases in annual volume over the last 12 months.
“19 Crimes is a wine brand that tells a rich and authentic story and has proven to have strong appeal to millennial consumers,” says TWE chief marketing officer, Americas, Michelle Terry. She notes in a statement that using this new label technique is “without a doubt one of our most successful innovations.”
Visualizing with AR
While the in-store experience for shoppers created by Treasury Wine Estates is unique, the use of AR in online shopping tools has already spread. Furniture store IKEA has an augmented reality catalog that enables shoppers to visualize how certain pieces of furniture could look inside their home. The app measures the size of the products against the surrounding room and fixtures to offer a true-to-life size, whenever possible.
Amazon recently added AR View on its Amazon shopping app. This feature allows customers to check what new products might look like in their home or office before buying them. Shoppers can select from thousands of items, including vases, toasters and furniture, and overlay the 3D images of the item using their phone’s camera. This use of AR allows buyers to get a better idea of dimensions and visualize the product in its future environment.
These early examples all point to future growth for AR technology in retail. Gartner predicts that by 2023, 25% of customer service and support operations will integrate virtual assistant technologies of some variety, including AR or robotics. This estimate is up from less than 2% last year.
Upscale Your Retail Customers
With customers increasingly expecting brands to engage via digital channels of their choice, and brands ferociously battling for market share; the retail and luxury space is seeing and ever growing integration of digital and physical worlds.
When a customer walks into a brick-and-mortar retail location, their actions are increasingly driven by online information claiming the store carries a particular item they want. Unfortunately, inconsistencies in actual inventory and product availability too often translate into lost sales for retailers when the customer finds that the sought-after item is actually unavailable.
This problem is sometimes called “phantom inventory,” which refers to products that come up in retail management systems as available, but are in fact unavailable, either misplaced, miscounted or simply hidden from view. Phantom inventory is a serious obstacle for retailers aiming to avoid overstocking while still ensuring that the right products are on the store shelf for their customers.
Scoring the Extra Point: Transactional Kiosks
Storeworks, a leading technology integration partner based in Eden Prairie, MN, was brought in by the country’s largest sporting goods retailer when this issue was identified as a costly problem. To address the issue, Storeworks designed and implemented a customer- and associate-facing transactional kiosk for alternative fulfillment opportunities.
To successfully design and implement the solution that would be the most effective for the sporting goods goliath, Storeworks first had to define the business case, determine the best technology to address the problem and collaborate with the company to tailor a solution that would map to the precise needs of the retailer.
Saving Every Customer
The first step before embarking on the custom design determination was for Storeworks’ agents to define the business case. This involved spending a significant amount of time in the retailer’s brick-and-mortar stores studying customer interactions, identifying and tracking product searches that failed to match with the inventory on hand.
The integrator was able to use the retailer’s online presence to uncover the fact that a significant number of lost or “walk away” customers could have been satisfied by turning to an alternative fulfillment method—one based on the retailer’s already existing eCommerce inventory, by accessing that inventory from within the physical store location.
“Our client needed to open their inventory and put the right mix of tools in place to provide customers with a sameness of inventory and pricing,” said Storeworks president Troy Stelzer.
Selecting the Winning Technology
After Storeworks technologists worked with the client to build a use case and functionality requirements list, it set about identifying which technologies would allow the retailer to deliver on its goals.
Given the use case and functionality requirements, it was clear that an Endless Aisle solution would be the best fit for solving the retailer’s problem. This solution includes an interactive touchscreen that serves as the missing in-store piece to the sporting goods company’s omnichannel puzzle, and enables the kiosk to close the sale when an item is out of stock in-store, rather than losing the customer at that point.
Smart Solution Development: Teamwork
To help determine the best design for the kiosk solution, Storeworks gathered valuable input by interviewing a cross-functional team from the company’s store operations, store interiors and IT department.
With the key capabilities identified and clearly defined requirements, Storeworks’ award-winning industrial designers began crafting an enclosure that would house the entire solution.
Endless Aisle FTW
Now, with the help of a retail associate, if a customer cannot find an item in the store, the solution allows them to purchase these items directly from the kiosk and have them shipped to their home (or other desired destination)—with order confirmation and receipts printed on the spot at the time of order.
