All I want for Christmas is a virtual twin

Is anyone happy to predict what might be coming in 2017?  I suspect not. 2016 was full of unexpected surprises and is best epitomized by the new Toblerone, it still has peaks, but the gaps between them are bigger and more divisive, just like our politicians.

The nation is split over which retailer has made the best Christmas TV spot, M&S or Aldi, but it has not stopped shoppers from shopping. John Lewis might not have made the best TV ad for the festive season, but it did have the biggest ever week in its trading history this Black Friday. And the only prediction I can safely make for 2017 is that the retail event will be back next year. Black Friday has usurped the traditional ‘must have toys’ list and is fast becoming the official start of the festive shopping season spree. Next year we will see greater competition for shoppers and greater focus on their three budgets; time, money and frustration.

For the first time this year I received digital calendar invites for Black Friday events. Intrusive yes, but an indication of how far retailers will go to cut through the promotional clutter to get time with the WIGIG conscious shopper.

This Black Friday also saw a 12% rise in online spending according to retail analysts IMRG. Shoppers will always want value, but that is no longer simply price x quality. They want simplicity and convenience and at the moment that is being delivered (literally) by going online.

Of course, there are many retailers who still understand the vital role of physical stores as environments where shoppers can touch, feel and experience their product assortment and many more that will complain that their stores have simply become showrooms. But the online world is changing, today all the talk might be of the ‘internet of things’ but it is rapidly becoming about experience. The Internet of Experience.

VR and AR are two technologies that people are predicting will transform the shopping experience and we have seen many retailers experiment with solutions in 2016. John Lewis is bringing its Christmas TV story to life in store right now with VR, whilst DS Automobiles showcased a solution at the 2016 Geneva Auto Show which could have a more everyday application in the car buying process. I have no doubt that this will continue to evolve and the virtual showroom will become a permanent fixture both online and in-store for many retailers.

img_0057But perhaps the most interesting application of VR for retailers is not in enriching customer experience, but in helping them in their internal process. There are more and more retailers and brand owners that have VR cave solutions to help packaging design and merchandising programs to deliver the perfect shelf and perfect shop. The next generation of technology will mean this no longer has to be a linear process based on an idealised store layout, instead key stakeholders will be able to come together and collaborate around a virtual twin of an actual store and do that in real time by connecting it to digital shelf labels in a physical store, as is possible with the 3DEXPERIENCE Twin. I’m not going to make any predictions for 2017, but if I was a retailer, a virtual twin would be at the top of my list for Father Christmas.

I’m not going to make any predictions for 2017, but if I was a retailer, a virtual twin would be at the top of my list for Father Christmas.

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2016: Back to the Future of Retail

This article was first published by Retail Week on 31st December 2015

Star Wars caught the imagination at the close of 2015 but the film franchise that holds greater resonance for retail is surely Back to the Future.

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October 21, 2015, was the date on which Marty McFly and Dr. Emmett “Doc” Brown arrived to the future in the second instalment of trilogy. The film debuted in 1989 and the passing of its most famous date last October prompted reflection on what had altered in 25 years. For retail the changes were seismic. In 1989, Walmart was the world’s third largest retailer with $25.8 billion in sales. Amazon didn’t exist. Neither did Alibaba. On 11th November 2015, Alibaba posted sales of $14.32 billion in a single day. Singles’ Day in China.

Given these significant transformations, just what will 2016 bring for retail?

Rubbish into fuel

The COP21 conference in Paris provided impetus for retailers to bring environmental issues into sharp focus as their customers demand transparency from business and value for their values. The reality in 2016 will be new stores that aim to be self-sufficient in energy, more electric delivery vehicles, and the roll out of charging points in car parks.

Robotic Retail

The movies might suggest plastic characters taking orders but the reality is more profound in the shape of Robotic process automation (RPA) in the supply chain and in-store systems that can provide digitally-led customer experiences.

 Machine-to-machine interfaces have the ability to predict and match a consumer’s needs to real-time availability, location, price and delivery. The customer experience is improved and increasingly personal, while the retailer can improve responsiveness while reducing costs and inefficiency.

Wearable tech

Assuming retailers have not replaced their staff with robots, the simplest way to connect them with the cloud and the rest of the salesforce will be a wearable device. This will simplify regular retail procedures and improve customer experience.

CXO trumps CMO

“We can’t advertise our way out of a problem we behaved our way into”. Tesco CEO, Dave Lewis, talking about the challenges the global retailer faces.

