​Google has pointed to a new YouTube phenomenon, called #comeshopwithme, where shoppers video their trip to a store.

Speaking at Shoptalk Europe, Ronan Harris, MD Google UK, played a video of a YouTuber called Mrs Meldrum and her experience of visiting a Primark store. The video had accrued nearly 18,000 views three days after publishing.

“It’s just normal people, sometimes influencers and creators, taking a trip to their normal store,” said Harris. “These types of videos are exploding all across the platform, normal people and their normal shopping experiences.”

Harris said he is seeing a number of retailers working with creators and influencers on YouTube to understand their shopping behaviour.

The video featuring Mrs Meldrum is 6 minutes 44 seconds long and sees her picking up all the clothes that catch her eye on a trip to Primark, creating a positive outlook of the retailer’s range. But equally the candid videos could highlight negative experiences of the in-store shopper journey.

While many may think this YouTube behaviour is slightly bizarre, it follows hot on the heels of the unboxing craze which has become popular over the last couple years, where customers film themselves unpacking technology products like smartphones and games consoles for the first time.

A number of leading UK retailers met as part of RBTE’s 2018 Advisory Board to talk openly about technology challenges impacting the industry today.

Retailers, including John Lewis, Asda, Liberty and Sainsbury’s, discussed the retail technology landscape with peers over breakfast at The Groucho Club in Central London.

Seamless shopping, AI, and people and processes were the hot topics of the day, while the group of 13 technology leaders agreed ‘customer experience’ is the latest buzzword.

“Customer experience is retailing,” said one attendee, who was speaking under the Chatham House Rule.

RBTE event director, Matt Bradley, described the importance of the advisory board of leading industry experts as “an event driven by the industry, for the industry”.

He said: “To ensure RBTE remains relevant to the industry and its needs, we seek advice, support and guidance from many of the biggest names and brightest minds in retail, hospitality and leisure. This is the largest RBTE advisory board ever assembled, demonstrating key retailers own commitment to the importance and benefit that RBTE brings to the industry."

RBTE’s Advisory Board was created to learn the latest challenges impacting the industry to help shape 2018’s event, which will take place on May 2-3. The full board includes:

Adam Bialy, head of payment technology | senior product owner, Sainsbury's    

Charles de Clerck, business engagement manager | marketing & ecommerce, Waitrose  

Chris Griffiths, director of change delivery, House of Fraser          

Dan Orteu, COO/CTO, Anya Hindmarch 

Dave Abbott, retail omnichannel manager, Dune

David Cabreza, director international distribution, Hilton Hotels

Don Marshall, multichannel director, Perceive

Fabrice Khullar, head of product | online & omnichannel, Sainsbury's

Jamie Korda, retail enterprise architect & innovation manager, Asda        

Jason Cook, head of IT, Neal's Yard

Karen Harris, managing director, Intu Digital

Kash Ghedia, head of technology, Dixons Carphone

Madeleine Melson, chief customer officer, Amara Living Ltd        

Marcel Borlin, CTO, Carpetright

Mark Lewis, head of change & portfolio, John Lewis        

Martin Alden, head of commercial development, Wyevale Garden Centres           

Martin Draper, technology director, Liberty         

Nik Drew, programme manager, SuperGroup     

Richard Jenkins, head of RFID programme, Marks & Spencer

Tao Tao, business development director, Alipay

For more information on the RBTE Retail Advisory Board, click here. 

Advertising and media specialists WARC and accountancy firm Moore Stephens estimate the US and UK martech industry is worth $34.3 billion a year. Their research also found brands are now spending 16% of their marketing budgets on martech and this figure is expected to rise further.  

Adtech is a relatively established term within marketing circles, whereas martech is more of a fledgling umbrella term for new technologies impacting on the marketing space.  

Amy Rodgers, research editor at WARC, says there is a “lot of debate” around the difference between adtech and martech.

“At the simplest level, I see adtech as a subcategory of martech that focuses just on technologies for the management of advertising, whereas martech encompasses a whole swathe of technologies across the broader marketing discipline,” says Rodgers.

Such marketing technologies include tools for managing email, the most common type of martech, alongside tools for social media, CRM, and optimisation and collaboration tools.

The latter set of tools are expected to rise in popularity significantly within the next year. Artificial intelligence firm Sentient is one such company that is providing optimisation tools for retailers.

Sentient’s Ascend tool, which allows marketers to use AI to test unlimited website layout changes, helped US-based lingerie firm Cosabella increase conversion rates by 35% in one month.

Guido Campello, chief executive and creative director at Cosabella, says the success of the Ascend technology has meant the retailer is looking to invest in other marketing technologies.

“After the success of Sentient we’ve become much more aggressive in searching for, and evaluating, cutting-edge technologies that could let us stay ahead in a very competitive marketplace,” says Campello. “Currently we’re focused on customer relationship and personalised shopping experiences; but rather than make decisions based on what segments a customer might be in we want to target the individual to give the very best experience possible.”

Sentient was founded a decade ago but only in the last couple of years has it entered the martech space after spotting the commercial opportunities available.

Jon Epstein, chief marketing officer at Sentient, says the company’s AI-based tools were used for stock trading and optimising food production, and were adapted to martech when the firm saw the “real gap between what retailers were trying to achieve in terms of getting to better user experiences and higher conversion rates and the solutions available”.

Martech for email

The power of martech can be seen in email, its most common area of use. Research from martech provider Adestra and research firm Econsultancy found email drove an estimated £29 billion in online retail sales last year in the UK alone.

Adestra’s technology uses historic and predicted shopping behaviour to personalise emails, and Adestra claims the implementation of the tech by pet product retailer Pets Pyjamas resulted in a 1000% increase in revenue per email.

Henry Smith, managing director at Adestra, believes martech “is a huge growth sector both in terms of the investment brands are making into it, but also the growth in the sheer number of martech providers out there in the marketplace.”

A complicated landscape

The return on investment for some martech can be massive but the difficulty lies in finding the right solution to suit the client’s needs.

“Martech has offered a lot of value and new ways of doing things for retailers but at the same time it has made the world of the marketer much more complicated,” says Epstein. “There are too many systems, too much data, too many dashboards, it is very hard to ultimately make sense of all this data.”

Rodgers adds that one of the biggest barriers to increased uptake of martech was a “lack of understanding of the technology available”.

“A second reason is cost,” adds Rodgers. “These technologies can come with a hefty price tag, and part of the job of marketing teams now is to decide which of the long list of tech they ‘need’ should be given budget priority above the rest.”

Rodgers believes the question of whether there has been an underinvestment in martech until now is a difficult one to answer.

“There are big claims by tech vendors as to the gains from using their technologies, but for emerging media channels there isn’t yet a wealth of solid cases for effectiveness, particularly in the long term,” says Rodgers. “Despite uncertainty existing, and issues of transparency, viewability and ad fraud very much front of mind, the level of investment is significant and growing.”

Early results indicate martech can yield a very impressive ROI and in an ever more competitive environment retailers are exploring all avenues to give them the edge.

Martech offers much potential and while that is the case the sector can expect heavy investment from retail.

