The expert in retail at the US consultancy claims that innovation not always has to do with integrating technology in the store.
Nikki Baird will give a talk in Mexico City about trends in retail transformation. The vice president of Innovation at Aptos Retail is a follower of the idea that innovation is not a concept solely linked to the incorporation of technology. The expert in retail says that there are global trends that are changing the way in which brands are presented to the consumer in a context of the sector’s transformation, after the retail apocalypse that hit the United States.
Question: Which role plays today innovation when the retail sector is undergoing a transformation?
Answer: All is about understanding the experience that the consumer is looking for, rather than offering it. In this regard, fashion brands are on the right track because they knew how to adapt their products to new lifestyles. Retailers must understand that entering a store and walking through the coat racks is not an experience. You have to approach the consumer from the moment they decide to enter the store and then become relevant as brands. The department stores were confident in the fact that having a wide range of fashion was positive, but now the consumer has all those brands, and more, on the mobile phone.
Q.: Is fashion an innovative sector?
A.: Fashion is one step ahead of other sectors, because the gap between being a retailer and a brand is closer than in other industries. In fact, this was one of the factors that affected department stores in the United States, since fashion brands did not trust them when it was necessary to implement the changes demanded by the consumer. Fashion is more innovative in the sense that it acts like a brand and thinks more about experience and consumption habits than other retail sectors. Innovation has to do with how you perform consumer engagement, both through the online and offline channels.
Q.: Is there anything in which the sector is left behind?
A.: There is still much to improve in terms of adoption of the technology. You have to understand that e-commerce is one of the most difficult changes that fashion had to face. Ten years ago no one would have thought that, since it is a very practical sector where one has to see how clothes fit. The technology applied to garments is also another of the pending issues of fashion in terms of innovation.
“Fashion is one step ahead of other retail sectors because the gap between the company and the brand is closer”
Q.: How important is the shopping experience in the physical store for the consumer?
A.: Nowadays, it is everything. Brands are modifying their premises to have spaces within the store to hold events or provide other services beyond shopping. In fashion, it is very easy, you can offer fashion shows, customization of clothes, tailoring services and more strategies to bring another type of experience in the physical store, and then justify that the consumer is not only paying for the product but for everything that encompasses the brand.
Q.: And in the online?
A.: In e-commerce, the experience focuses on erasing the barrier between reality and what is shown on the screen, in addition to the delivery times of online orders. For that first reason, fashion brands are including lookbooks that can be purchased directly, or 1 click ordering on their accounts in social networks. To provide a better online shopping experience, brands are asking users to give their measurements, size or height so that the order is the most similar to trying on the garment in the physical store. However, there is no one single way to provide a good experience in retail and none of the strategies used until now has really seduced the consumer.
Q.: How can you detect which technologies are useful in the store?
A.: The interesting thing about this era is that we still do not have answers to these questions, so companies are free to try and innovate with the tools they want: smart mirrors, LED screens or RFID. At present, it does not make sense to use testers without technology, and that already lowers the shopping experience. Virtual reality can also be equally applied in the clothing sector, where changes are starting to be seen.
“There is still much to learn about what is happening inside the store and what happens outside but with an impact on the physical point of sale”
Q.: What are fashion companies doing well and doing wrong in terms of innovation?
A.: For example, loyalty or subscription programs are very popular among fashion retailers in Latin America, aimed at medium or medium-low segment consumers. It seems an archaic strategy, but it is what currently works best in the sector. Another one is the rental of clothes, but more focused on the luxury sector. In the United States or Europe we also see fashion companies that offer the option to try before using or to send a box to the user with several products and return those they do not like.
Q.: Are all the data that a store can collect used correctly?
A.: There is a lot of interest in learning how the consumer browses through the store, whether physical or online, and fashion has invested a lot in matter, although not in a very smart way. There are still no tools to understand the behavior of consumers with clothes in a store, how many times a garment was taken to the fitting-room without anyone actually purchasing it, if it was returned before even trying it on, etc. Fashion companies are also trying to cross data of the online channel with that of the offline, but we also have to understand that there are products that are better sold in the physical store and others in e-commerce. There is still much to learn about what is happening inside the store and what happens outside but with an impact on the physical point of sale.
“Once a fashion brand applies technology on the garment, and that will start boosting the sector in terms of innovation”
Q.: Are all consumers ready for the omnichannel experience?
A.: The youngest are more inclined to that system or at least it is what they demand the brands. There are global brands that were successful in their local markets, so they want to replicate that in the rest of the world, but it does not work the same for everyone, not only due to the type of consumers but also to the market opportunities. But on the other hand, the fact that these giants take their local strategies to other countries drives and inspires other smaller operators, and leads them to raise the bar.
Q.: Should companies have one team to think and another one to produce?
A.: We are starting to see companies focused on the customer experience. Nowadays, you cannot conceive a retail company without an omnichannel strategy from any division of the company. It is a type of mentality that has to be transcendental in all areas of the company.
Q.: Will we see fashion companies stand out in innovation?
A.: It is difficult to avoid having more if the global environment forces any company to be innovative. The limit will be when a fashion brand efficiently applies wearable technology to garments, when that happens, the rest of the operators will wake up. Many of the innovations in fashion are linked to environmental awareness and that is also a branch to be developed. H&M created a way to recycle the clothes that other companies have tried to imitate as well. When someone has an idea, the rest of them contribute with new improvements.