Google Eyes: Watch While You Shop

The Washington Post: “Google executives say they are using complex, patent-pending mathematical formulas to protect the privacy of consumers when they match a Google user with a shopper who makes a purchase in a brick-and-mortar store. The mathematical formulas convert people’s names and other personal information into anonymous strings of numbers.”

“The formulas make it impossible for Google to know the identity of the real-world shoppers, and for the retailers to know the identities of Google’s users, Google executives said. The companies know only that a match has been made. In addition, Google does not get a detailed description of the individual transactions, just the amount spent.”

“Google would not say how merchants had obtained consent from consumers to pass along their credit card information. In the past, both Google and Facebook have obtained purchase data for a more limited set of consumers who participate in loyalty programs. Consumers that participate in loyalty programs are more heavily tracked by retailers, and often give consent to share their data with third parties as a condition of signing up. (Not all consumers may realize they have given such consent, according to the digital privacy advocacy group Electronic Frontier Foundation).”

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Jet.com Tells Fresh Story In Real Life

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Business Insider: “Jet.com — the online retailer that Walmart bought in 2016 for $3 billion — is now selling some of its products IRL. From May 10 to June 18, Jet will have a food-themed concept shop in Manhattan which showcases artisanal accessories, cookbooks, and kitchen appliances. Most of the items are pretty quirky, like face masks made from tomatoes, kale-flavored chocolate bars, socks with ice cream prints, and banana-shaped flasks.”

“The Jet experience comes to life at Story, a 5-year-old retail space that changes its products, decor, and events programming about every month based on its particular sponsor. For the next six weeks, the sponsor is Jet, where people can also find most of the store’s items. The larger goal of the temporary store is to raise awareness around Jet’s grocery delivery service.”

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Greats Sneakers Pop-Ups: All You Need is Wi-Fi

Wall Street Journal: “Greats, an online sneaker brand founded in 2013, plans to open at least 10 locations over the next two years by signing short-term leases ranging from three months to one year … The Brooklyn-based brand, which sells sneakers ranging from $50 to $200, manufactures most products in Italy and markets them directly to consumers online. It has tested three temporary stores since 2014, most recently a location in Williamsburg, Brooklyn, that was open for one year.”

“Greats is targeting locations between 700 to 1,000 square feet—about the size of a coffee shop—primarily in urban areas. One challenge for online brands is to ensure that new locations increase sales, rather than cannibalize existing business.” However: “Online apparel brands are finding that they don’t need much to set up a store. The evolution of point-of-sales technology means that transactions can now be made on phones and tablets. Some newer retailers don’t even keep much inventory.”

“Greats sells eight core styles of shoes in different colors and materials, making its business more mobile than that of a traditional retailer. At its new locations, the company plans to bring its own interior elements such as shelving, greenery and lighting.” Rachel Ulman of Greats comments: “You can do a lot within four walls. All we really need is some Wi-Fi.”

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Who Will Win The Retail Race?

The Wall Street Journal: “Can physical retailers build intimate digital relationships with their customers—and use that data to update their stores—faster than online-first retailers can learn how to lease property, handle inventory and manage retail workers?”

“It isn’t hard to picture today’s e-commerce companies becoming brick-and-mortar retailers. It’s harder to bet on traditional retailers becoming as tech savvy as their e-competition.”

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Facebook Chatbots Test ‘Conversational Commerce’

The Washington Post: Mastercard “has partnered with Subway and two other major merchants to launch ‘chatbots,’ which are robots that simulate human conversation. The Subway iteration allows you to order a custom sandwich for pickup, something of a digital version of walking down the chain’s sandwich assembly line.” Cheesecake Factory “allows shoppers to purchase and send out gift cards.” FreshDirect lets shoppers “place orders for groceries and meal kits. The bots will be found within Facebook’s popular Messenger app, and will be powered by Masterpass, the credit card giant’s digital wallet.”

“The debut of the bots will provide a fresh test of shoppers’ appetite for what the industry has dubbed ‘conversational commerce,’ the idea of making a purchase or other customer service transaction through A.I.-powered messaging … Consumers are spending more time online, and yet they are concentrating those minutes in a very limited number of apps. Retailers … are realizing that the best way to snare your interest online might not be with a killer app of their own, but by creating bots that live in the apps that you already use.”

“Facebook has said that more than 33,000 bots have been created for its Messenger app so far. This latest batch demonstrates how differently businesses are approaching the technology at this early stage of the game.”

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Neiman Markups: Out of Fashion

The Wall Street Journal: “Once upon a time, all Neiman needed to do to lift profits was raise prices. That model has since fallen out of fashion … competition from startups like Farfetch.com and Matchesfashion.com are forcing more discounts. Over a recent 24 hours, Farfetch’s prices averaged 2% lower and Matchesfashion’s 15% lower than Neimanmarcus.com’s prices on 32 identical items, according to price-tracking firm Market Track LLC.”

“While brands still exert control, particularly over the newest and most popular items, it is harder for them to police prices that change rapidly across websites and fluctuate with shifting exchange rates, industry executives said … The explosion of discount chains, led by T.J. Maxx , that sell designer brands at cut-rate prices also made consumers rethink the need to pay full price. To compete, high-end department stores rushed in with their own off-price chains—Neiman’s Last Call, Saks Off 5th and Nordstrom Rack.”