Cybersecurity for e-tailers is now a c-suite level issue with the number of data breaches reported to the ICO almost doubling in the last year. eCommerce has become a particular target for attacks due to the vast quantities and nature of data involved, such as card details and contact details. UK retailers including Cex, Sports Direct, Debenhams and British Airways have all been subject to some of the highest profile online data breaches in the last two years. Breaches in the US are just as prevalent with over 70 million Target customers having their personal information hacked.

Aside from the reputation issues and loss of consumer trust that face e-tailers who are the subject of a security breach, an out of the blue cyber-attack could also result in hefty fines if:

a) The security breach is not promptly notified to the regulator and/or data subject;

b) The organisation’s operational and technical security measures are found wanting by the regulator; and/or

c) The organisation does not keep appropriate records of the breach and what was done to address the breach.

The level of fines will substantially increase once the GDPR comes into force where fines for breach of an organisation’s security obligations can be anywhere up to €20 million or 4% of global turnover.

For this reason, it is vital that e-tailers start putting in place measures now to deal with potential cybersecurity threats in future. We set out a few tips to help below.

Putting in place data breach protocols

Under the GDPR, organisations will be subject to mandatory 72-hour reporting obligation in the event of a data breach unless the data breach is unlikely to involve a high risk to the rights and freedoms of a natural person. This can be difficult to ascertain at the time of discovery and where in doubt, organisations should report the actual or suspected breach to the regulator. The time frame of 72 hours from becoming aware is tight but organisations will be penalised for failing to promptly notify. Therefore, it is imperative that an organisation ensures that its data breach and reporting policies are implemented and/or updated to ensure there is a set procedure on what to do if a data breach happens and how to log it.

Where a data breach involves a high risk to the rights and freedoms of a natural person, the data subject may also need to be informed which means organisations should have a PR person on hand to assist it in those communications to minimise any further reputational damage.

Finally, it is not just notifications to the regulator and/or data subject that organisations need to worry about. All organisations should as a first step on becoming aware of an actual or suspected data breach notify the organisation’s relevant insurers of the breach. For that reason, we recommend that details of the insurers are included in any data breach protocol.

Know your data

One way to be prepared for, and importantly protect against, any data breach is for organisations to keep accurate data inventories. By knowing where data is kept and who has access to it, it is easier for organisations to protect such data.  Knowing where data is and who has access to it will also make it easier to identify the source of any security breach as well as hopefully alert the organisation to a security breach in the first place. Such knowledge will also mean organisations are more likely to be on the front foot instead of the back foot in the event of a security breach which should hopefully minimise fines and further reputational damage. Just think of the reputational damage suffered by Yahoo when it discovered 1 billion accounts had been compromised three years after the event….

Keep your technical and organisational measures under constant review

Having appropriate technical and organisational measures in place to protect against unlawful processing of personal data is a requirement under existing data protection law. This requirement will be expanded under the GDPR which actually sets out examples of various measures that organisations may take such as encryption or pseudonymisation. However, it is not enough to simply put these measures in place. An organisation needs to keep these measures (whether physical or technical) under constant review and put in place policies and procedures to ensure any vulnerability in the measures is promptly identified and dealt with effectively. This may include carrying out regular software updates, having a robust governance regime in place with third party IT security providers and setting up regular internal security meetings with individuals of different levels of seniority within the organisation attending to ensure all security issues are uncovered and dealt with effectively.

Personnel Training

Statistics shows that a large proportion of cyber breaches arise from human factors such as inadequate training or human error. Organisations should therefore ensure that all personnel are made aware of, and receive appropriate training in respect of, the various security threats to data and the measures taken by the organisation to protect data against such threats. For example, all personnel should be trained to spot a phishing email. Personnel should also be trained on what to do in the event of a security breach as a security breach is likely to affect all areas of the business. Such training should also not be a one off – instead it should be carried out at regular intervals (in line with any updates to the security measures in place) to ensure that personnel do not become blasé. 

Bryony Long is a senior associate at law firm, Lewis Silkin.

European eyewear e-tailer, Ace & Tate, made the move into physical retailing after trialling several pop-ups in Germany and Rotterdam. Since launching its first store in Amsterdam in 2015, it now has 17 stores across Europe in the Netherlands, Belgium and the Nordics.

Koen Bremer, COO at Ace & Tate, said he thought moving into physical retailing would be a marketing initiative, but he said it has become clear it is a customer acquisition channel.

Speaking at Shop Talk Europe, Bremer said 80% of in-store customers are completely new to the Ace & Tate brand. And these new customers then go online to buy their second, third or fourth pair of frames.

“It builds trust in your brand, it’s a physical location people can go and touch and be in touch with the people in store,” he added.

Bremer said physical retailing is part of its strategy to determine new markets. “We work the presence online, decide on a 2-6 month pop-up and then make the case for a new store.”

Bremer also explained how beginning life as an eCommerce company has helped the brand create its physical stores.

“Starting as an online company allowed us to have the backbone to put into our stores – order management and logistics is all shared with online, so it’s easy to give one shared customer experience.”

Ace & Tate customers are also asked to identify themselves when buying a pair of frames in-store, either by logging into their online account or signing up. “We can track customer behaviour through the stores with the data capabilities bought [from online].”

Asos has reported a 33% rise in full-year sales to £1.92 billion. Pre-tax earnings were up 145% to £80 million in the 12 months to 31st August, on the back of a weak pound and a strong international performance.

CEO, Nick Beighton, was in understandably bullish mood as he hailed “another exceptional year” for the online fast-fashion retailer. Group revenues were up 33% and retail sales 34%, driven by strong product, price and proposition improvements.

“The UK was solid at 16% growth in a very competitive market and we had significant international sales growth,” he said. “We finished the year with a strong cash position of around £160 million. All our KPIs are moving in the right direction. We have record active customers, up 24% to just over 15 million. We’ve seen strong growth in average basket value, order frequency and conversion rates, and we’ve shipped just under 50 million orders, which is up 34% year-on-year.”

Whilst UK performance was good compared to many of its competitors, there was also a slowdown from the previous year. “Mathematically it’s a bigger number each year,” Beighton countered. “I do think 20-somethings are facing economic challenges. Everything that they consume will have a greater level of inflation on it than ever before, so their disposal income will have a few more challenges around it. But they will still be interested in having the right outfit at the right price and we’re expecting FY2018 growth to not be less than 16% in the UK. The first six weeks of the year have started well for us, and I’m pretty happy with that.”

International expansion

He added that Asos is positioning itself as a global company; less than 40% of its business is now UK-based and international has grown just shy of 50% over the course of the year. “In terms of the main growth over the next 12 months, I’m expecting this will be within our key market of the EU and the US, which is where the majority of our investment is going.”

A major part of this is an agreement is to establish a new $40 million, 10 million unit capacity, North American eCommerce fulfilment centre in Union City, outside of Atlanta, Georgia. Fit out commenced recently and the facility is expected to be operational by autumn 2018, providing more cost-effective, faster and more flexible delivery options. The company currently relies on a small warehouse in the country which manages around 25% of all Stateside orders, with the remainder being dispatched from the UK.

Also key here is the transition to the Berlin-based Eurohub 2, which measures 44,000 sq m, with the potential to expand to 90,000 sq m. The project is progressing well, with phase one complete. “We are looking at contingency planning to see whether that will become more beneficial to us in the event of Brexit and falling out of the Customs Union,” explained Beighton.