Proactive retailers are looking at their organizational behaviours to ensure they stay connected with their customers. UK retailer Game has taken an innovative approach to customer experience, not only building an award-winning app that brings together all its store tools and loyalty scheme into a very convenient mobile solution for the customer, but also empowering its managers to create a community of gamers around each store.

Everywhere, Instant & personal

People do not care about on-line, bricks and mortar or m-commerce, they want to move seamlessly between environments, platforms and devices to fulfill their shopping missions. They don’t care if something is advertising or design, shopper-marketing or promotion, social or CRM, they simply want the best experience.

Back to the Future of Retail will require brands and retailers to inspire the three human behaviours that drive purchase: search, shop and share. But, in tackling the most modern of shopping behaviours, they must not lose the shop keeping skills of the past. Know your customer and give them what they want, when they want it. Make it easy and convenient to buy and deliver value for their values.

Now what would Marty McFly make of all that?

Has H&M lost control of its fashion collaborations?

This article was first published by Marketing on 6th November 2015

I’m a big fan of H&M’s collaborations with the famous designers of the world, writes Simon Hathaway, global chief retail officer at Cheil.

They are collaborations that result in one-off clothing ranges each year that bring high fashion to the high street.H&M’s initiative is a brilliant example of what I term “The Power of X, because collaboration between brands, or between retailers and brands, on new product lines has become one of the most powerful ideas today in retail.

The high street retailer was one of the first in fashion to understand the power of collaboration, its designer partnerships dating back to 2004 (when Karl Lagerfeld created his limited edition range for H&M).

But the scenes of chaos that met the launch of the Balmain x H&M limited edition range yesterday threaten to undermine much of its good work.

H&M hit trouble after the doors of its Regent Street store opened.

The police were called following reports of scuffles between people desperate to get their hands on some affordable Balmain gear. H&M was forced to close the store while its website also crashed due to high demand for the new range.

Enthusiasm and an element of chaos is not unusual at these H&M launches but this time around the situation seemed more extreme.

There’s no doubt that Balmain x H&M is a strong brand collaboration that drives value for H&M and also for French fashion label Balmain.

It’s a relatively small but desirable fashion house when compared to the Versaces of this world, getting a presence on the high street and free advertising in return for its designs.

As expected with this type of launch, where PR and generating word of mouth is an important factor, there’s an element of deliberate scarcity at play from H&M here, heavily advertising and publicising the product range then under-stocking it to create a buzz.

But I’d say the scenes outside H&M tip over from cleverly engineered scarcity into not understanding the amount of stock required to fulfil even basic levels of initial demand.

There’s a fine line between success and failure in these things: it’s great PR when people are camping outside the store the night before, but I’d argue your stock control is out of kilter when you’re forced to close the store with unhappy shoppers outside.

I wonder on this occasion if H&M totally understood the demand for the products.

It’s not as if the clues weren’t there. Balmain designer Olivier Rousteing has 1.6m Instagram followers and his friendship with the Kardashians and Kendall Jenner (pictured above), who have modelled his clothes, has made the Balmain brand highly desirable among high street fashionistas.

There is another significant concern for me in the way the stock management has been handled.

I’d suggest that a range like this fails to benefit retailer, brand and shoppers when it begins to look like a profiteering opportunity for the kings and queens of eBay rather than providing a genuinely exciting product experience for the dedicated followers of fashion.

When a H&M item is going for £650 on eBay within hours you have to start questioning who is really profiting here.

The situation is not irredeemable for H&M. If this happens consistently, though, then people will lose interest.

But it’s now all about resetting things for the next promotion. To focus on better planning, stock availability and making sure the web servers are up to the task. That way H&M will make money and boost its brand rather than provoking anger on the streets.

How many retailers will it take to change a lightbulb?

This article was was first published in Marketing Magazine on 11th June 2015 

“To beacon or not to beacon?” is a question on the lips of many retailers and brand owners.

Talk of how beacons, small Bluetooth-enabled transmitters in stores, will revolutionise proximity-based targeting of promotions has been in the air for at least two years now.

We’ve even seen some action. Tesco began a beacon trial in April 2014 at its Chelmsford store, integrating the trial with its MyStore app. A month later, Waitrose started a similar test at its concept store in Swindon. When Asda and John Lewis launched tentative trials towards the end of 2014, it seemed we were on the cusp of something big. Unless, of course, as was the case with QR and Foursquare, technology superseded instore beacons before they hit critical mass.