“The ability to have your store’s entire inventory at your customers’ finger tips is the ultimate win-win,” says Stelzer. “Walk away customers are converted into revenue, and customers leave the store satisfied, all without having to increase your store footprint or inventory.”
ROI in Only Weeks
Storeworks’ Endless Aisle kiosk solution paid for itself in no time, generating enough gross margin to pay for the acquisition cost of the kiosk in just four weeks.
Extrapolated out, this represents $26 million in additional annual margin for the retailer, and one of the fastest ROI on projects in the company’s history.
IoT Retail Technology
Photo: Vengo Labs at NYU
While millennial buyers certainly love their online shopping, they are still buying goods the old-fashioned way—in stores and from vending machines. In fact, a recent report from Intel says that according to accounting firm EY, in the next three years online shopping will only account for 19 percent of transactions, and the majority of purchases will still be made in stores and via in-store kiosks.
One new company, Vengo Labs, based in Bethpage, NY, has given the in-store vending machine a lift, creating a new-age smart machine that defines 21st century automated retail. The company recently penned a deal with Blackstone LaunchPad, a campus-based entrepreneurship program with its sights set on automation for college campuses.
The deal introduced Vengo’s smart vending machines to the halls of New York University, Syracuse University, University of Southern California and University of Central Florida, among other schools. The machines offer tech accessories, personal care items, snacks and a variety of other products. But what is different from other vending solutions is that the Vengo machines include streaming video ads.
Amy Stursburg, executive director at Blackstone stated in a AdWeek report that “the campuses that will be exposed to Vengo will serve as a testing ground for future product expansion across campuses in the U.S. and beyond.” The company also intends to sell units to schools, hotels and gyms.
Each Vengo machine on campus carries up to six products and displays a variety of ads from companies such as Hershey, Kiehl’s and Think Jerky. The purpose of this vending technology is to provide an experience much like that of online shopping, where customers can browse options and read through detailed product information. But rather than waiting for the product to arrive, they receive it immediately, giving instant satisfaction.
Smart Inventory Tracking and Payments
The Vengo machines do not accept cash. Shoppers can pay via credit, debit, NFC/mobile and campus cards (Blackboard/CBORD). According to the company, this solution “leads to minimal vandalism, safer restocking and never having a machine eat anyone’s quarter.” All activity and refunds can be viewed and addressed remotely by the retail provider.
The machines connect to the Vengo Intelligence Platform (VIP) that tracks both sales and inventory levels, so the retailer will know the exact count inside the machine at all times. All machines with low inventory can be seen in a single view. The VIP will send email alerts when product cartridges are nearing empty or hit a customized threshold, giving the manager plenty of time to make sure the machines are not losing sales.
Photo: Vengo Labs
In a recent statement, Vengo Labs CEO Brian Shimmerlink explains some of the benefits of the Blackstone deal and the use of the machines on college campuses. “With the real-time analytics, we can provide services from simply monitoring customers' gestures and purchase behaviors to sharing a ton of learnings with other Blackstone LaunchPad members, to help them know what's working.”
Vengo Labs machines let operators monitor customer engagement, number of orders filled, product performance and other important metrics through a cloud-based dashboard, which provides them access to detailed consumer profiles, including names, locations and purchasing patterns. This data can be used to tailor each purchasing experience.
Making the Most of Vending Screen Space
For advertisers, Vengo machines have the potential to serve as a valuable asset. With the ability to reach new audiences, most notably millennials, through the digital screen mounted on each machine, they can purchase ad space and determine content based on location, demographic and other integral data. They’re able to receive real-time feedback focusing on performance and determine whether the ads are having any impact on the audience. The digital vending screens provide an eye-catching and appealing approach to grabbing consumers’ attention.
For retailers, product placement can vary depending on ownership of each unit. Whether their own products are displayed or they choose to stock those from a network of partners is up to them. According to an article in Retail TouchPoints, vending machines can drive up to 155,000 engagements per month and acquire 40 seconds per engagement.
Be a Smart Retail Provider
Under Armor and Reebok have used 3D-printing technology in the past to design a few components of a shoe, and for preliminary production stages such as footwear design and prototyping. Now, more than a dozen footwear companies are adopting 3D printing to create an entire shoe, from start to finish. The competition in the industry has many competitors, some of which are developing their own solutions and others that are turning to solution providers to get in the shoe-printing game. The goal for all of them is to utilize 3D printing to manufacture eye-catching, comfortable, personalized footwear.