Asos is exploring the possibility of moving away from Barnsley in the UK as the main hub that distributes to the world, to Eurohub becoming the main hub that distributes back to the UK.

A potential downside here is a backlog at European ports if the UK doesn’t get a customs arrangement with the EU, although ASOS says that this isn’t on its radar right now. “Clearly, though, anything that interrupts the flow of goods won’t be great news.”

Technology, technology, technology

Asos has, meanwhile, been investing heavily in infrastructure. Within technology and logistics, all major investments are going to plan. “In technology, we’ve executed over 1,300 improvements in the customer journey over the course of the year. In terms of delivery solutions, there have been 200 improvements.”

This includes the roll-out of Asos Instant – a same day delivery option for its London customers which is now available on orders placed before 10am, Sunday - Friday. It will cost £12.95 and parcels will be delivered between 6 - 10pm.

As the service is less than a week old, Beighton declined to give any user stats, but he did reveal that plans are afoot to take it to other major cities around the UK, with a greater proximity to Barnsley, in the coming months. The £12.95 price tag has raised eyebrows, given the Asos mission statement of truly resonating with the people who use it, because it's built by them.

“What I would say is that, if you’ve turned up to work without an outfit for that dinner party tonight, you can have it same day and sometimes that might be worth the price. Every time we grow our volume, it gives us the ability to lower prices and that’s how we’ve done every delivery service. The more volume goes through it, the cheaper we can make it.”

The Eurohub could also provide the opportunity to bring Asos Instant to some German cities. “But that isn’t a definite, it is just part of our thinking.”

Visual search and augmented reality

Asos has also been circling visual search, facial and body augmented reality and the early results have been “very encouraging”. In a nutshell, its agile technology platform is allowing it to accelerate its pace of innovation, paving the way for the likes of new payment methods and additional language sites. “The investments we are making will see us add 1,000 new heads and will lay the foundations for a c.60% increase in unit capacity and c.£4 billion of net sales. The potential for our company remains huge,” said Beighton.

As competition from multi-channel operators and pureplays continues to intensify, and Brexit uncertainty bites, the road ahead won’t be easy, but Beighton remains confident, “we are positioning Asos to be the world’s number one destination for fashion loving 20-somethings.”

The customer is king. But keeping up with them is no easy task and their shopping habits have changed rapidly over the past few years.

Consumers want more choice, freedom to shop when they want and how, as well as instant and comprehensive information, such as environmental impact and where the product has come from. 

This has a bearing on suppliers and retailers as they need to continually respond to their customer’s wants and needs. But they’re being hampered in this relentless drive to meet customers’ expectations by something relatively simple – poor product data.

For many years the grocery sector has had a problem in this area and as an ex-retailer, I’m only all too aware of the problems.

It is estimated 80% of product data is inconsistent, it’s often inaccurate or incomplete, and multiple versions of the same data can create even bigger issues for retailers, brands and customers.

Then there’s the ever-growing number of required product attributes, which could easily hit 250 within the next five years, and as more shopping channels open, brands are having to deal with more trading partners requiring more data in different formats.

This waste of valuable resources is hurting the grocery industry by £200 million in costs and lost sales each year and impacts the speed and efficiency of moving products through the supply chain too.

But what can be done to solve this important issue?

The solution has been achieved in some countries already, such as the Netherlands and Australia, and using these countries as inspiration, GS1 UK has brought together the grocery industry to achieve a cross-industry approach to sharing and managing product data – Digital DNA.

Driven by our Retail Grocery Advisory Board, Digital DNA is a transformational programme where retailers and suppliers will access a single product data catalogue for the grocery sector. Suppliers will input data into a harmonised data model and retailers will then take out data when it suits them and in a way that suits them.

And the benefits of a single product data catalogue are extensive.

Digital DNA will introduce uniformity to product data as there will be one way of introducing new products, one way of making changes to products, one language to describe products and one view of data across the industry.

To continue the uniformity theme, Digital DNA will introduce a common language for high-quality, validated data that has been agreed by the industry, built on GS1 industry standards.

Businesses will therefore no longer need to make constant checks as a single source of image, product and logistics data will be used throughout the supply chain. This will give retailers greater confidence and so fewer samples will need to be sent from suppliers and reduce the number of checks.

Data will be independently quality assessed to ensure confidence and will be royalty-free as it will be owned by the suppliers.

Digital DNA will provide value as it’s been designed to avoid data being locked-in to one vendor and the data usage rights will be agreed jointly by the industry, so no-one will be trapped by other organisation’s commercial agendas.

The governance and funding is also being managed jointly by the industry, ensuring a fair deal for companies of all sizes, while GS1 UK will manage the product data catalogue and we’re not-for-profit.

But what does the consumer get out of a single product data catalogue? With complete and accurate information, Digital DNA will enable consumers to make safe and confident purchasing decisions online or in store that can complement their health and wellbeing or lifestyle choices.

We’re planning to launch the full service in April 2018 and already there have been some early successes.

12 leading retailers and brands, including Tesco, Unilever and Waitrose, have signed up to the Digital DNA Industry Charter making a commitment to move to a single industry solution to manage and exchange product data.

We have also convened an ‘Early Movers Group’, where leading retailers and SMEs are collaborating with selected technology providers on an end-to-end pilot programme.

And it’s not just the grocery sector that will benefit as it is perfectly plausible that a similar model could be implemented for other industries across retail ensuring that they also can have a single and unified product data catalogue.

Essentially, Digital DNA is a game changer for the grocery sector and through better management of product data, retailers and brands can spend more time on what really matters – delivering innovation, growth and excellent customer service.

For more information on the Digital DNA programme, click here or email jim.dickson@gs1uk.org  

Esso is rolling out its mobile payments app across the UK, allowing users to pay for fuel at the pump and collect Tesco Clubcard points in the process.

Some 70 Esso-branded service stations are now accepting the new payment method, which is available on iOS and Android platforms. Each week, additional sites will be added to the network of locations offering the service.

Users of the technology can drive up to an Esso fuel pump, open the smartphone app from their vehicle, select the pump number and authorise payment, before filling up their fuel tanks. When the customer puts the nozzle back on the pump, the app confirms the amount paid and automatically emails them a digital receipt.

Using cloud-based technology, Esso’s system promises quick and secure transactions that are easy to authorise. Customers who register their Tesco Clubcard on the app will be automatically credited with loyalty scheme points for their purchase at participating sites.

Christopher Smith, mobile payment and loyalty manager for Esso, commented: “Esso is committed to providing our customers with the best possible experience at our stations, and the app has been designed to save time as you don’t need to queue to pay, yet you can still accumulate Clubcard points.”

Esso is offering additional incentives to use the app, allowing customers to earn 400 bonus Clubcard points – half of those after their first mobile app payment of at least 30 litres and the remainder after their fifth transaction of the same level.

Users of the app have access to a ‘Fuel Finder’ function which allows them to identify nearby Esso sites offering the mobile payment capability, and receive driving directions to those locations.

There have been various retail technology innovations announced by fuel brands in recent months, with Shell piloting its ‘fuel-to-you’ offer, called ‘Tap Up’. The service allows the company’s mobile app customers to request Shell to travel to them to fuel their car.