“Neiman’s Chief Executive Karen Katz … championed a line of specialty stores called Cusp, which Neiman opened a decade ago, that feature lower-priced clothing and accessories. Neiman stores also have added relatively less expensive goods, such as $700 Prada handbags … Ms. Katz reduced snob appeal by allowing Neiman shoppers to use Visa and Mastercard … Neiman has invested heavily in e-commerce … Not all the moves have worked. After building six Cusp stores, Neiman closed two and stopped development of the chain in 2012.”

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Farfetch: An Operating System for Retailers

Quartz: Farfetch, the wildly successful e-commerce platform that allows luxury-fashion boutiques around the world to sell online without maintaining their own costly digital operations, is … unveiling a demo of what it has modestly dubbed the Store of the Future.”

“The ‘store’ … isn’t actually a store. Rather, it’s a retail platform with a suite of different technology products the company intends for partner shops to mix and match to create their own unique experience.” These include:
“Clothing racks enabled with RFID that detect what the customer is browsing and can populate a wish list. Digital mirrors that let the customer view their wish list and request the items in the desired sizes or colors. A mobile payment system for easy checkouts.”

“Farfetch, which doesn’t have its own stores, sees its platform as an ‘operating system’ for retailers, and hopes third parties will build their own applications on it the way developers build their own apps for iOS or Android. What Farfetch will maintain control over is the customer data that allows the physical store and any digital product to remain synched up.”

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Disconnect: What Do Shoppers Want From Digital?

Quartz: “To determine if brands have a handle on what shoppers want from digital interaction, IBM’s Institute for Business Value surveyed upwards of 600 executives from a range of global businesses currently introducing new digital customer-experience (CX) tools. It also surveyed more than 6,000 consumers about their attitudes and experiences with digital interactions. It then compared the responses of the two groups to see how well they aligned. The result: They didn’t match up well at all.”

“Executives, for instance, believed the top two factors driving people to use digital customer-experience technologies were a desire for more control over the interaction and a general increase in digital savvy. The top two driving factors consumers identified, however, were speed and convenience. At least according to IBM’s survey, consumers want their online experience to make things easier for them, and aren’t much interested in technology for its own sake.”

“Many also just aren’t impressing shoppers. For instance, about 70% of consumers surveyed who had used virtual reality to explore products, mobile apps that work in a company’s physical store, or voice commands through a computer or phone to engage with a business felt disappointed with the experience and decided not to use these technologies regularly. Many found them inconvenient, confusing, or hard to use.”

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Walmart & The Uneven Rise of E-Commerce

The Washington Post: “According to new data, the rise of online shopping across the United States is rather uneven, with more affluent states marching more quickly toward a lifestyle in which buying happens on a screen instead of at the mall … Look, for example, at Alaska and Hawaii, which are affluent states that don’t fit the pattern of having strong per-person online spending … this likely reflects the fact that shipping to those states can be pricey and relatively slow — factors that make online shopping less attractive.

“The data also offers hints that perhaps our varied adoption of online shopping is not just about relative affluence, but other lifestyle factors. Take, for example, how much the District of Columbia stands out in the data set. It’s a city, and its growth and spending look much different than in any of the 50 states … perhaps the gap is telling us that urbanites, in general, have migrated to online shopping much faster than their counterparts in less densely populated areas. After all, there are unique pain points to brick-and-mortar shopping in cities: Checkout lines at high-traffic stores can be excruciatingly long. Nabbing an on-street parking spot can feel like a miracle. Many city residents don’t own a car, and it can be hard to lug purchases on public transit or on foot.”

“Similarly, people sometimes ask .. how Walmart, for example, could possibly be sustaining over 4,000 U.S. stores in the digital era. This data helps explain that: You may see a tower of Amazon boxes in your big-city condo building each evening, but that isn’t a good proxy for how people are shopping in, say, rural Tennessee. Even if you’re personally doing less of it these days, there is still enormous appetite for shopping in brick-and-mortar stores.”

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Concept Stores: Retail in Real Life

Quartz: “From Story in New York to Merci in Paris, the well-curated “concept store” has become the shopper’s favourite around the world, blurring the lines between the retail space and the cafe, with elements of an art gallery or a design studio in between. In these stores, customers are invited to spend time in the space, beyond just buying a product, and that approach is gradually spreading through India, too.”

“Take Nicobar, the breezy apparel and home decor offshoot of Good Earth that launched last year … Inside, the customer is greeted with a breath of fresh air and an island vibe, fitting with the brand’s design ethos, as well as a small collection of seasonally-appropriate minimalist clothing, alternating with quirky accessories and home decor items … A giant communal table dominates the upper level of the space, where customers are encouraged to take a seat to work, chat or just read a book from the curated selection on the shelve … A small desk lined with postcards and stationery sits next to a working postbox, so you can send friends a little note while shopping. And there’s also a photo booth, equipped with funky backdrops, for visitors to pose with the clothing of their choice.”

Nappa Dori “operates six stores, including a 1,200-square feet space in Mumbai’s Colaba neighbourhood. Here, pop-coloured trunks, leather satchels, and travel accessories are artfully arranged front and centre, but the space also has a coffee corner serving fresh brews, and a spot for customers to sit and peruse the selection of books and indie magazines on offer … While Nappa Dori’s products are available for sale on its website, Sinha says 90% of its business comes from its stores.”

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