Stores see fu­ture without ‘May I help you?’

The Charlotte Observer (Sunday) - - Business - BY SAPNA MAHESHWARI New York Times

The chief ex­ec­u­tive of Saks Fifth Av­enue’s par­ent com­pany said stores would even­tu­ally rec­og­nize cus­tomers as soon as they walked in. FedEx show­cased a ro­bot that it thinks could ul­ti­mately make same-day de­liv­er­ies on its own. The mall op­er­a­tor Mac­erich de­scribed the mov­able walls and fix­tures that it was us­ing to con­struct new stores for on­line-only brands.

Thou­sands of re­tail and tech­nol­ogy work­ers de­scended on Las Ve­gas last week for an an­nual in­dus­try gath­er­ing known as Shoptalk. There they shared the bets that they’re mak­ing on Amer­i­cans’ evolv­ing shop­ping habits and how they plan to main­tain rel­e­vance in an era that’s chang­ing faster than the spin of a roulette wheel.

The mes­sage came through loud and clear: Ex­pect more stores to in­cor­po­rate the kind of dig­i­tal data col­lec­tion that has pow­ered the on­line world.

Re­tail has been in a state of flux for years, an in­dus­try built on brick and mor­tar in a world now pop­u­lated by smart­phones and fea­tur­ing ever-quicker home de­liv­ery from the web. There is also in­creased com­pe­ti­tion from brands that have built their fol­low­ings through so­cial me­dia. And, of course, there’s that lit­tle com­pany called Ama­zon.

“You can’t out-Ama­zon Ama­zon,” said He­lena Foulkes, chief ex­ec­u­tive of Hud­son’s Bay, which owns Saks and Lord & Tay­lor. “We’re never go­ing to be the best pure-play re­tailer. What we have to do is marry dig­i­tal tools with our store ex­pe­ri­ence.”

Foulkes, who spoke at a con­fer­ence event held by Re­code, said she an­tic­i­pated that years from now, stores would be able to im­me­di­ately know cus­tomers’ iden­ti­ties and per­sonal pref­er­ences when they ar­rived, thanks to data col­lec­tion. That knowl­edge, she said, will be used to make their shop­ping ex­pe­ri­ences eas­ier.

“I think the world will evolve that way,” she said. “Peo­ple are al­ready play­ing around with those things.”

A pre­sen­ta­tion by FaceFirst demon­strated how re­tail­ers could use its fa­cial-recog­ni­tion tech­nol­ogy to en­gage with cus­tomers af­ter they walked into stores.

The com­pany’s chief ex­ec­u­tive, Peter Trepp, showed how stores could send au­to­matic text mes­sages to shop­pers and re­ceive their pro­files to as­sist them bet­ter. He showed an ex­am­ple of a pro­file, which con­tained a shop­per’s visit his­tory, the min­utes she spent in the store on her last trip, what she bought dur­ing that visit and the sum of her on­line pur­chases with the store’s chain.

In an email ex­change af­ter the con­fer­ence, Trepp em­pha­sized that the com­pany was fo­cused on the pri­vacy and se­cu­rity of cus­tomer data. He said that “most of what we’ve sold in the past is re­lated to loss pre­ven­tion and mit­i­gat­ing or­ga­nized re­tail crime,” mean­ing the tech­nol­ogy has been used to iden­tify sho­plifters and known crim­i­nals.

“How­ever,” Trepp said, “we see our busi­ness shift­ing to­ward pro­vid­ing so­lu­tions for im­prov­ing the cus­tomer ex­pe­ri­ence and be­lieve that opt-in so­lu­tions like these will be­come the largest part of our busi­ness in the fu­ture. We are work­ing with sev­eral large re­tail­ers on this to­day.”

The chal­lenge of gath­er­ing more in­for­ma­tion from stores – which lack the reams of cus­tomer data col­lected by re­tail­ers on­line – was fur­ther high­lighted in a pre­sen­ta­tion from Or­bital In­sight, a com­pany that uses satel­lite im­agery for a va­ri­ety of anal­y­sis, in­clud­ing counting cars in park­ing lots to help gauge traf­fic to re­tail chains.

James Craw­ford, the com­pany’s founder and chief ex­ec­u­tive, said that within the last year, the com­pany had added ge­olo­ca­tion data from cell­phones to its of­fer­ings. While the data is anony­mous, a unique num­ber is as­so­ci­ated with each phone so the com­pany can study traf­fic pat­terns within malls or other “trade ar­eas,” he said. Craw­ford said that while re­tail­ers knew the foot traf­fic in their own stores, they weren’t typ­i­cally aware of what was hap­pen­ing in front of their stores or else­where in a mall or com­mu­nity.

Or­bital In­sight can gather ge­olo­ca­tion data from 10 to 20 per­cent of phones in any mall, he said, with pings ev­ery 15 min­utes on av­er­age. The com­pany said in an email that it gath­ered in­for­ma­tion from ven­dors that draw data from “a com­bi­na­tion of safety, so­cial, fam­ily and weather apps,” and that it worked only with those that re­quired con­sent for lo­ca­tion ser­vices.

Kevin McKen­zie, chief dig­i­tal of­fi­cer of Mac­erich, de­scribed the com­pany’s re­cently in­tro­duced BrandBox con­cept, which pro­vides mall space for on­line re­tail­ers like flower-de­liv­ery ser­vice Ur­banStems, mat­tress seller Nec­tar Sleep and cos­met­ics com­pany Winky Lux.

The spa­ces of­fer flex­i­ble leases and a new au­di­ence for brands that may not have any ex­pe­ri­ence with phys­i­cal re­tail­ing. A store can some­times take six months to build out, but BrandBox can set up a store in as lit­tle as three weeks, McKen­zie said.

“We thought a lot about not just the walls but the fix­tures and all the dif­fer­ent ways they could be used and con­fig­ured,” he said. “It was ba­si­cally a big Tetris game.”

As the var­i­ous tech­no­log­i­cal ex­per­i­ments showed, Amer­ica’s old­est re­tail­ers are aware of how chal­leng­ing the re­tail land­scape re­mains.

When asked about her big­gest fear, Foulkes of Hud­son’s Bay said, “Our own in­abil­ity to move fast enough.” Erik Nord­strom, a co-pres­i­dent of his fam­ily’s chain, said that while the com­pany’s strate­gic choices and di­rec­tion had been right, “we need to be more ag­ile.”

And Art Peck, chief ex­ec­u­tive of Gap Inc., which just spun off its Old Navy brand, closed his pre­sen­ta­tion with three words that he said the com­pany’s founder, Don Fisher, used to say fre­quently: “Change or fail.”

Shoptalk via NYT

He­lena Foulkes, the chief ex­ec­u­tive of Hud­son’s Bay, which owns Saks Fifth Av­enue and Lord & Tay­lor, ad­dresses the au­di­ence at the an­nual Shoptalk con­fer­ence in March in Las Ve­gas.

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