First tested in the Netherlands, the service also offers potential options to add a bag of groceries to the order, and there are plans to roll out the platform globally.

You only need to glance at a handful of articles to recognise how many different views exist on how IoT will develop. These range from competing projections on the speed of IoT development; from how many devices and when, to scale – who stands to gain most. For example, projections around the number of connected devices vary wildly from 28 billion by 2021 to 100 billion by 2025, with countless estimates in between. Clearly, not all projections can be right.

The outcomes of IGD’s research reveals that the journey to these many billions of connected devices has been a long time in the making. Indeed, 37% of food and grocery companies are already trialling or have successfully deployed IoT products or services, with a further 58% planning to increase their use of technology providers to help them embrace IoT opportunities.

Rather than setting out to produce a figure to compare or compete with existing projections in this area, IGD’s research instead focuses on understanding the factors that will further influence the development of IoT. This means moving beyond the hype and buzz phrases and into everyday reality to understand how IoT will embed itself into our lives. The value IoT can deliver is intrinsically linked to scale, meaning that IoT’s transformation potential inevitably increases the more we embrace it. But to do so, we must see the value.

IGD’s predictions are organised according to who they relate as well as their role in the bigger IoT development picture. Practically, this means creating a matrix based on consumer, supply chain or wider business impacts, cross-referenced with whether the hypothesis relies on or serves to create connections, disrupt existing ways of working, or help businesses find new, innovative ways of doing things.

The nine predictions are:

1. IoT will increase opportunities for product and service personalisation, and help fuel growing expectations in this area. Greater personalisation could boost sales but does present supply chains with challenges around fragmentation and lower economies of scale.
2. IoT will even up supply chains by increasing visibility, and this means companies will collaborate more as opportunities surface. IoT holds the potential for breaking down the information silos by creating connections and transparency throughout the end-to-end chain.
3. Companies will increasingly turn to service providers with expertise in technology and analytics to help them realise the opportunity. Using providers can reduce capital investment, pool expertise, keep businesses agile, and foster competition and innovation in the market.
4. Privacy concerns with sharing personal data won’t be a major barrier as people have become accustomed to sharing this, provided they see the benefits. The internet and social media have already set a precedent that provides lessons for IoT – companies must convince users they are trustworthy, with the security of their data as well as in their intentions with it.
5. Forecasting will be constructed from individual consumer demand by responding to and shaping real-time events with direct visibility of impact. IoT will radically change the traditional business approach to forecasting by bringing businesses more accurate data to work with from live consumer feedback using product sensors.
6. New business models will become dominant, based around services, subscriptions and crowdsourcing, accelerating radical restructuring in the industry. IoT helps catalyse this shift, acting as a foothold to services created by the production of new connections, consumer-level visibility and personalised engagement.
7. Consumers won’t directly pay more for existing products to be Internet of Things enabled – technology companies and retailers will need to find other ways to create value for themselves from the data generated. Creating value will lie in offering customers additional services around their product while demonstrating the internal efficiencies delivered through the insight generated.
8. IoT will accelerate automation and AI, driving efficiencies and changing the capabilities and resources needed in supply chains but risking an increase in vulnerability to system failures or hacking. IoT provides the “eyes and ears” for many other transformational technologies that will be able to leverage the wealth of information automatically acquired.
9. There won’t be a “game-changing” IoT innovation, but an accumulation of applications will steadily increase take-up until its ubiquity results in transformational change. The more enabled devices there are in the market, the more increasingly powerful IoT will become. Standards or interfaces will be crucial to promote collaboration and prevent companies being “locked” into distinct IoT eco-systems.

The research has been supplemented by an additional report, which investigates case studies and proposes future uses based on research findings. Broadly, these can be categorised as the way the supply chain may benefit from IoT development by:

1. Utilising connections to be more efficient, make smarter decisions or link discrete devices
2. Utilising connections to collect data from consumers or to provide them with potentially useful information

Examples include a device being developed by The Swiss Federal Laboratories for Materials Science and Technology (EMPA) that “looks like a piece of fruit and acts like a piece of fruit – but is actually a spy.” , which measures the temperature of freight containers. While it’s currently common for freight containers transporting produce to measure air temperature, it is the core temperature of the individual fruit and the ability of the carrier to maintain it that is crucial for maintaining quality. The non-invasive “sensor fruit” simulates the composition of relevant fruit and gathers data on temperature over the transportation period. While not yet capable of transmitting data wirelessly, this is the logical next step.

There are numerous benefits to using such a device. Retailers and consumers could benefit from fresher produce, detailed information about how goods are being transported and lower product wastage. There are other benefits too where the broader value that IoT offers becomes apparent. In fact, the solution has been developed primarily for insurance purposes, enabling buyers to understand where an issue has occurred in a product’s journey. This information can be used to inform future decisions around trading partners or to support a claim.

Above all, IGD’s research confirms that a new age of retailing is emerging – a digital, connected and personalised age, shaped by technology and the consumer. An IoT-enabled food and grocery supply chain helps bring this about through live, precise, consumer and product level insight enabling efficient, responsive solutions that meet needs and create value throughout the chain.

The reports are available to Supply Chain Analysis subscribers here.

An abridged copy of the report is available for free here.

Founder and CEO of Rodial skincare and make-up, Maria Hatzistefanis, recently told an audience of retail professionals that her global company wants all of its customers to feel that they have that one-to-one relationship with the brand.

Whether shoppers are online or in one of the 2,000 beauty boutiques or department stores where the Rodial range appears, Hatzistefanis is keen to personalise interactions as much as possible.

Talking at a recent event hosted by eCommerce platform Kooomo in central London, she explained how the company has boosted sales by customising emails, newsletters and homepages to customers that have purchased from its ranges before.

“We are using personalisation to segment our VIP list and reach the top 500 customers that spend above a certain level,” she added.

“We’re customising the homepage to have them see the more expensive products. We’ve seen a huge increase in open rates and click-throughs. It’s all about personalisation and customisation that works for us.”

Beauty apps

Hatzistefanis views this style of personalisation as more effective that using augmented reality mobile apps, which seem to be emerging from the beauty industry far more than any other sector.

L’Oreal, Estée Lauder and Rimmel are among the brands that have experimented with these functions on their websites and apps.

Talking after the Kooomo event, she explained: “I do believe in personalisation when it comes to understanding customers’ skin problems or make-up challenges and developing a plan that is personalised to them and something they see when they open the website.

“I have seen apps out there but a lot of them haven’t gained enough traction to actually be able to survive. There are a lot of gimmicks out there that the customer would maybe check once or twice but never go back.”

Rodial had an app that was used in its counter and beauty area at Harvey Nichols in London’s Knightsbridge – the destination considered to be the brand’s flagship ‘store’. People could take a picture of themselves and the app would personalise the products they used for their makeover.

Later, they would receive an email with a picture that highlighted where on their face they should apply the product, as well as recommendations about other products.

“We found it was hard to get the salespeople to prioritise getting the app up to speed. They would much rather focus on the makeover, the personal connection and making the sale… so we decided to drop it.”

Social media

An area where Rodial has experienced success recently is on social media. Hatzistefanis, who founded the brand in 1999 and has overseen its growth to 35 countries, said that revenues from social media have tripled over the last year thanks to the launch of Instagram Stories in August 2016.

