Last week I attended the Retail Business & Technology Expo 2018 in London. I last attended RBTE in 2012, and the first thing that struck me was just how much it has grown. In its early days it was on the cutting edge of topics because it took on combining both business and technology leaders under the same roof to have conversations about the future of retail.
That early vision has paid off, in that, no one thinks any longer that it is at all remarkable to hold a conference that brings together business and technology in retail.
Two things struck me about the show this year.
Digitizing The Business
One, digital and customer experience are now completely fused together – inseparable. RBTE this year was co-located with the Retail Digital Signage Expo and the Retail Design Expo – the former focused on digital signage (surprise!), and the latter focused on store design.
The store design section was about what I expected it to be: slat-wall and lighting and flooring. There were also some potted plant vendors and some vendors focused on seating or display stands. But on the other side of the expo hall, other than the carpet color changing over from blue to red, it was very difficult to tell where RBTE ended and RDSE began. Much of the digital signage section was focused not on display, but interactive – touch screens and responsive tabletops, in-store beacons, RFID-activated stands and displays.
There were several solution providers within the RBTE side of the Expo hall that also addressed the customer experience, and I imagine a lot of them faced a bit of a quandary deciding where to locate their stand. This is not a bad thing – customers increasingly expect a digital component to their shopping journey, up to and including how it is delivered in store.
It’s a mistake to read that and think it means that you should implement an Amazon Go experience in your stores right away – digital has a context and retailers would be shooting themselves in the foot if they ignored the in-person context that customers seek when they go to a store. But the fact that even in stores, it is increasingly difficult to tell where the “enterprise” solution ends and the “customer experience” solution begins – this is an important evolution of retail technology, and RBTE’s Expo hall reflected that.
The second thing that struck me about the show related to the content tracks at the event. I had the luxury of actually attending content sessions – I imagine this luxury won’t last forever, but I will enjoy it to the hilt for as long as I can! I attended four sessions, not including the panel I moderated or Vicki Cantrell’s call to arms around using data to differentiate in retail. For a free event – anyone in the expo can attend any session, including tracks at other shows – the content was surprisingly good, with companies very willing to share some pretty deep lessons learned. What did I learn?
1. China Looms Large
AliPay and WeChat, the two dominant payment platforms in China, are poised to eventually be the dominant payment platforms globally.
I was keyed to this idea during Engage US, when I overheard some people talking about how all the taxi drivers in Las Vegas are now taking AliPay and WeChat payment methods, because of the influx of Chinese tourists, all of whom expect to pay that way.
At RBTE, Wirecard, a Germany-based payment services provider, presented a case study on the implementation of AliPay and We Chat for retailers within Munich Airport. Munich is an important air travel transfer point in Europe, and Chinese tourists usually travel with a very long list of purchases to make for family and friends, especially where they can buy luxury goods with greater assurance that the products are not knockoffs. Chinese tourists spend 3-4x what an average European tourist spends – EUR 860 for your average German traveler vs. EUR 3000+ for a Chinese traveler (and the gap with British travelers was even larger), according to Wirecard. But when Munich Airport implemented AliPay and WeChat at a few of its retail shops as a test, it found that Chinese tourists using those payment methods spent 280% more than those who used other methods.
The idea of something like AliPay “winning” the consumer digital wallet wars immediately raises a lot of questions – can I open an AliPay account as an American deep in the embrace of the US banking system? What kind of oversight or access does the Chinese government have with AliPay? As a US consumer, I have a certain base level of assumptions about consumer privacy and security that I’m pretty sure are not good assumptions to have when engaging with Chinese authorities. Pretty sure – but not positive, and not even sure that I would be “big potatoes” enough to be interesting to Chinese authorities anyway (I certainly hope not!). I’m intrigued, and will be digging into that as soon as I get a chance.
2. It’s All About Data Into Insights
Second thing was something that I didn’t so much learn as have reaffirmed for me: anyone who tries to build a business case for something radically new is a fool. No one will believe the business case, and when you actually do the radically new thing, you find that all the benefits you thought would be there are not really there, but a whole slew of other benefits are – ones you never thought of when building your business case.
Such was the case for Vita Mojo. Vita Mojo is a restaurant. The founders weren’t restaurant people. They were technologists who were really more interested in selling a cashless order-taking system to the restaurant industry. But when they were rebuffed too many times with “Consumers won’t eat at a cashless restaurant – that’ll never work”, they decided to put their own skin in the game. They opened a restaurant. They now operate three locations in London, and I wish wish wish I had the time to check one out.
Here’s how it works. You order from a kiosk, I’m assuming at a table. But there is no set menu. There are a list of main dishes and a list of sides, and you put together your own meal on your terms. You can refine the list according to your personal dietary needs – allergic to nuts or dairy? Just say so, and you’ll only see options that meet those requirements. But the real magic is that you can also size your portions according to a calorie goal. So you can size your meal up if you’re hungry and size it down if you’re not, and the kiosk gives you real time feedback on how many calories you’ll be getting on your plate.