One of the dynamic trends of 3D printing in the footwear industry is that each company has adopted its own unique type of 3D printing technology, using it at different stages of the design, prototyping and manufacturing stages. Based on the design engineering and 3D techniques put into action, prices for the customized finished products—which include shoes, insoles and sandals—differ significantly among the different shoe brands.
Some of the leaders in using 3D printing include established brands such as Reebok and HP (with its new FitStation platform), along with younger startup companies such as solution provider Jabil (working with Superfeet), SOLS and Feetz.
Reebok Robotics System Prints Outsoles
Reebok has developed its own Liquid Factory 3D printing technology to jumpstart a new process in shoe manufacturing. To construct its 3D printed shoes, Reebok designed a robotic manufacturing system capable of drawing polyurethane in a specific pattern that forms an outsole. Reebok’s Liquid Speed shoe line features a 3D-printed polyurethane outsole that wraps from the underside of the shoe to form the shoe’s lacing system.
Photo: Reebok Liquid Factory
According to a report in Engineering.com, Reebok plans to expand its 3D-printing work so it can produce these shoe components locally for its distributors, and eventually move away from the traditional shoe manufacturing system.
HP FitStation Taps MJF
HP has stepped into custom footwear with its HP FitStation. HP’s niche centers on creating customized footwear that is specifically tailored for each person’s foot dimensions and associated shoe needs. The HP FitStation is a hardware and software platform that creates a digital profile for each foot based on calculated foot pressure and determined gait analysis. Based on the digital profile, customers are able to purchase tailored shoes comprised of 3D-print insoles and footwear. For this process, HP uses its Multi Jet Fusion (MJF) 3D printing platform.
Photo: HP FitStation
“FitStation is a truly disruptive platform that will improves people’s lives and change the way people purchase footwear and shoe insoles,” says Louis Kim, Global Head of Immersive Computing, Personal Systems, HP Inc, in a statement. “We are reinventing the footwear shopping experience, bringing a new level of customization and personalization. We are stitching HP’s capabilities in 3D scanning and 3D printing to bring this blended reality vision to life.” He adds that HP is working with leading partners within the footwear industry to expand its FitStation platform.
Jabil Adds 3D to Superfeet
Solution providers are often called into play to help manufacturers design 3D printing systems. One such company, global manufacturing and design firm Jabil, has been adopting big data and design technologies, including 3D printing, to help its clients stay ahead on the game and operate with new business models. Founded in Michigan 50 years ago as a small company with a focus on automotive parts manufacturing, Jabil is now based in St. Petersburg, FL.
In the footwear industry, Jabil developed the process of making custom insoles for Superfeet. For that project, Jabil took advantage of digital prototyping capabilities with its 3D printers to produce 40 product prototypes in just four months.
SOLS Focuses on Custom Insoles
SOLS was one of the first companies to step into the manufacture of printed footwear. A startup company based in New York, SOLS creates individualized insoles based on pre-programmed algorithms that utilize photos of feet, with the help of a consumer’s smartphone application. Using information derived from the app, the nylon-based insoles are created by a 3D printer using selective laser sintering. The innovative technique led to the purchase of SOLS by Aetrex Worldwide in March 2017.
Feetz and Photogrammetry
Based in San Diego, Feetz is one of the most specialized companies in this field, producing shoes that are 100 percent 3D printed (most other companies only produce a portion of the shoe using a 3D printer). The size and custom fit of shoes produced by Feetz are based on photogrammetry, along with the use of a smartphone application. Feetz has developed its own version of Fused Filament Fabrication technology that uses Flexknit™ Polymer. The Feetz shoes are 3D printed to a buyer’s foot with 22 points of fit. The buyer can also choose the shoe’s color, style and logos.
Feetz is also one of the most sustainable footwear companies, as its shoes are printed out of recyclable materials and require zero water to produce, which reduces the company’s carbon footprint by 60 percent.
Get in Stride with 3D Printing
By using real-time sensor network that tracks goods continously within the store, retailers can make their operations smarter, alleviating inventory-based issues, and passing the benefits onto the customer.