The social media channel allows retailers and brands to promote products and special events, and it also comes with a sophisticated advertising platform tool that includes analytics for measuring success of campaigns.

“Years ago there were some super-complicated third-party service providers that you had to go through,” noted Hatzistefanis.

“Instagram would be linked to a website which would forward the link to your own website. The introduction of Instagram Stories where you can actually have a link directly leading to your website and a specific product has cut out the need for third-party operators.”

Instagram is where most of Rodial’s social media efforts go because the CEO sees her company as a very visual brand.

“I find that Instagram is the perfect platform just because we have those visual assets and we communicate to our customers with visuals,” said Hatzistefanis, adding that appearing on Instagram Stories has helped drive impulse buys.

Influencers

Rodial’s presence on Instagram is part of a wider social media focus that includes using influencers in different countries to help spread the brand’s message. Depending on the size of the target country, the beauty company will either deploy one of its own team to identify the most suitable beauty influencers, or employ a third-party agency to build those relationships on its behalf.

Influencer marketing is viewed by Rodial as a key part of entering a new region. Hatzistefanis said: “Before we even think about the platform, we need to create demand in every market. We identify markets we want to grow and look for influencers in every market.”

The company is looking to expand its presence in Asia at present, using Hong Kong as a central hub from which to build the brand in that part of the world.

Innovation

Rodial grew its sales by 20% last year, and the same jump in sales is expected for the current financial year. Last year’s group revenues were approximately £20 million, helped by continuing key wholesale partnerships with the likes of Harvey Nichols, Space NK, John Lewis and Selfridges.

Its 150-strong staff base are continually looking for the next big innovation, it seems, with Hatzistefanis currently keen to improve the product sampling process. As reported in Essential Retail, it’s an area of the beauty industry that is ripe for change.

She said: “There are all sorts of ways to sample through the website but we are looking at ways of automating the sampling process and coming up with a technology that helps us quickly identify the needs of our customers before putting together a personalised pack of samples to send them.

“Finding a way of being more efficient and personalised with sampling is something we are looking at right now.”

Many online and wholesale-only brands have been opening up their own stores in recent years, but there are no imminent plans for any Rodial standalone stores. However, Hatzistefanis acknowledges there could be benefits of opening a physical presence.

“It’s one of those things that always circles in my mind, and I think how amazing it would be to have a home where I can showcase the product in the best possible way,” she remarked.

“But then I’m always considering the challenges that retailers face right now with a lot of people moving to purchasing everything online. Maybe one day it will happen.”

Can human roles in retail survive the relentless march of the robots? Retail has enjoyed enormous benefits from technology tools over the decades, but has the time come when technology poses a threat to jobs? Here we present two possible scenarios for retail 2020-2025: one where automation eliminates the majority of retail jobs and a second which sees the emergence of new paid roles in retail.

Scenario one: Robo-retail rules

By 2020, retail robots guide customers and bring goods to the checkout, or your car. Artificial intelligence (AI) personal assistants like Siri and Alexa have become personal shoppers and allow retail algorithms to recommend the perfect item before shoppers even know they want it. The algorithms offer recommendations drawing on vast databases of consumer preferences – with our AI assistants providing our profiles to filter and select the appropriate offers.

By 2022 most customers prefer to shop online – even if they still browse in-store. Mobile and pop-up digital stores and malls display selected items as touchable and sniffable holograms. Wealthier customers can book a personal visit by an autonomous vehicle, robot or drone which can then perform the holographic display in the comfort of home, giving birth to the next wave of home shopping parties. TV and retail are fully integrated - the majority of films and TV shows offer the ability to click on an item in the show and then make an instant purchase. In all these formats, shoppers ‘click to buy’ virtual items, which are shipped instantly by autonomous vehicle or drone.

By 2025 brick-and-mortar stores that continue to attract customers do so with high-tech in-store experiential services. In-store 3D/4D printing and spray-on manufacture of items to your design and produced to fit your schedule are commonplace. Experiences include multi-sensory immersive fashion displays, mirrors showing customers wearing an item of clothing under different lighting, in different colours and sizes and robot tailors making custom clothes while you wait.

Scenario two: Humanity at a price

By 2020, retailers use AI to determine who typically shops and when, and change displays so that eye-catching items are offered to relevant customers at the perfect times. In-store robots and drones could continuously change displays, alleviating the repetitive, physically exhausting work of retail jobs. Employees would therefore be more relaxed, thus placing more attention on the customer. Local stores might use AI apps to track the preferences of their customers, make recommendations, and deliver items at the perfect time. This is the edge by which small brick-and-mortar shops are able to compete with online retailers and bigger chains.

By 2022, people are willing to pay a premium to access a live purchasing advisor. This exclusivity leads to super elite retail boutiques where shoppers connect with fashion bloggers and social media artists. Customer service is anything but free, but well worth the cost. Creativity, self-expression and individuality are major retail offerings. In this future, services and guides become increasingly important in the cultivation of satisfying consumer experiences, especially in destination shopping centres and malls, keeping retail jobs in demand.

By 2025 automation’s impact may support retail growth: products could become so cheap – thanks to extremely low-cost, highly-productive robotic labour – that the value comes in the form of an evolved ‘personal shopper’. Automation and robotics would support the actual purchase and delivery, but a personal shopper provides emotional support and companionship on the shopping experience. In a future where the majority of people are involved in online schooling and remote working, this personal shopper service could meet cravings for personal contact.

Two retail futures

There is little debate that robots will take jobs – hence both scenarios assume that the future leads to the automation of current retail roles. Companies must avoid the temptation to plug in technology fixes where human solutions are needed, and this is especially true for retail. The value of a good, authentic conversational style or a sense of humour is something that even today puts certain retail workers at an advantage. Public-facing jobs are a test of social skills, which seem to be safely in the domain of people, not robots, for now.

The authors are futurists with Fast Future who specialise in studying and advising on the impacts of emerging change. Fast Future also publishes books from future thinkers around the world exploring how developments such as AI, robotics and disruptive thinking could impact individuals, society and business and create new trillion-dollar sectors. Fast Future has a particular focus on ensuring these advances are harnessed to unleash individual potential and enable a very human future. See: www.fastfuture.com  @fastfuture

For a corporation as huge as Unilever - the firm has 400 brands and turned over €52.7 billion last year - it’s hard to imagine more customer reviews of its mayonnaise or cotton bud products making a huge difference to its bottom line. (In fact, its hard to imagine many people being bothered to write reviews of Hellmann’s or Q-tips in the first place - or researching them before making a purchase).

After all, buying a jar of Hellmann’s isn’t like buying a house. No one spends hours trawling review websites and forums, endlessly vacillating between Hellmann’s or Heinz,  speed dialling their other half in the supermarket aisle in an agony of indecision ("Darling, I simply cannot work out which choice is best for our family").

Nevertheless, the company enlisted Bazaarvoice’s reviews platform to collect consumer-generated content (CGC) in 2013, and in the process claims its seen a significant increase in customers wanting to buy its items in-store or online.

Jenna Spivak Evans, innovation and digital capabilities manager at Unilever, said:  “Reviews instil a lot of trust among consumers and give them the confidence to make a purchase. And we’ve seen that there’s a positive correlation between review volume and number of orders.”