Now that just might be happening. In France, supermarket giant Carrefour has invested in an alternative approach. While beacons use Bluetooth LE (low energy) to determine the distance of a shopper (but not their precise location), Philips has developed an LED lighting system that transmits promotional codes to smartphones via light waves.

The Carrefour trial in a Lille store uses this Philips system and functions in a similar way to GPS-based maps. Each LED transmits a distinct location code, which can be picked up by a shopper with a compatible app using their smartphone camera. From this, special offers and location data are sent to the shopper, enabling them to search and locate their preferred promotions or discover promotions and products around them.

It’s a technology that Cheil Worldwide has experience of using, building a similar LED system to support emart’s Sales Navigation work in Korea. The goal was to provide promotions and product location detail direct to smart phones and the technology enabled precision delivery of this promise.

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The advantages, however, are offset by the relative high cost of the LED approach. The Carrefour/Philips approach involves replacing a store’s entire lighting system with the LED alternative. Beacons are relatively low cost and, therefore, could provide a good option for trial for smaller stores or those just testing the water.

Nonetheless, the LED systems offer a viable alternative because they provide a one-off, long-term solution. Even should the current iteration of proximity-based targeting fail to take-off, at least stores that have fitted the LEDs will be left with an entirely serviceable lighting system rather than a bunch of obsolete beacons attached to shelving.

However, don’t get blinded by the sake of technology for technology’s sake. The big questions brands should be asking don’t revolve around whether “to beacon or not to beacon”. Or even “to beacon or to LED”. What’s essential is to consider what you are doing with new technologies to solve customer problems and to enrich their overall experience.

When deciding on whether to invest in new ways of delivering in-store promotions, I’ve learnt that it’s important for retailers and brands to ask whether this activity will enrich the shopper experience, deliver convenience and value.

Don’t forget that people are on a mission when they shop. The best marketers understand that mindset, alongside the retail context, and so remove barriers to purchase. Most retail environments are already jam-packed with price messaging, discounts, and promotion. The last thing that shoppers want is more clutter, they demand clarity and simplicity.

This technology has the ability to deliver all of that and more. The opportunity to deliver personalized experience and dynamic value is there and with that shoppers will adopt this new technology because it will be contextually integrated into their buying habits enriching their retail experience, delivering convenience and value.

To make that happen I find myself asking a new question… how many retailers does it take to change a light bulb?

How subscription models could revolutionise retail

This article was first published in Retail Week on the 13th May 2015

“I wish someone would invent something just like Spotify but a bit more expensive,” said Alex Kapranos, the frontman of rock band Franz Ferdinand recently on Twitter. Kapranos was reflecting, perhaps, on Spotify’s payment structure that sees rights holders receive a maximum of $0.0084 per stream.

Other musicians have also raised objections to their share of the spoils from Spotify’s mixed advertising and subscription-based model. Last year Taylor Swift announced her decision to remove her music from Spotify.

As subscription models extend beyond music to other categories such complaints could become common from stores and the brands stocked in them. The evolution of subscription is likely to raise fundamental questions including “what is a retailer?” and “how do people shop?” as the ‘internet of things’, connected technology in the household and beyond, transforms shopping.

Spotify and equivalents such as Deezer have already placed great pressure on definitions of retail in a category where traditional ‘bricks and mortar’ retailers such as HMV have already had to face the disruptional industry challenges created by downloads, iTunes and piracy. Other sectors are seeing subscription-based services cutting out the retailer to go direct. Subscribers to the Dollar Shave Club in the US get all they need to shave delivered each month. Meanwhile HP’s ‘Instant Ink’ service uses technology in connected printers to arrange delivery of ink direct to people’s doors when they are running low.

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As IOT (Internet of Things) becomes a reality, such services are likely to move to a more sophisticated subscription model that doesn’t necessarily include the supermarket or local retailer. Home and appliances will become truly connected and automation will lead to category management based on subscription.

There’s something of a ‘back to the future’ element operating because, decades ago, most UK homes received their daily milk via subscription in the form of the milkman. However, the issue for retailers and brand owners with the new model is that tech companies, appliance manufacturers and online platforms are blurring traditional boundaries.

Retailers and brands have already been disrupted by the rise of Aldi and Lidl showing they don’t need famous brands and extensive shopper marketing campaigns to grow. Now retailers and brand owners like Procter & Gamble and Unilever should fear an internet of things that manages our shopping for us.Dash-Button

P&G has reacted and Gillette now offers shaving subscription from its website in partnership with Amazon. P&G was also quick to jump in with Amazon Dash and its branded buttons that enables a consumer to order a product when it runs out automatically through Amazon Prime.

