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Retailers driving through tough times with heightened innovation

Ongoing pandemic disruptions affected the attendance at Retail’s Big Show, organised by the National Retail Federation (NRF), in New York City but many retailers and technology… View Article


Retailers driving through tough times with heightened innovation

Ongoing pandemic disruptions affected the attendance at Retail’s Big Show, organised by the National Retail Federation (NRF), in New York City but many retailers and technology providers made the journey and gathered insights into how the industry is continuing to innovate through technology.

By Glynn Davis in New York

Sustainability and supply chain solutions were a prominent feature at the annual event as retailers recognise the need to address environmental concerns and also, closely linked to this, the requirement to also improve their supply chains that have been found wanting in many areas during the pandemic.

Sustainability high up the agenda

Zachary Freeze, senior director of sustainability at Walmart, highlighted how his business is committed to zero emissions by 2040 and that his job was to inspire people in Walmart and its suppliers because 95% of emissions come from this grouping beyond its own footprint.

“Net zero is a long goal and so we have to break it down because it needs to be actionable for all parts of the business. It needs to be good for the business and also for the environment. This needs to be made as clear as possible. For instance, if you reduce packaging then it saves money, which is a good way to start,” he explains.

One way to reduce packaging is through circularity. Michael Newman, CEO of Returnity, is supplying retailers including Walmart and also Estée Lauder with its circular packaging solution that involves reusable containers for goods that are high frequency purchases such as refills and also for subscription services. “Retailers need to identify the areas of high return rates and introduce circularity,” he says.

Addressing the issue of returns

Returns was also a focus this year at NRF from a sustainability angle because the rising levels of online sales is pushing up return rates, which is then leading to increased wastage. One area where this can be reduced is through improved sizing technology solutions.

Morgan Linton, co-founder of Bold Metrics, has developed a sizing tool that simply asks shoppers five questions such as their height, weight and shoe size and from this can ascertain 50 body measurements. The solution uses machine learning to increase it’s level of accuracy. It also feeds into the system the data relating to products that are returned in order to further refine its capability.

The company works with the likes of Canada Goose and has helped it reduce returns by 32% – as well as increasing conversion rates by 20%. In addition, Linton says the data is fed back to the brands in order that they can potentially change the way the clothes are made in the first place thereby further driving down return rates.

Tech-driven tailoring

Allison Lee, founder of Hemster, is also working on reducing returns with her tech-enabled tailoring service that works with 100 brands: “We’re making tailoring accessible at the PoS – booth in-store and online. Instead of customers returning an item we ask if they would like it tailored to fit for free. At our site each garment takes only 10 minutes to change.”

Using the data it generates on the customers Lee says it is possible to create a silhouette of the individual that can be shared with the brand in order to ensure future purchases will be a perfect fit for the customer. “We can lower returns by 20% and people buy more when they know it’s free tailoring,” she says.

The rise in on demand production can also feed into both the lowering of returns and a reduction in waste, according to Jason Berns, SVP of product and manufacturing innovation at Ralph Lauren, who says: “It helps with sizing and colours because it’s tough to have all the sizes and colour combinations available without it leading to some waste. On demand is leading us to be more sustainable.”

Innovations in transportation

Robotics and automation also had its place at NRF this year with various solutions involving robots improving efficiency with back-end inventory management. One particularly exciting solution is Gatik that uses autonomous vehicles for delivery between retailers’ main distribution warehouses and their spoke fulfilment facilities including micro-fulfilment centres. Sam Saad, VP of strategic initiatives at Gatik, works with Walmart in the US for deliveries averaging 300 miles.

The solution works by focusing on specific repeatable routes that do not change and are therefore suiting to being undertaken by driverless vehicles. It can reduce the cost of transportation by up to 30% and helps hauliers overcome the ongoing issue of the shortage of drivers.

Although not yet driverless Robomart brings another interesting innovation to the transportation space with its store-hailing proposition. Carson Denbow, marketing at Robomart, says customers hail the mobile shop via an app where they can view the available items. On arrival the process is all contactless – including RFID tags on the items and payment being made through the app.

Denbow says the service is currently being used in Los Angeles, with the typical delivery made in around 10 minutes, from locations hosted by REEF Technologies who will shortly be opening their first venues in the UK.

Stores playing hybrid roles

The rise of such solutions is certainly not distracting from the role of the store. Brian Cornell, CEO of Target Group, argues the rise of online ordering is actually boosting the value of physical units. “Early in 2017 we talked about a different approach and it was not well received. We were putting billions of dollars into remodelling stores stores and building new ones. We planned to use these stores as fulfilment hubs. This investment has helped us accelerate our sales during the pandemic thorough in-store pick-up and also drive-up. It’s paid back in a big way and it will be sticky going forward,” he explains.

While the physical store in its new hybrid incarnation looks to have a secure future it is being joined by a newcomer – the virtual store in the Metaverse. This was certainly much talked about at NRF with a number of solutions evident on the exhibition floor. Although it is still very early days for these decentralised world’s (that include Roblox and Fortnite) with individuals represented by their avatars a number of big brands and retailers are experimenting in the space.

Retailers playing in the Metaverse

Carrefour has created a supermarket in Roblox where people can receive credits for eating healthy food and Nike has created Nikeland, a virtual representation of its Oregon headquarters. For Patrice Louvet, CEO of Ralph Lauren Corporation, the company’s experiments in the Metaverse is all part of its strategy of attracting more younger customers to its brand.

“We have to innovate, experiment and try new things. This is what we’re doing in the Metaverse. Firstly it’s about engaging with customers to create an experience. On Roblox you can have a virtual coffee in a virtual Ralph Lauren store. How big a revenue source it will be I don’t know. But we are thinking of buying space in this decentralised land,” he says.

Where to place your money is at the heart of the BOSCO solution that pulls in data points from myriad sources including Google, Meta and Tick Tock in order to determine where retailers should invest their online marketing budgets.

John Readman, CEO of BOSCO, says: “Our engine shows where the opportunities are with certain campaigns and/or channels based on whether retailers are looking to attract new customers or drive extra revenues. It gives recommendations, insights and says what you should do.”

Retail Bulletin’s next event will be held on 9 February. Book your free place for the virtual Omnichannel Futures event here

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