In order to get people reviewing its mayo, Hellmann’s asks for feedback in its email banners; while Q-tips homepage features a rotating banner ad; and Dove for Men asked people who provided positive feedback on social media to submit a review. Another tactic has been free samples to customers in exchange for a write-up. That increased reviews for beauty brand Suave to more than 5,000. 

Some 76% of shoppers are more likely to make a purchase if they’ve read a positive review, according to Forrester. Although it’s worth noting customers are far more likely to read reviews of higher value products. For low value goods typically bought in-store, like most Unilever's brands, it’s more difficult to gauge the full impact of CGC on sales.

Making a bad thing good

Arguably, bad reviews can be as useful. Unilever cites one unnamed brand which got a lot of bad reviews after the product had been “reformulated.” An investigation found people had also complained to the call centre, and it consequently identified a faulty batch that had caused the problem. 

Replacement products were sent to all the customers who had reported an issue, along with communications about why the product had been reformulated.

The company is also in the process of integrating data from customer review submission forms into its CRM system.

“Integration of CGC into CRM will give us deeper demographic information and provide an incremental way to understand different current consumers’ needs,” said Evans. “We can use the data and insights to create more personalised experiences and targeted marketing messages.”

Increased CGC has at least helped the business improve communications with customers and understand how their products are being received by different demographics. 

Now, to write that 3,000 word review of a Hellmann's egg-mayo sarnie...

The British Retail Consortium (BRC) is proposing a series of targeted measures to support the retail industry via a plan submitted to UK chancellor Philip Hammond last week – including demands for a greater focus on digital literacy.

Ahead of Hammond’s inaugural Autumn Budget on 22 November, the trade association’s ‘Helping Shoppers Budget’ document calls on the chancellor to take action to support consumer spending and encourage private sector investment.

The submission includes a call for the government to work with the retail industry to tackle low levels of digital literacy and digital confidence through a digital inclusion retail sector deal.

According to the BRC, retailers have identified “a clear need to develop broader digital literacy skills and build digital confidence across the workforce, from boardroom to shop floor”.

It says that by leveraging the industry’s workforce, retailers can raise levels of digital literacy while supporting the government’s target of a digital economy that works for everyone.

“Global competitiveness requires investment in ubiquitous, up-to-date digital infrastructure,” says the document.

“Great strides have been made by retailers and government. However, the coming years will see an inexorable increase in digital traffic and data must be able to flow at the volume, speed and reliability required to meet future demands of businesses and consumers. Treating digital connectivity as a core utility will ensure the benefits are universally felt.”

Another tech-specific measure it calls for is for the UK to stay in European IT systems for customs and transit post Brexit, and invest in IT to get the implementation of the Customs Declaration System right in early 2019.

Other key arguments in the document call on the government to freeze the business rates multiplier in April 2018, to keep the cost of living down for consumers by not increasing income tax rates for the majority of taxpayers, and to provide additional flexibility in how the Apprenticeship Levy funds can be spent.

Helen Dickinson, CEO of the BRC, said: “At a time of uncertainty for both the economy and the country, it’s important we set ourselves up for success.”

Essential sits down with three industry experts to discuss how retailers need to collaborate in order to take on today’s digital titans. Essential Retail’s editor, Caroline Baldwin, chats to ASOS Ventures founder and now founder of Coded Futures, Daniel Bobroff; director of IMRG, Andy Mulcahy; and MD at Criteo, John Gillan.

Friendly Technologies has global ambitions for its Retail Magic technology, but it was the customers in a UK independent fashion store that helped shape its path.

The company’s technology enables details of items browsed in a store – products taken off the shelf for viewing or trying on – to automatically appear on a consumer’s mobile app. It was a concept requested by shoppers in Cambridge luxury fashion store, Guilio.

Humberto Moran says: “We had a system where we displayed product information and photos on the wall of the Guilio store next to the clothing rails.

“Customers liked it but they wanted the information on their phones, so the idea for Magic effectively came from the market itself.”

Magic works by combining with RFID sensors and iBeacons, but the product information exchange from clothes rail to app is via ultrasound. This is opposed to Wi-Fi, Bluetooth or the store’s mobile network, which proved more complicated to make work.

An in-store customer who opts in to use the Magic app, or a retailer-branded app with the same embedded functionality, will see items they have browsed in-store appear automatically on their smartphone. It allows shoppers to learn more about those items and potentially reconsider their purchasing decisions once they have left a store.

“Once a consumer has downloaded the app, they don’t have to do anything else,” Moran adds.

“They enter the store and the app is awakened by an iBeacon. They might need to confirm they want to use the app today, but then they put the phone back in their pocket, it automatically works, and they just go shopping.”

Retail Magic is raising funds through crowdfunding and angels. The aim is to fully introduce the app to Giulio over the next 12-18 months, as well as fit out the store and its products with the various connectivity required. Ultimately, Moran sees this becoming a common feature in the shopping experience around the world.

Farfetch future store

The technology gained industry approval in spring 2017 when it was showcased as part of global online fashion platform Farfetch’s future store proposition. Giulio is a Farfetch partner, and it was the use of Magic in the Cambridge store that alerted Farfetch to the technology’s potential.

“Farfetch knows that behind the success of online shopping is the fact retailers can understand the customer better because they can track what shoppers search,” explains Moran.

“They get thousands of data points when someone interacts with a website – they don’t get that in a store. With Magic, the person opts in and retailers can understand how they behave in store, and use that information in the way that best suits their business. That is why Farfetch also calls our technology the offline cookie.”

Moran says customers and shoppers alike can benefit from using his company’s technology, and the opt-in system, user anonymity options and consumer control over the app usage mean it is a product that has been designed with data privacy at its core.

The app’s major selling point, according to the CTO, is that it removes the need for consumers to scan codes with their mobile device to access product information online.

QR code, barcode or NFC scanning deployments in a store can disrupt the flow of the shopping experience, and that is arguably a major reason why there are few successful examples of these interactions in the UK retail market, despite much hype.

“That’s exactly the problem we solve – the problem with barcodes, QR codes, or NFC is that you need to take an action – people don’t do this because they don’t want to, or they forget or don’t know about it,” notes Moran.

“We need to do something that makes it really easy for the consumer to use. With Magic, all customers have to do is download the app.”

Referencing his company’s target market, he adds: “In luxury fashion retail, you can’t ask busy people or VIPs who enter the store to take their phone out or take a photo of an item – all they should be doing is shopping.”

Moran believes that the Magic technology is in-keeping with the demands of the modern shopper, particularly the younger generation who spend so much of their lives on smartphones.

He argues that non-mobile experiences can leave stores feeling “naked and boring” to the younger demographic of shoppers born into a digital age.

“If they can’t use their phone, it’s a negative experience. People want to go online to share their shopping experiences, see reviews, check environmental credentials of items, compare prices, and understand the product provenance.”

“The important thing with technology like ours is not about educating consumers on why to use it – we have to educate retailers about its benefits so they can communicate with today’s consumers in the most suitable way.”

