Imagine ordering an item online, and having it delivered within the hour. Sounds impossible right? Well for British luxury etailer Matchesfashion.com it’s not so impossible. During the Women’s Wear Daily Global Fashion Forum in Beijing, CEO Ulric Jerome stated that in the next 18 months one-hour delivery will be the norm in big cities. In addition, the company is also looking at 360-degree video ahead of a move into virtual reality. Surprisingly, Jerome dismissed the need to use drones to achieve the ambitious delivery target, saying airspace regulations could be a stumbling block. Instead, he’d rather focus on perfecting fast delivery. But what fueled this bold mover? Mobile sales are moving upwards with 48% of sales now coming from either a smartphone or tablet. As luxury shoppers are said to be “the most connected customer in the world,” and Jerome is working on another initiative to help Matchesfashion.com with customer engagement. He plans on doing so with stylized shoppable fashion videos. These videos will act as the stepping stones towards 360 degree videos, which will give customers the freedom to interact with the 420 brands the online retailer offers and later virtual reality. Matches sees the importance of joining fashion and technology. Thus, they plan on launching the 360 videos first, and follow up with virtual reality. In the below video, Jerome speaks about E-Commece and the future of retail in the luxury space.
If one watches a movie or a reality show set back as little as ten years ago, about the rich and famous, one thing they had that most people don’t is a personal stylist. A personal stylist is a person that studies your personal tastes in clothing, keeps up with trends, and presents current clothes that fit your style for you to buy. One could argue that a personal stylist has to have a certain creative trait about them, however what if that creative trait could be translated as an algorithm on a computer? Well those personal stylists out there better figure it out considering that time is here. Our technology is gradually disrupting the job market, some are already aware of that as who ever is reading this blog should be. A big assumption however is that the jobs being replaced by technology are strictly mathematical, or strategic jobs. You could easily assume that technology could not do what a person does, like creativity for example. But never say never in this world, in order to deal with disruption one must stay aware and expect the unexpected.
One example of the online personal shopper/ stylist would be this web site Keaton Row. They start out asking you a bunch of questions about your style, show you pictures asking you to choose what you like, and then give you style advice. Its one of tons of fashion websites that do the same like Fabletics, JustFab, and ShoeDazzle. Also BirchBox and BirchBox Man do similar things.
The example in the beginning was about fashion but personal selling is being disrupted from more angles than just fashion. Health and personal products of any kind are being disrupted. People used to go to other people with certification for advice but now it is so much cheaper, easier, and more convenient to go to your phone or computer. Plus you have access to opinions of either hundreds of reviews, or a system that asks you what you like and based on that comes up with options you would like. Both are options that are taking people by storm, while leaving many without jobs. It really is a double edged sword.
We have constant access to almost everything due to the internet. We are able to tell how much a sweater is at Walmart to how much it is at J.Crew to how much it is at a small boutique in Idaho. With technology giving us access to everything, companies have become very price transparent. We know how much a product is at any store in any location.
For example, a Louis Vuitton bag in Europe is significantly less than the prices in America and the only way you would know that is because of the internet and the access we have to the world. With the smart phone we have become smart consumers. Today’s customers are well informed on what they want, where they want it from, and how much they will pay for it. They go into the store knowing a lot more about the products than the consumer used to know. We used to go into the store and ask the salesperson for what we should get.
A major problem companies are facing today is showrooming. Since consumers know that they can buy a product online for a cheaper price, they go into the store to actually look at and hold the product. Companies like Walmart, Target, and Home Depot are facing this issue because Amazon has the same products for a cheaper price. Also, consumers just stay at home and do some online shopping in their pajamas and the product shows up at their door in a mere 2 days.
To combat showrooming, companies have realized that they can use their price transparency to their benefit. Since we know how much products are at other stores we choose the cheapest option. Companies are now using a Price Match Guarantee. This means that if the consumer brings in proof that the same product you are buying is cheaper at a different place, you can get it that price. This means that competition will not be based on the price of the products now because you will be able to get the same price everywhere. Now, the competition will be based on brand loyalty, convenience, preference, and experience. Companies have to set themselves apart from each other in different ways because prices will be the same.
In our Deliverable 2 you watched a YouTube video of each member of the group sharing feedback on research conducted on each of the 4 Cs. I explored the idea of the customer (you and me) and how they relate to the three P’s of Marketing (Product, Placement, Promotion). Also taking into account the past, present, and future to exemplify our research process.