The likes of Amazon Dash might look good for brand owners now – providing another route direct to consumers in the home – but no-one worried about what brand the milkman delivered. Convenience was everything, so what can we do when full machine to machine automation of shopping begins to put brands and traditional retailers at risk?

Those retailers with data and logistical muscle will evolve into subscription as Amazon is already doing and we will see business models akin to the mobile phone category, with monthly subscriptions that bundle durable device and consumable. Ikea’s latest prediction is that we won’t have fridges by 2025 and our food will be delivered fresh each day by Amazon’s drones. But 10 years is a lifetime for technology companies and retailers, so by then our fridges might just be so smart that they’ve become convenience stores in our connected homes.

How the Super Bowl turns views into purchases

First published in Retail Week 11th February 2015

As well as being the first major US sporting event of the year, the Super Bowl is a red letter day in the US retail calendar and is estimated to be worth $14.3bn (£9.4bn).

It’s a big day for advertising too – arguably the biggest in the world.

Last year’s ad spend topped $330m (£216m). That’s just over a dollar for every US citizen.

But what relevance does it have for UK retailers? American football may be a minority interest here but the issues the Super Bowl exposes are pertinent this side of the pond.

As retailers know, turning viewers into buyers is a challenge.

Last year H&M tried to close the gap by airing the first ‘shoppable’ TV commercial using Delivery Agent’s ShopTV platform to sell David Beckham’s underwear range.

This year Katy Perry’s half-time show was shoppable. Viewers were able to purchase exclusive products promoted by Universal Music and half-time show sponsor Pepsi. Meanwhile, Twitter’s ‘buy now’ button enabled tweets to be shopped using Visa Checkout.

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It is further proof that the traditional boundaries of brand communications and retail are becoming blurred.

Retailers, especially fashion retailers such as Asos, are already pointing the way to a future when everything that can be shoppable will be shoppable.

That will create a new dimension to what it means to be truly omnichannel.

But the battle for the Super Bowl dollar does not take place on TV – it is won or lost on the shopfloor.

The elaborate Super Bowl-themed displays and promotions in US big-box grocers dwarf anything you would see in a UK store.

While viewers see Super Bowl advertising as part of the entertainment, for retailers ad spend and money spent on property rights are all wrapped up in supplier negotiation for off-shelf display.

AB Inbev, which owns Budweiser, set up 150,000 displays in advance of the event, supported by ad spend and sponsorship of the NFL.

That will be very familiar to retailers and brand owners in the UK,where we are also seeing money from traditional advertising budgets move to digital media and shopper marketing.

Increasingly that shopper marketing spend is digital, reflecting changing shopping habits. Consumers are as likely to find inspiration through Pinterest as through traditional media.

Many retailers understand this and are changing how they approach creative work. For example, Walmart claims to vet every creative idea on how well it will play out in social media.

The relationship between retailers and brand owners is constantly evolving and has always been a negotiation, but the news last week that Tesco is to face investigation for breach of the Groceries Supply Code of Practice highlights how tense that has become.

As we see changes in shopping behaviour brought about by the rise of shoppable media and consumer empowerment through mobile technology, a genuine shift to partnership between brands and retailers will be required.

Curators at the heart of shopping

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The post on Monday from Pinterest sent them straight to the heart of shopping. The social curator site has now made it possible for brands and retailers to include pricing, availability and where to buy. Target, Walmart and eBay are among some of the names to sign up. http://blog.pinterest.com/post/50883178638/introducing-more-useful-pins.

Currently it only works when you pin from a brand or retailer site and we are yet to see the functionality that might follow, but given how we see people using Pinterest we are sure to see solutions that move shoppers from inspiration to sale.

That leap was made with ‘chip-it’ from Sherwin Wiliams, an idea from Cheil family agency McKinney in the USA. The applet enabled people searching for inspiration in home decoration to ‘chip’ an image, break it down into a palette of paint colours and save it to social platforms. When they are moved to buy they simply take the ‘chip’ in-store.

Connecting the store and social is inspiring innovation. The Tapestry app is a physical bookmarking tool developed by the Guided Collective and trialled at Diesel’s Westfield London store in 2012 http://wp.me/p1mP6n-Zi . Shoppers simply tap or scan the product code they like and it goes into their Tapestry, where they can curate and access digital content including expert reviews from bloggers, fashion shows and information about each piece including as size, colour and price.

For retailers this raises a question; traditionally they have been editors of choice, but people are now curating for themselves or looking to people they trust, can retailers become their curators of choice?