The retail industry is in crisis. The businesses of many traditional store-based retailers have stagnated. Growth has given way to shrinking margins and many have seen their market share evaporate. To survive, retailers ultimately need to rethink their purpose and perform brilliantly at delivering what others cannot. Those that create distinct propositions, uncover new ways to fit into consumers’ lives and master digital technologies will be able to cut a new path to success. To do so, retailers need to look beyond organic innovation and instead embrace openness, partnerships and acquisitions as key drivers of strategic innovation, and stay true to their core purpose.

The innovation dilemma

The good news is that retailers are aware of the challenge that is facing them. In a recent study, the majority of store-based retailers cited innovation as the most important factor in their transformation journey. However, these same retailers also cited innovation as the single most difficult transformation to realise. Why is this?

The reason why retailers are struggling with innovation is the pace of technological evolution. The new technologies that are driving change – artificial intelligence (AI), robotics, Internet of Things (IoT) and big data, for example – are capabilities not found in abundance within legacy retailers. These are highly complex technologies that require expert skills and understanding to implement with any sort of success. Gaining access to this understanding and realigning their operations to exploit it is a major step for any organisation. It certainly requires much more than the organic innovation retailers have relied on in the past.

Openness drives innovation

So how can retailers adapt to the digital world and build an innovation capability that has the potential to win back market share? The answer is simple: by being open. Traditionally, retailers have looked to protect innovation. The standard process was to build walls – to protect IP from competitors to give the brand a differentiator. This way of thinking needs to change. Increasingly, the strength of a retailer’s innovation capability will come down to the strength of its strategic partnerships.

Some retailers are already waking up to the possibilities of this approach. In the U.S., for example, supermarket chain Sprouts has teamed up with Amazon to enable home delivery. Importantly, competitors are partnering with each other: in the UK, for instance, grocery eCommerce firm Ocado is partnering with its competitor, UK supermarket retailer Morrisons. Strategic partnerships therefore offer retailers a way to rapidly digitise, enabling them to enhance their innovative capabilities without having to invest time and resources in their own R&D.

The M&A opportunity

For retailers that are really committed to innovation, this credo of openness can be taken to its fullest extent through Mergers & Acquisitions. M&A provides retailers with the opportunity to enable step changes in their operations – buying their way to an innovation leadership position.

Dixons’ merger with Carphone Warehouse is a case in point. The UK’s market-leading retailer of large domestic appliances acquired the country’s leading mobile phone retailer, to exploit the growing ‘networked home’ opportunity and build a service- and-subscriptions business to complement – and even replace – the increasingly competitive hardware retail business.

Innovation-driven, strategic M&A allows retailers to enter new markets, build new channels, or acquire new skills rapidly, without the slow and complex processes that come with organic innovation. Of course, such activity brings with it a level of risk – especially when pursued at scale – and should therefore only be undertaken judiciously by retailers with sound finances. However, the risks involved in taking such bold steps are far less than those associated with doing nothing.

Over the next decade there will be much change within the retailer sector. We can expect to see many legacy brands fall by the wayside while digital competitors with distinct customer propositions and open approaches to strategic innovation stride ahead. Every store-based retailer today needs to review their innovation capabilities in this light, and look at ways in which a more open and bold approach to partnerships and M&A can drive new opportunities for their businesses. 

Tony Stockil is MD at Javelin Group, part of Accenture Strategy

Spar has announced the arrival of its first loyalty app.

The app allows customer to pay for their shopping and collect loyalty points using a mobile device. Shoppers scan a QR code at the point-of-sale and payment, voucher redemption and loyalty card updates are process via the app.

Spar has partnered with Zapper to offer customers the service, and is already live in a number of stores around Plymouth and Exeter.

“We are focused on offering excellent customer service. Working with Zapper means that customers are motivated to shop at SPAR rather than at a competitor store,” said Ian Taylor, SPAR UK retail director.

“Our customers have many great reasons to shop with us and there are enormous benefits to retaining and rewarding them," he added. "We continue to develop exciting modern and relevant convenience stores and Zapper mobile payment rewards loyalty and enables our customers to pay for their goods faster which in turn will encourage repeat use in store.”   

Jon Birt, retail director, Zapper UK, added: “We are SPAR UK’s first app partner to deliver a seamless loyalty and smarter marketing platform. This will further assist retailers in understanding today’s convenience shopper’s needs, all delivered by the ease of quick mobile payments. With the average shopper spending £8.47 when they pay with the app, it is clear Zapper is transforming the way shoppers pay and receive rewards.”

The building trade is one of the last industries to be disrupted, according to Built, a digitally-enabled builders merchant, based in Birmingham. Open seven days a week, the new retailer uses an eCommerce platform to power both its in-store and online business.

“Observing the trend in the market, the building merchants have had it unchallenged for decades if not hundreds of years” said Built's founder and MD Nick Thomas, describing the high barriers to entry and the incumbent businesses which target the trade with retail cash and carry models.

“These massive incumbents get all their profitability from scale, but they’re massively inefficient and don’t manage the supply chain in an architected way,” he added.

“No one has taken on the whole builders merchant [model]. But we had an opportunity to build a new business from scratch and make it relevant for the future”

Thomas described Built as a “digitally-relevant cash and carry builders warehouse”, offering a range of building essentials with scheduled delivery. He said the retailer is accommodating for a generational shift in the industry, where more digital natives are becoming business owners, and buying properties to renovate, but the experience they have buying building products is completely different from the experience they are used to on their smartphones.

Because the supply chain used by building merchants has changed very little, customers can easily use their smartphones to find better deals elsewhere. Thomas also noted how there is often a sense of urgency when buying building materials, which cannot be upheld by the current industry model.

“We’re a start-up business, who have seen an opportunity in the builders merchant space to digitise the retail model and improve the service levels builders face when sourcing from suppliers,” he said. “We’ve redesigned the supply chain and builders warehouse format, but on top of that we’re launching a truly omnichannel business, and we’ve had an opportunity to do that with a blank canvas.”

This is not Thomas’ first foray into digital. The entrepreneur moved into eCommerce and set up the fashion footwear business, Cloggs, building it to a £12 million business by 2011, he also created a multichannel strategy for The Works, before becoming group digital & eVentures director at Travis Perkins in 2014. Travis Perkins has a vested interest in Built, but the new start-up is an independent business.

With Travis Perkins’ investment, Thomas chose to build this “truly omnichannel business” with Netsuite, using its unified cloud commerce platform including eCommerce, point-of-sale, order and inventory management, CRM and financials. Built only began as a concept 12 months ago, yet it opened its first retail store in Birmingham in September, with two more in the pipeline and the vision to expand into cities around the UK.

Streamlining the customer journey

By starting from scratch and using one single solution, Built has a single view of both its customer and stock. “It gives us stock accuracy and visibility you can stay true to.”

Thomas described how a customer might place an order online and drive to the store to pick up the products. When they arrive, number plate recognition identifies the customer and guides them to a collection parking bay where the order is loaded into the vehicle immediately.

Meanwhile, an in-store customer who simply turns up at Built is treated the same as an immediate click & collect customer. Built has no POS system, instead the order is made through the eCommerce site on an iPad Mini and then located in the store to be fulfilled.

“This is the industry leading bit of it – Screwfix says they have one minute click & collect, but it really is seven minutes. But if you come in and place an order through Netsuite, it’s immediately burst to a colleague near the product. It’s as quick as you can get.”

