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1 Fung business intelligence centre global retail & technology flash report: Wearables telcon 2015 Copyright © 2015 The Fung Group, All rights reserved.
March 17, 2015
SXSW: Taking Retail and Fashion Tech by Storm This week we are attending the South by Southwest (SXSW) conference and festival a more than weeklong conference focused on the convergence of music, film and technology, which is held every year in Austin, Texas. The technology component is called SXSW Interactive and takes place March 13–17. Last year Interactive had nearly 33,000 attendees from 82 countries, with 1,100 conference sessions.
This list of themes in the Interactive segment just scratches the surface of what is available at SXSW:
• 3D Printing
• Big Data/Intelligent Future
• Branding and Marketing
• Drones
• Fashion and Wearable Tech
• Gaming
• Health and Medtech
• Internet of Things
• Startups
• Wearables
RetailLoco
Yesterday (March 15), we attended the RetailLoco conference. (In this context, “loco” refers to location rather than the Spanish word for crazy.) It was hosted by the Location Based Marketing Association and featured a daylong series of panel discussions.
The featured guest at the conference was Alan Wizemann, VP of Product at Target, who addressed the challenges of deploying at 18,000 stores and for customers he calls
guests. Wizemann reports that Target views technology purely as a solution for a problem, and he believes it must scale up to the large number of Target stores. Interestingly, one of the best-‐received functions of Target’s mobile app has been the “shopping list” feature, and it posed a technical challenge to direct the customer to find “milk” in any Target store.
2 Fung business intelligence centre global retail & technology flash report: Wearables telcon 2015 Copyright © 2015 The Fung Group, All rights reserved.
Panel: Moving Beyond the Beacon
One of the panel members represented ShopperTrak, the world’s largest people-‐counting company, which tallies 20 billion people entering and exiting stores annually using beacons and stereoscopic camera devices. One challenge is getting consumers to turn on the Bluetooth radio in their phones in order to communicate with beacons, which many customers shun due to the battery drain. Although beacons typically use Bluetooth, there are solutions that use Wi-‐Fi. Other providers specialize in store mapping. One of the recurring topics at the conference was how to solicit customers without being intrusive or “creepy.”
Panel: Blending Mobile and Out of Home (OOH) at Retail
One panelist quoted a statistic from Google, saying that 79% of shoppers use their mobile devices to get information when shopping. Target spoke of the challenges of unifying the look and feel of its mobile app and website; however, many of its guests do not have smartphones. Retailers face the challenge of making coupons relevant—some apps just send the consumer to the company’s homepage. One panelist mentioned that HTML5 is able to perform many of the functions of a custom application. In many cases, lower-‐tech approaches had higher conversion rates.
Panel: Big Data, Big Brands, Local Insights
This panel’s members talked about the challenges of handling big data. Although many marketing officers want a deluge of data, their IT systems may not be able to handle it. There was also much discussion of user data and privacy. For example, MapQuest (a division of AOL) aggregates its data and sells this information, and customers are given the choice of opting out of this function. MapQuest has, over time, explored the legal issues of the use of its data. Also addressed, many companies unfortunately face organizational challenges, with employees occupying silos and not communicating on how to use their data. There is so much data available that retailers could put it together and derive too much personal information on consumers, leading to justification of that “creepy” feeling.
Panel: Location, Loyalty and Redemption
The panel’s topic was location-‐based marketing. At present, there are no technology standards for location-‐based marketing. There was also much discussion of privacy versus effectiveness. In one sense, privacy is already dead, since much data is already being collected. There exists a huge opportunity to use this data for customer service. Most consumers would like to be greeted by name when entering a store. One panelist commented, “Nothing comes close to the value of a coupon.”
3 Fung business intelligence centre global retail & technology flash report: Wearables telcon 2015 Copyright © 2015 The Fung Group, All rights reserved.
Panel: Driving Traffic From Bricks to Clicks
One panelist commented that location is just one piece of marketing data. Using data to personalize an offer can increase efficacy by 150%. Starwood said that Snapchat was the best way to reach the young consumers who shop at Forever 21. One recurring issue for retailers is the hit to purchases of impulse items typically arrayed around the register which are not available online.
Panel: Connected Cars, Robots and Drones
There was much discussion about a recent demonstration of technology that enables ordering pizza from one’s car—is this really necessary? One panelist wondered if the onboard computer would be better used sensing when the gas level is low and using the GPS to locate the nearest gas station. Tesla was lauded for using an over-‐the-‐air software update to fix a mechanical problem. Interestingly, drones were banned at the SXSW Festival unless tethered to the ground.
Panel: Mobility and the Anywhere, Anytime Shopper
This all-‐female panel, including members from Facebook, the Mall of America, and the Hershey Company, discussed many retailing issues. Speaking of UPS My Choice, one panelist commented that it costs UPS $7 every time they leave a yellow tag on your door when you are not at home. Hershey is particularly concerned about the disappearance of impulse items online and thinks there will be no simple solution; rather, it will take 50 things to replace it. The panelist from Facebook thinks that now is an exciting moment for retailing.
Panel: the Future of Location
The panel was posed the question, what developments do you anticipate in the next 6–12 months, and then further out? One panelist thought that in the immediate future, retailers would need to reduce the friction when a consumer decides to do something. After that, technologies like the upcoming Apple Watch will benefit “impatient, lazy people.” Regarding the Watch, there was discussion about the sort of functions you need once or twice a year, but which are very important; for example, the ability to use a device to unlock a front door when someone loses his or her house keys.
Closing Keynote: Beacon Merchandising Strategies for Retailers and CPGs
Shelfbucks discussed its use of beacons and point-‐of-‐purchase displays in stores. Until recently, retailers had no information as to whether their in-‐store displays were deployed, who viewed them, or how long they were displayed (dwell time). Beacons and tracking systems can collect this valuable data and report it back for analysis.
4 Fung business intelligence centre global retail & technology flash report: Wearables telcon 2015 Copyright © 2015 The Fung Group, All rights reserved.
Deborah Weinswig, CPA Executive Director – Head Global Retail & Technology Fung Business Intelligence Centre New York: 917.655.6790 Hong Kong: +852 6119 1779 [email protected] Marie Driscoll, CFA [email protected]
John Harmon, CFA [email protected] Amy Hedrick [email protected] Aragorn Ho [email protected] John Mercer [email protected] Stephanie Reilly [email protected]
Lan Rosengard [email protected] Jing Wang [email protected]