Firing up technology
With Amazon Firefly linking ecommerce to the real world via smartphone and wearable technology poised to do the same, brands need to embrace the change with a clear retail strategy.
Last month saw the UK release of Google Glass, the search giant’s internet-connected eyewear, and the US launch of Amazon’s new Fire smartphone. Among the many much-discussed implications of these new technologies is the potential to bring online and offline shopping much closer together.
The Fire’s image recognition technology, known as Firefly, claims to recognise 100 million physical objects and has the ability to link a user’s snapshot directly to a relevant Amazon product page. Wearable technology such as Glass is making it easier for consumers to record anything they see on the move, presenting many of the same possibilities without the need to lift a finger.
But with so many other retail technologies taking off at the same time, are either of these high-profile launches really going to have any effect in the sector?
Paul Lorraine, UK general manager of leather goods brand Longchamp, does not regard Firefly as a direct threat to traditional retail. Instead, he sees it as part of a positive move towards the intelligent application of consumer technology. “It’s an evolution of customer needs and demands,” says Lorraine. “[Technology] enables us to give better service to customers.”
Chaten Uberoi, head of ecommerce at LVMH-owned shirt brand Thomas Pink, suggests that innovations such as Fire and Glass might prompt retailers to offer added value. “What will happen is that there will have to be an added advantage to shopping with a store, for example a loyalty programme or a free gift with a purchase,” he says.
Uberoi adds that Thomas Pink only works with a small number of resellers, such as John Lewis and House of Fraser, which gives the brand control over its pricing and means it is not forced to discount by online brands selling its products more cheaply.
However, Birds Eye marketing manager Cheryl Calverley says she is aware that more and more consumers compare prices on their mobile while shopping. “You can see people, particularly on big ticket items or multi-buy deals, price checking while in-store.”
As a result, innovations that facilitate this for consumers are inevitable, she says: “It is fantastic and it should be an opportunity for us as manufacturers to offer even more utility.”
Birds Eye already works with price comparison site MySupermarket.co.uk, which has 5,000 people using its app inside a store each day, totalling 20 per cent of its daily app use.
“We test different methods of communication with them and explore how we can trigger people to engage more closely with our products,” says Calverley. “A significant percentage of MySupermarket app use is in-store, so we know at that point they are considering switching either retailer or product, and it is at that point we are trying to test as many ‘interrupts’, offers and triggers as possible to ensure they complete the purchase with Birds Eye.”
This summer, the brand used mobile technology to promote its new range of premium meals, opening pop-up restaurants in London, Leeds and Manchester. People paid for their meal by sharing an image of it on Instagram. The activity saw 700 images posted and 3.5 milllion opportunities to see them on Twitter. “We had iPads on the tables to encourage people to tell us and the world what they thought about our food,” says Calverley. “It prompted the creation of lots of great content by real people.”
Longchamp and Birds Eye are also among a fast-growing number that are testing new location-based beacon technology. In July, for example, London’s Regent Street became the first shopping street in Europe to pioneer a mobile phone app that enables its retailers, which include Longchamp, Hamleys and Burberry, to deliver personalised content to shoppers. It is part of a £1bn modernisation programme by owner The Crown Estate.
Longchamp’s Lorraine says: “It really gives us a chance to engage with our consumers and I think anything that adds value to customers and enables more brand education is wonderful.” The brand will use the app to push notifications to consumers who have opted in.
“It’s not too intrusive as it is based on people’s preferences. If you are within 50 yards of a beacon in Regent Street and you have downloaded the app and opened it, you will receive push notifications when you are near a boutique that you have highlighted as a preference.”
But he says Longchamp is unlikely to use the tool for discounting. “It will be for product news and for promoting products, communicating new deliveries and colours, for example, but not as a discount tool – that just cheapens it.”
Innovating and implementing technological processes cannot be a secondary topic — it needs to be part of the company DNA
Birds Eye’s Calverley believes location-based triggers will open up “a lot of new avenues” for the FMCG brand too. “We are looking at conducting a test with Weve [the mobile marketing joint-venture between EE, O2 and Vodafone] to look at the opportunities around contacting people via their mobile as they enter or are close to a store, and whether we can use that to stimulate and inspire people to try a product more easily than using traditional in-store marketing. That is where we see a mobile specific strategy – closer to store.” Birds Eye will carry out the test with the top 20 UK grocers.
