Recently I was in Düsseldorf to attend EuroCIS, the leading trade fair for retail technology in Europe. The conference brought together more than 13,000 retail specialists from 90 countries and was packed with educational sessions, case studies and networking opportunities. At our stand we had over a hundred pre-planned appointments, walk up meetings and thought-provoking conversations with industry leaders from all over Europe and beyond. What did we learn from them, what new challenges do retailers face, and what opportunities lie ahead?
Here are my top 5 findings from the event:
- Mobile POS is reinventing the store experience: Our conversations with delegates revealed a very strong focus on the store, which is far from losing its magic in the digital era, and is still considered a key means by which retailers showcase their brand and a vital component of their business strategy. Increasingly, retailers are looking to combine online shopping with relevant, efficient in-store experiences and, to this point, Mobile POS technologies are offering them plenty of ways to extend existing services and add new ones.
The benefits retailers are looking to achieve from Mobile POS include the ability to set up pop-up stores, free up selling space while reducing hardware, furniture and fixture costs, line busting, as well as in-aisle management. Having store associates ready and able to help customers in the aisle, with all the information they need to do so (customer profiles, stock and ordering information) is seen as a great opportunity to improve both customer interactions and sales through suggested selling. The integration of Mobile POS solutions with order management applications is paramount to retailers who recognize the need to optimize each phase of the order lifecycle from order entry to fulfillment and even through returns, while sourcing from the most profitable locations.
- The hyper assortments age is upon us and requires a new focus on planning: There was an underlying theme throughout the entire conference on the importance of personalization (a theme that continues to remain global): the ability to tailor the buying experience and product offering according to each customer’s unique taste and preference. But the focus at the show was on the customer experience and not on the back end impacts. At Aptos we see the trend is towards a hyper-localization of assortments and experiences which has heaped even more complexity on retailers. Predicting demand (when buying options offered to customers are endless), offering curated assortments and managing the complexity of omnichannel is not only a daunting task but is turning to be expensive for many brands. Retailers know well that continuous investments in engaging strategies and new customer experiences without accurate planning can be costly and generate service failures. After many years of efforts in reinventing the customer experience, most retailers we talked to are now focusing more on ‘behind the scenes’ planning for omnichannel. Retailers are looking for new ways to better know their customers and predict demand; they are exploring different techniques to drive the assortment through advanced clustering and attribute-based analysis.
- Artificial Intelligence will be key in predicting the unpredictable: When discussing with retailers at EuroCIS about new and better ways to predict demand and manage all of the data that omnichannel commerce has generated, we all seemed to agree that Artificial Intelligence is the journey. The demand for a greater level of granularity across wider data sets creates a clear need for AI, which will make dealing with this volume of data much more manageable. While many retailers in recent years focused on AI for chatbots and virtual personal assistants, a key use case that is emerging is demand forecasting. Artificial Intelligence, and machine learning particularly, can help handle structured and unstructured data, identify complex/hidden correlations, and ultimately learn from those associations. In fashion, AI can help identify correlations between styles (or attributes of styles) that sell well together, the cannibalization effect of a product on others, or automate the effect of seasonality, events, markdowns and weather. Starting from a variety of unstructured data from different sources, AI will help recognize predictive patterns that feed our forecasts and become an input to the assortment, allocation and replenishment planning processes. Inventory optimization and warehouse management will also benefit from AI, which can reveal complex correlations on products that are typically ordered together and should then be handled, stocked and picked together.
- Sustainability and wastage reduction is top priority for Fashion: The theme of eco-sustainability has generated a great deal of debate throughout the event, particularly in relation to wastage reduction. Fast Fashion and the race to continuous innovation are responsible for lots of unnecessary waste: tons of prototypes and samples which don’t turn into final products, products which are taken to market but don’t sell, and garments that are finally selling but have such a short lifecycle that are soon disposed. When discussing with some delegates, we shared two approaches which are proving effective to reducing oversampling and waste. First, a deeper integration of the planning and PLM realm, with designers benefitting from the market insights and intelligence that planners can provide from the earliest phases of development. Innovation gets closer to the market (you are more likely to design what will sell) which ultimately translates into a reduction of samples that are not confirmed and of unsold stock throughout the network. Second, we showcased our capabilities to use 3D and augmented reality to reduce time to production and operate the prototyping and sampling phases in a digital manner. No fabrics and manufacturing resources are used until the finished style is confirmed and created.
- Microservices are the next big thing: Most retailers today will have traditional points of sale, an instore clientelling app, a mobile POS, a kiosk, obviously an eCommerce site, probably a consumer app, multiple market places, franchises, pop-up locations…and this list could go on. Each channel will have different applications and different data sources, different engines and is costing the business to upgrade and maintain. With all disruption happening in the retail industry, this approach is no longer ideal or sustainable. Retailers look for technology platforms that can be like a chameleon: adaptable, agile and able to support whatever unique journey or experience customers are seeking. At EuroCIS, we discussed with delegates how Aptos responds to these needs with a cloud native platform that is designed for change based on a microservices architecture. Microservices are gaining strong traction among retailers for offering ‘capabilities’ that can be used over and over to assemble new experiences online, on mobile, in store or even where the retailer has no direct presence. Benefits of microservices are in terms of speed to market (new capabilities can be deployed independently of major upgrades), reduced TCO (with efficiencies gained in maintaining small and well-defined pieces of code), as well as resiliency (leveraging microservices to easily adapt technology to business process change).