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At NRF 2018 Retail's Big Show, Retail Technology Was Center Stage

This article is more than 6 years old.

Source: FGRT

Last week, the FGRT team attended and presented at NRF 2018 Retail’s Big Show in New York. In past years, retail technology seemed to feature more peripherally at the show, but there has been an industry shift, and technology took center stage at this year’s event. The exhibit halls were teeming with major technology solutions providers such as IBM, Microsoft, Intel, Amazon Web Services and Avery Dennison. At the Innovation Lab, a popular destination at the show that was sponsored by XRC Labs, 25 emerging technology companies showcased their solutions and industry leaders participated in panel discussions on a variety of retail technology topics. Beth Ferreira, Managing Director at FirstMark Capital, perhaps summed up the theme best in a panel discussion at the show when she predicted that, eventually, “all companies will become technology companies.”

Source: FGRT

Artificial intelligence (AI) is transforming the retail space by helping retailers provide engaging customer experiences and personalized interactions and enabling them to deliver products anywhere, at any time.

Everyone is talking about AI. At NRF 2018, I moderated a panel session titled “How AI Is Currently Powering Retail’s Growth.” I kicked off the discussion by describing Alibaba’s New Retail strategy, which involves providing the best customer service, 24/7, no matter where the customer is, and delivering the product to the customer anywhere, at any time. AI helped Alibaba achieve record sales during its 11.11 Global Shopping Festival on Singles’ Day in 2017, when the company’s AI-enabled customer service handled 95% of customer inquiries.

Source: FGRT

Silvia Campello, President and COO at lingerie company Cosabella, predicted that 85% of all transactions will be AI-based by 2020. Campello said that Cosabella is using AI in four main areas: advertising, email automation, A/B testing and product recommendations. She said that the company is using A/B testing to assess different dimensions, fonts, styling and other aspects of its website design, and that the design optimization had resulted in a 30% increase in conversion rate.

Kris Miller, Chief Strategy Officer at eBay, discussed how the customer’s end-to-end journey in commerce is changing. Miller said that deep learning is becoming mainstream and that AI is helping retailers improve the customer journey and transform the entire customer experience. eBay has more than 1 billion product listings, so improving its search functionality was critical for the company, Miller said. In October, eBay debuted its Grouped Listings feature, which organizes search results by item, rather than displaying each seller’s product listing. The company also rolled out two visual search features—Find It On eBay and Image Search—for its mobile app. The Find It On eBay feature allows customers to search for products on eBay by sharing images from social media platforms. Image Search enables customers to take pictures, or use existing ones on their phones, to find similar listings on eBay.

Companies that use deep learning and data analytics can make better pricing, staffing and product-curation decisions.

Greg Petro, CEO of First Insight, moderated a panel session titled “Retail Disruption: The Science of Pricing and Competitive Differentiation,” where panelists discussed how data can be used to inform business decision making. Richard Flaks, SVP of Finance, Planning and Allocation at Chico’s FAS, said that pricing is not simple and that companies need data analytics from a reputable firm to inform their decision making. He said that simply reducing prices is not an effective way to compete and that retailers could use data to differentiate their products and experiences.

Data can also be used to help drive staffing decisions. In a panel sponsored by ShopperTrak titled “Achieving New Levels of Customer Engagement with Prescriptive Retail Analytics,” John Cavellini, formerly a financial analyst at Williams-Sonoma, reported that scheduling the appropriate ratio of store associates to customers during “power hours” can increase store revenue by 1%–3%. He said that by analyzing store traffic data, individual stores can optimize their revenue, and he noted that this is often an overlooked area.

Michelle Bacharach, Founder and CEO at FindMine, reported that when customers are told what products to buy, they purchase 200% more. Bacharach said that FindMine uses machine learning and deep data mining to provide customers with personalized product curation in the form of specific recommendations for creating outfits.

Consumer expectations for grab-and-go offerings and chat are driving the next generation of retail.

Veronika Sonsev, a partner at consulting firm Chameleon Collective, moderated a panel session called “Predicting the Future of Retail: A VC Perspective.” Sonsev asked the panelists what the biggest trends are in retail technology today. Scott Friend, Managing Director at Bain Capital Ventures, said that consumers expect a frictionless shopping experience today. “Why can’t I just walk into the store, grab what I want, and walk out?” he asked. Friend said that there is an opportunity to develop technologies that support the grab-and-go concept. To date, these technologies have not been terrific, he said, so there is room for improvement.

Janie Yu, Partner at Fung Capital, emphasized the importance of chat offerings in today’s retail environment. “Everyone is on their phones. You have to take notice. Consumers are spending most of their time on their phone and in chat channels—at least one to four hours a day, depending on where you are in the world. Retailers have to think about having a relevant experience there,” Yu said.

Chris McCann, President and CEO at 1-800-Flowers.com, reinforced Yu’s point in the “How AI Is Currently Powering Retail’s Growth” session. McCann said that conversational commerce, specifically voice commerce, can recreate one-on-one conversations and personalize interactions. He noted that new technologies are simply allowing companies to recreate the customer relationship that they have always had, but on a greater scale. In October, 1-800-Flowers.com launched a new capability that allows customers to use Google Assistant on a mobile phone to place an order via voice or text. “We continue to embrace and invest in technology that makes it easier for gift givers to shop with us, wherever, whenever and however they choose,” McCann said. 1-800-Flowers.com believes that technologies such as chatbots are making online interactions simpler for customers by providing another way to communicate.