That was what the founders had set out to prove. But what they learned is that, in order to do that well, they had to digitize their entire restaurant. They had to have very detailed product and portion information, and they had to digitize the kitchen so that each custom order could be communicated to the back of the house and tracked for delivery to the right customer’s table.
The end result: Vita Mojo has an unprecedented level of visibility into their business. They see all of the plated combinations that customers build for themselves, they see the explicit decisions and tradeoffs consumers make around eating enough vegetables, dietary requirements, and calorie counts. They just recently implemented an integration to a consumer DNA company (he didn’t share which one), where you can share your DNA results with them, and they will suggest the perfect meal based on your DNA.
There were lots of questions from the audience on that one – basically, you’re authorizing to share 3 specific DNA markers, and the restaurant uses those markers in combination to decide whether you need more protein or less dairy or whatever it may be. “No personally identifiable information” the presenter was quick to say, and noted that it was not the entire genetic profile. He also noted that people are generally willing to share the information, because they are intrigued to see what kind of recommendations they get – an important thing for retailers to keep in mind: consumers will give you pretty much anything, so long as you promise them something that they value.
But that data access – that is going to become a priceless resource for Vita Mojo as the company looks into consumer behavior. I don’t know what they can do with it yet, and neither do they, really, but at least they have the data to start from. For example, did you know that at the restaurants (the 3 locations in London), people are 80% more likely to order broccoli when it rains? Like I said, I don’t know what you can really do with it, but it’s more than you knew a second ago.
3. Data To Insights, Reinforced
Third thing I learned came from Brian Bride, the former head of Amazon.co.uk, and now chairman of Asos. It wasn’t that I learned anything new from Brian, but I found it fascinating that he very nearly echoed Vicki’s presentation, almost word for word. You can’t win without technology. And you won’t win if you don’t use all the data your technology gives you about your customers and your business. Not unlike Vita Mojo, Brian emphasized that you may not know what to do with all that data when you first get your hands on it, but for sure you can’t do anything if you don’t have it.
4. Oh Yeah, And Drones
Did you know that the largest drone delivery service area in the world is in Reykjavik? I had no idea. Aha.is is an Icelandic marketplace that is actually the forerunner of live, to customers drone deliveries.
Delivering via drone in Iceland is really hard. To say that it’s windy there is an understatement. It makes me wonder if they didn’t invent the phrase “blown away”. But for all of the technical problems with weight, safety, weather, range, batteries, etc., the logistical problems of delivering by drone are significant enough that it makes me hesitate to think it will be a mainstream delivery mechanism any time soon.
Drones in Reykjavik are limited to four main routes, and all of them follow roads. The drones are not permitted to fly over people’s houses to get to their destinations – they have to fly over the roads to get there, and they can only deliver to front yards unless a house backs up to a road-accessible open space or another road. Only about one-third of the city is covered by these four routes, mainly because the drones must stay away from the local airport and its flight paths. Aha had to negotiate among five different local authorities – the airport, the aviation administration, the police, the fire department, and the local government. It took many months.
Initially, the company had to keep line of sight control over the drones, and if a drone was going to land, they had to have a handler on the ground to be there when it took off again. The line of sight requirement has since been lifted, but authorities were not going to lift the handler requirement. Aha had to design an airborne delivery mechanism to compensate – the drone signals the consumer via the retailer’s app that it has arrived. It does not land. It hovers. The consumer signals when they are ready to receive their order by typing a PIN into the app. The bottom of the drone’s payload opens and a winch lowers a bag containing the order to the consumer, who removes it and signals that they are ready for the drone to leave. Thus it never has to land.
There are still significant limitations on the drones – the weight they can carry, the range they get. But even in this limited application, Aha is finding that it’s more cost effective than cars (especially now that they don’t have to send a car and a drone handler out after every drone). However, from my perspective, this takes a lot of wind out of the blades of drone enthusiasts (ha ha). I get the business case. I have sat in traffic in Mexico City, New York, and London. Drones are the perfect solutions to those messes. But if Aha’s experience is in any way the norm, we’re a long way off from ubiquity.
My Next Steps
One, I’m going to see if it’s even possible for me to download AliPay (or if it has an English language version or if that’s even the app, since it’s really just a part of Alibaba’s mega-app). If you have any thoughts there, please do let me know! Two, I’m adding Vita Mojo to my list of things to see the next time I’m in London. Three, I’m going to continue to work with my Aptos colleagues to think about how we can keep on working on getting retailers to value data as a strategic asset. And four, I’m going to be grateful that of all the things my tech-minded teenage son is obsessed with, drones is not one of them.