Take a look at the Customer integration of research complied into an animated video. Here you can see how the customer experience will change in the retail industry.
Stay Aware with Retail!
Mobile applications are instrumental platforms that allow the retailer to become one with customer and remove the barrier between the two. As I mentioned in an earlier post, the tagline “there is an app for that” has become modern language and a way of life. With that, the retail team downloaded three mobile apps and tried them.
Out of the applications that we chose to test (RedLaser, Pounce and Mallzee), RedLaser was the only app that actually was a reliable source. Pounce, which allows a user to take a picture of an item and purchase it right through the app, did not effectively work. It pulled up similar items, but not the actual item we wanted.
The other, Mallzee, was “awful” as my team members identified. This personal shopper app was not intuitive or helpful, in fact one of my team members uses Wanelo, which is an app that you can purchase items through in one place.
It is interesting to note that the applications that claim to be intuitive and helpful, are actually not helpful. I instead prefer to use apps such as the one for Nordstrom and Macy’s that are directly linked to the retailer. Let us know what your thoughts on the applications are, and if you have any other applications that ease the interactions with the retailer!
Vests may be in today but, tomorrow high waisted jeans are so in. Fashion is constantly changing and just like that the retail industry is constantly evolving. I focused on the cost of retail and how it has changed over the years. I broke down the information I found into the Past, Present, and Future. I further divided it into the Price of Goods, Occupancy Costs, and Marketing Costs. This helped organize this information and easily compare all the information. The common disruptor in all three is technology. With new machines and softwares, producing goods has become a lot cheaper and easier. It is more efficient than a human. This technology has replaced the actual store and salespeople too because now people focus on online shopping.
We started in the past with a higher cost to produce due to having little to no technology. There were occupancy costs associated with the store, holding areas, and factories. They also had to hire more employees to sell and produce goods. Most of their marketing budget went towards billboards, tv/radio ads, and print ads.
We go into the present where we are surrounded by technology and see that the price of producing has gone down because we have replaced humans with more efficient and fast machines. The occupancy costs are similar to the past. Today, companies focus on digital marketing with website, social media, and targeted advertisements.
Looking towards the future, a big question comes up. Will there be a brick and mortar store? What will companies do with online ad blocking softwares? How cheap will it become to produce goods with faster and smarter technology? Find out more about the Disruption in the Cost of Retail in this video!
When looking at the past years in retail many wheels are turned by the power disruption. Technology and also the laziness of people has extinguished many traditions in the retail field, or at least replaced them. Everyone living a fast pace life is aware about how much easier it is to online shop rather than driving all the way to a store and having to wander around trying to find something you like. People simply do not have the time or the energy for something like that. But more than just the action of going to a brick and mortar store is going out of fashion, certain shopping holidays are going with it. What’s the biggest shopping holiday of them all? Well if you asked someone five years ago they would all probably say Black Friday! However now, that shopping tradition may be getting over run by the more comfortable option, Cyber Monday.
In an article by CNBC, David Kohl writes about how consumers care all about prices. When one combines good prices with the comfort of home then, it makes sense that Cyber Monday be equal or more popular than Black Friday. Dan de Grandpre, CEO and editor-in-chief of Dealnews.com, says it himself, “Over the last year, Cyber Monday has caught up to Black Friday.” Also Cyber Monday happens after the hectic chaos that is Black Friday, so retailers are more inclined to move product out, which in turn means better sales. The article also mentions that, “Very few retailers’ brick-and-mortar stores are open on Thanksgiving, though there are some, but shopping at their online counterparts on Thursday is a big option.” So does that mean that Cyber Monday will envelope itself and turn into Cyber Thursday, Friday..and all into Monday? I would not be surprised that in ten years Black Friday was a thing of the past.
Keep up with the retail team! Who knows, in a few years we could be saying “Get in loser, were going online shopping!”
Some of these unique mobile applications include:
- RedLaser, a scanning software that takes the concept of showrooming to a whole other level.
- Pounce, which allows users to take a picture of an item in a print ad, and in just a few clicks-purchase the item through the retailer.
- Mallzee, which is a personal shopper that recommends fashions to its users.
E-Commerce Logistics Models
In developed economies, e-commerce logistics represents the latest big driver of change in logistics and physical distribution networks, which have evolved substantially over the past 40 years or so. Currently, it remains the case that as e-commerce continues to grow, most shippers, particularly multi-channel shippers, are still only just beginning to work out what this will entail for their distribution network infrastructures.