He added: “It’s possible to say that, but it’s difficult to have people believe it because the customer is used to false promises.”

He says he struggles to compare the customer journey with that of the Apple Store because it seems to alien to the sector, “but that’s what you can do in our branches – there isn’t a POS and that’s the integrity of having one system.”

Thomas says the industry has so far struggled to provide the customer a transparent and consistent service because it has a serious data problem.

“You have to be a master of your data and have one version of the truth,” he said.

“It is becoming just like Minority Report.” That’s a comment heard time and again at retail conferences around the world, in relation to some of the new technologies the industry is investing in to personalise the shopper journey.

The comparisons are often made in reference to the scenes where Tom Cruise’s character, John Anderton, is on the run from authorities and he walks through a shopping mall and into a Gap store.

He is bombarded with personalised offers based on his circumstances at the time – something that will resonate with many retailers currently looking to get as close to their customers as possible and provide tailored one-to-one interactions.

The whole film, which is loosely based on Philip K Dick’s 1956 novel, centres on the concept of solving serious crimes before they take place using “pre-cognitive” insight. It is effectively an advert for predictive analytics.

Although not a retail-specific film, concepts that impact the industry such as artificial intelligence, personalisation, targeted marketing and digitising the store – as well as facial recognition and voice-activated commands – are showcased in detail.

Facial recognition

The personal retail experiences portrayed in Minority Report are triggered by iris scanning, an area where huge strides have been made in recent years. Apple, Microsoft and Samsung are among the tech companies already embedding iris scanning capability in their products, for use during the user identification process instead of passwords.

Retail stores are not yet set up to identify customers on arrival based on eye biometrics, as Gap is in the film, but there are multiple facial recognition technologies available to the retail industry.

SAP recently became the latest organisation in the retail tech space to launch a solution of this type. The SAP Leonardo digital innovation system uses facial analysis to connect shoppers’ genders and ages to a company or store’s available inventory and stock. The tech enables personalised recommendations to be presented on large displays in a store.

Biometrics has been viewed as a secure method for payments and security in many walks of life, including retail where fingerprints can be used for clocking in or verification on contactless payments.

Research from the Biometrics Institute predicts that, over the next five years, development of biometrics will shift towards online identity verification, government mobile applications, online payments, eCommerce, and healthcare.

Isabelle Moeller, CEO of the institute, says: “Other findings suggested that face dominates as the biometric thought most likely to be on the increase over the next few years, followed by multimodal [combination of two or more biometric modalities in ID] and iris – all usurping fingerprint.”

If the predictions are right, the fictional Gap experience shown in the film might not be too far away.

Personalisation and targeted marketing

The scene most people refer to when suggesting retail is becoming like Minority Report is when Anderton, who is trying to hide from the authorities, is inundated with marketing messages based on his mood.

“The road you’re on, John Anderton, is the road less travelled,” says a digital Lexus billboard, quickly followed by a drinks ad stating: “John Anderton – you could use a Guinness right now.”

An American Express credit card digital signage marketing message notes: “Get away John Anderton, forget your troubles.” Each of the ads has been served to the protagonist, identifying him personally and knowing his current situation.

So many technology companies purport to offer these systems, and retailers are on record saying they want this type of one-to-one communication. But the closest they get to identifying individual shoppers in-store is when loyalty cards are swiped or customers offer up their details voluntarily to give staff access to their shopping history.

Systems and software exists for retailers to access a shopper’s online purchasing behaviour in store, but targeted marketing based on demographic identification – as opposed to specific person analysis – is as far as it goes at present.

Digital signage solutions provider Amscreen, through its partnership with OptimEyes, is an example of a company that can help companies serve up in-store adverts targeting specific age groups or genders. Tesco stores on petrol forecourts were one of the first users of the technology in 2013, and Carrefour launched the screens in Jordan in 2015.

The system can determine a shopper’s gender, approximate age and other basic demographics, and deliver real-time audience measurement data for companies looking to better understand who shops with them and when.

Martin Schofield, the former retail systems manager at Burberry and ex-IT & logistics director at Harvey Nichols, who is now director of Retail247 Consulting, says he is impressed with some of the biometric technologies that have emerged in recent years.

For him, voice and facial recognition are those on the cusp of practical relevance for retailers.

“Facial recognition technology already facilitates real time volume analysis of streaming video, used mainly in the security world, and it can only be a matter of time before retailers move past privacy concerns and this becomes a standard vehicle for customer identification, in-store movement analysis, loyalty and personalised service,” he argues.

Driverless cars and voice automation

Automated vehicles feature prominently in the film, and this vision is certainly becoming a reality in today’s world thanks to the innovation taking place in Silicon Valley and other tech hubs around the world. In retail, the likes of Domino’s Pizza, Just Eat, and Tesco have experimented with driverless vehicle product delivery.

Talking in November 2015, Marks & Spencer CTO, Matt Horwood, said driverless vehicles “could be a fantastic thing" in relation to retailers’ fleets and home delivery networks. In a presentation at Fujitsu Forum, he noted M&S would “continue to look at it” but he did not expect concrete developments in this field until 2020.

In Minority Report, Tom Cruise activates a wall screen by saying the words, “wall screen”. As Amazon’s Alexa and Google Home grow in popularity domestically, a greater number of user cases for voice-enabled tech interactions will surely emerge in business.

In retail, this type of interaction is increasingly used in warehouses for picking items – with UK grocer Booths an early adopter when it implemented Voiteq’s technology in 2006. At the time, the company’s IT and eCommerce director Andrew Rafferty said it enabled a “paperless warehouse, with an automated process and hands-free, eyes-free enabled workers”, and he still talks fondly about introducing the innovation today.

Statistics point to the next generation of voice-enabled retail tech impacting web search – driven by growing mobile phone usage. By 2020, 30% of internet browsing sessions will be done without a screen, according to Gartner, highlighting the importance for businesses to consider voice when planning search engine optimisation strategy.

“As banks begin to adopt voice for security identification, will we see payment by voice in the retail environment? Maybe a combination of face and voice could prevail,” suggests Schofield.

Multiple examples of the technologies showcased in Minority Report are emerging into the retail space, as they are in other industries and the wider world.

During the making of Minority Report, director Steven Spielberg recruited Massachusetts Institute of Technology researchers to envision what the world might look like in 50 years’ time. The film is set in 2054, but it seems that some of that ‘future’ is already here – and it is happening in stores, malls and warehouses across the globe.

The Entertainer has launched an AI-enabled chatbot which will offer help to customers shopping online for Christmas presents.

The retailer’s mascot, Jack, appears online dressed as Santa, ready to answer gift-related questions from shoppers via voice or text. Jack can also tell jokes and provide tips for cooking the Christmas dinner.

The Entertainer partnered with Red Ant to develop the AI technology which is available on all devices using text input, with voice available on Chrome browsers only.

The retailer said Jack’s responses will be ‘trained’ by humans over time, allowing him to increase his intelligence.

Rob Wood, head of online and digital at The Entertainer, said: "We knew that Red Ant has expertise in developing AI projects, and we wanted to use their experience to deliver a virtual assistant that ticks all the boxes. We wanted something that was fun, relevant and genuinely useful, and Santa Chat is all three. It also paves the way for future connected retail initiatives."