Photo: Uniqlo UMood
The days of an Amazon drone or a self-driving robot from Starship Technologies delivering goods to a buyer’s doorstep are just around the corner. But how quickly the majority of shopping will move online is still up for debate. In fact, a recent report from Intel says that according to accounting firm EY, in the next three years online shopping will only account for 19 percent of transactions, the majority of purchases will still be made in brick and mortar shops.
This means that brick-and-mortar is here to stay, as least in the near term. But as brands close thousands of locations across the country, the retailers of the future are designing a new breed of store. The new generation of digital natives doesn’t want to browse dusty shelves in search of their purchases. The millennial shopper wants a smart store, one that caters to people accustomed to online shopping.
What does that mean for your retail customers? You now need to focus on the shopping experience, adding a dose of IoT and other technology to up the game. “Physical retail spaces need to focus on facilitating experiences that can’t be replicated in an online setting,” said Shepherd Laughlin, a trend forecaster at research group J. Walter Thompson Intelligence in a recent report on Intel.com “Otherwise, the convenience of online shopping will ultimately win out.”
The In-store Active Experience
Rachel Mushahwar, Intel’s general manager for retail, hospitality and consumer packaged goods, notes in the Intel report that “young shoppers want retailers to move from transaction to interaction.”
Some brands have already taken bold steps to attract millennials, such as introducing brainwave-reading devices to match customers to products. One innovator in this area is Japanese clothing store Uniqlo, who used technology originally developed for scientific research to pilot a unique in-store experience for its shoppers. The company built several UMood booths for its Australia stores, where shoppers could step in and see a series of t-shirts. Using artificial intelligence that can measure a reaction to a color or style, the UMood booth helps the buyer pick a shirt based on his or her emotional reaction to the product images.
The UMood technology, developed in collaboration with Melbourne University, uses a dose of neuroscience. The Uniqlo customer in the booth is fitted with a neuro-headset and shown a series of video stimuli, while their neurological responses (including stress, concentration and drowsiness) are analyzed in real time by a custom-built algorithm that identifies their current mood. According to the company, by analyzing the data the UMood booth “is able to recommend the perfect t-shirt” for each customer.
Automated Shopping Kiosks
Uniqlo didn’t stop with AI technology to enhance the shopping experience—it also came up with a 21st century vending machine, the Uniqlo To Go kiosk. Any retail manager knows that the two biggest costs for stores are real estate and labor. If a store can eliminate one and reduce the other, the results can be astounding. Having vending machines instead of—or in addition to—expensive storefronts can save thousands in payroll and move more product. Vending machines can operate 24/7, 365 days a year, making them an in-person rival to the convenience of online shopping.
Photo: Uniqlo To Go
Uniqlo intends to have 10 technology-enabled kiosks selling clothes in operation in airports and shopping malls in Oakland, New York, Houston and several major U.S. cities by the end of September. The six-feet-tall machines will be covered in the company’s logo and will sell staple items, including Uniqlo’s popular heat-retaining shirts and lightweight down jackets. The items will be packaged in boxes and cans, and the buyer can return them in a store or via the mail. The first Uniqlo To Go machine went live at the Oakland International Airport in early August.
Uniqlo isn’t alone in the kiosk concepts. Electronics retailer Best Buy now operates more than 200 Express™ Kiosks around the US, where it sells various electronic gadgets and accessories.
A Planet of Pizza Portals
As shoppers get comfortable snapping up goods from automated kiosks, several food retailers are taking a page from the retail playbook. Little Caesars is experimenting with “pizza portals” in its stores. Customers order and pay using a mobile app, which sends an alert to the user’s smartphone when the order is ready. At the shop, the customer punches in an order code to retrieve her order from an individual compartment in a pizza-warming oven.
Photo: Little Caesars
Panera has a similar system, where customers place orders in the app or at an in-store kiosk and then scoop up a bag with their name on it from a designated shelf.
Independent software developers are also pitching in new ideas for in-store retail transformation. One such company, Palo Alto, CA-based Curbside, has a service that allows shoppers to select items online or through a mobile app and pick them up at a retail location in less than an hour. Its partners include Boston Market, CVS Pharmacy, Levi’s, Pizza Hut and Sephora.
Creating Smart Stores
To learn more about the latest in-store IoT retail technology, read the Intel report, “Digital Natives Demand Smart Stores.”