What innovation has been genuinely accelerated by the events of the last year? What are the changes for retailers that experts and investors agree will be permanent? These were two of the big discussions at our Innovation Acceleration event last week.
It’s always interesting – and hopefully instructive – to look at things from a different angle. To see ourselves, if you like, through the eyes of others. So when we were planning Innovation Acceleration (which took place online last week) I was keen that the attendees from leading retailers should hear not just from technology suppliers and sector commentators but also from an investment consultant charged with really identifying what’s seen as hot in retail right now.
Innovation Acceleration was a packed two and a half hours held over a weekday lunchtime with a mission to identify what retail innovations from the last year will stick, and also to connect leading-edge ReTech firms with forward-thinking UK retailers hungry for innovation.
We were joined by Archie Mason from True Global (a retail and consumer sector specialist Private Equity firm) who prefaced his dive into retail trends by saying that although many people are talking about the accelerating pace of change, what we are seeing right now (ie, what we have lived through over the last year and are still in the middle of) is exponential change. In part, alongside the timing of the pandemic, the accelerated convergence of several trends and technologies (IoT, quantum computing, 5G, Blockchain, VR, Robotics) has driven this.
Archie talked of consumers now “craving convenience” – with much higher screen time rates over the last year driving a massive upturn in eCommerce, and with increasingly limited attention spans, people have quickly developed a taste for a faster way of living. Retailers have had to put their supply chains under the spotlight, and also the last-mile piece.
But what’s especially interesting is the nature of this digital adoption, which is disproving previous views about what products sit “naturally offline”. The past year has seen a 52% increase in fashion purchases online and 50% in petcare, both of which, received wisdom has insisted for years, sit naturally instore not online. Well they say necessity is the mother of invention, and where people have been pretty much forced to try something, they’ve discovered that they’ve liked it.
Go direct or go home
Another of the huge winners from the last year is Direct-to-Consumer. I’ve recently written about this in detail so won’t dive too deep here, but just to say that Archie confirmed both the ongoing popularity of retail brands’ efforts in this area (Nike has stated its target of driving 50% of its sales through D2C), and the tantalising fact that an estimated 52% of consumers still haven’t ever bought ‘D2C’, so the potential remains huge.
One area however where this is extremely timely and pertinent is in Social Commerce where brands can sell directly via their social pages. This has been very popular in cosmetics and fashion especially. L’Oréal saw exponential success during the pandemic running what Archie termed Social ‘factories’ which processed an extraordinary amount of customer communications, many leading directly to sales.
Both Archie from True Global and our guest speaker from AWS pointed out the acceleration seen in livestreaming globally. Something that had for many years been more or less dismissed by retailers in Europe and North America as a near-exclusively Asian retail trend was given a platform by the pandemic, and consumers are now taking much more of an interest.
Livestreaming provides a unique, live, immersive experience that smart companies can tailor just as imaginatively as they would any live instore event or physical presentation. A Chinese livestream influencer called Li Jiaqi made records and headlines last year after selling 15,000 lipsticks in 15 minutes – underlining not only the popularity of the trend but the critical importance for retailers and brands of tying the livestreaming event to a robust, reliable and secure eCommerce platform.
Innovation everywhere
There was much more food for thought from Archie which I don’t have the space to go into now, but just to mark the cards of interested retail trend watchers – you could do worse than keep a keen eye on the rapidly developing fields of: video and visual search; next-gen tagging (“beyond RFID”); automation in last-mile delivery; 3D Printing and the role of ‘micro-hubs’; and data-led merchandising.
Last but absolutely not least from Archie’s inspiring presentation, he pointed out that mental health and personal wellbeing has very much come under the spotlight over the course of what has been a trying and stressful year for so many. And while he didn’t go into details around specific technologies or innovations, it’s well worth everyone in retail buying into the fact that mental health considerations are now very much out in the open for employees and customers alike.
The new face of digital customer engagement
Also treating event attendees to some high-quality insight around retail innovation was Steve Gurney from AWS. I very much liked how Steve framed the impact of the huge eCommerce uplift of the last year: “The money has gone online, but it’s good to see that the inspiration has gone online as well.”
Steve ran through a few innovative ways of presenting and selling goods. Virtual Stores may have been around for a while but over the last year or so have become easier, quicker and more cost-effective to do. Retailers can more easily refresh and update these Virtual Stores so they stay fresh and exciting, and offer compelling ways of showcasing offers and campaigns.
The rise of the cashierless convenience store may have Amazon Go as its ‘poster boy’ but it’s not the only example. Biometric contactless payment (for example, paying by palm scan) is just one way retailers and re-thinking and reinvesting in physical retail. And as noted at length in many retail articles, the rise in all things contactless is now irreversible, from contactless pay-at-pump to contactless grocery curbside pickup.
Steve also picked up on one of Archie’s points about the blurring between physical and digital – the distinction between physical and digital commerce continues to crumble, sped up by AR/VR and new instore tech. Co-op is one example of a major UK grocer who, seeing an upturn in shopping both instore and online last year, wanted the same Click & Collect capabilities to go into their convenience stores, and re-jigged their technology speedily and successfully to do so.
A great time to be innovating, after all
While there’s no making light of the disruptions that the retail sector has seen over the past year and the heavy price paid by some (Debenhams comes to mind) it’s nevertheless the case that change – albeit often enforced on consumers and retailers – has fostered an appetite for more change, for fresh ways of doing things. Added to that the injunction to do things differently (which often but not always translates as digitally) for the sake of safety, and you have fertile ground for innovation right now. Alongside, I should point out (with thanks to Archie), a keen willingness on the part of investors to put their money in consumer tech.
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Innovation Acceleration was presented by Hotwire Marketing, Retail in Detail, and the Retail Innovation Club, and supported by some of the leading-edge ReTech firms of the moment. My thanks to all involved for delivering the most insightful and inspirational lunchtime of the year. If you’re interested in finding out about some of the ReTech companies who were showcased at the event, you can read my follow-up blog here.