Using technology in-store also offers the opportunity to enhance both customer service and the over-all shopping experience. Thomas Pink has recently opened a boutique at Heathrow Airport’s new Terminal 2, partnering with mobile technology specialists Red Ant to integrate an interactive table that enables customers to design their own shirts using the Personally Pink service, or to watch short films on its brand channel Pink TV.
Thomas Pink’s Uberoi says: “Customers are able to design a shirt by working with a member of staff to input their fitting measurements and the style of shirt, as well as details such as their preferred cuff and collar styles and monogramming.
“It’s using technology to be more efficient rather than writing each customer’s measurements manually. The table allows them to see what the shirt will look like as it takes shape.”
The next phase, which is expected to launch early next year, will let customers track the progress of their tailored shirt via an app.
Later this year the retailer also plans to integrate QR codes onto its shirts. “People will be able to scan an item with their smartphone, bringing up a link to that product, showing a description with customer reviews and enabling them to make a purchase,” says Uberoi. “The idea, particularly at Heathrow, is that if someone is rushing because they have a plane to catch, they can scan the QR code and purchase it using their phone.”
With so many high-profile innovations and increasingly demanding consumers, brands are investing more heavily in technological research and development. At online fashion retailer Zalando, which is at present running tests on developing mobile image recognition technology for consumers, this is an area that is seen as integral to its strategy.
“When talking about technological innovations the main challenge is to give it the right priority within the company,” says Daniel Schneider, Zalando’s head of onsite customer journey. “Innovating and implementing technological processes cannot be a secondary topic – it needs to be part of the company DNA.”
It is not only young online businesses that are recognising the need for in-house innovation labs. Earlier this year, Tesco launched Tesco Labs, consisting of researchers, designers and developers dedicated to identifying future trends in retail. It also has an office dedicated to app development. Chief information officer Mike McNamara revealed on his blog this month that Tesco Labs has already developed a concept app for both Google Glass and the Samsung Galaxy Smartwatch.
“We think wearables will be used in more contextual situations, and have developed the app accordingly,” he says. “For example, if you’re at home and realise that you have run out of milk, you can use Glass to scan the product barcode and add it to your online grocery basket for home delivery.”
Perhaps the over-riding shift highlighted by the latest innovations from Amazon and Google is the move to a truly omnichannel retail experience. Longchamp’s Lorraine believes this will change the role of brands’ websites.
“Transactional sites will always be important but how they will integrate will be different going forward. For example, John Lewis has done a great job driving ‘click and collect’, and that will continue to evolve.”
Calverley at Birds Eye agrees that the lines between the online and offline worlds will continue to blur. “You will see online and offline become much closer and you will probably touch both in your shopping journey, whereas at the moment you tend to do one or the other.”
Clothing retailer Oasis is another example of this shift, having partnered with PayPal in 2012 to enable consumers to pay for goods via their mobile in store, using a unique barcode that shop assistants scan. Briony Garbett, head of customer experience and ecommerce at Oasis, describes it as “the obvious next step” in bringing together its omnichannel customer experience across multiple platforms, following the retailer’s introduction of 90-minute and nominated time-slot deliveries and mobile gift vouchers.
“We see customers exploring the brand on their mobiles in store, and we have also seen the number of email newsletters opened on mobile devices rise significantly. Mobile is seen simply as an extension of the website, ensuring customers can access the Oasis brand whenever and wherever they wish.”
Whether Amazon Fire and Google Glass go down in history as triumphs or failures, it is clear that consumer behaviour is changing, and brands must embrace the merging of channels with a clear agenda.
Viewpoint: Dave Bulman
Director of information technology, Virgin Atlantic Airways
We have recently completed a six-week trial of different wearable devices to see how they could assist in our interactions with customers in our Upper Class wing in the UK. We tried Google Glass, smart watches from Sony and handheld devices. We wanted to gauge how they assisted interaction with the consumer, and the end results were quite fascinating.
The interaction with consumers changed over time as people got more used to the technology and the novelty factor wore off. At the start, there was a mild preference for the smart watches – people saw watches as a relatively natural interaction. The novelty factor for Google Glass was huge at first but it actually slowed us down because customers wanted to try the glasses on and ask questions. But by the end of the trial, Google Glass definitely became the preferred choice as consumers got used to it.
Initially, there was some eye twitching as staff wearing it looked at the data on one side of the display but they got used to changing focus and were able to maintain eye contact with passengers while looking at the data.
We have decided to put Google Glass into production in our Upper Class wing in the UK.
For a lot of Upper Class customers, we send a limo to pick them up, and as the passenger arrives at the airport, check-in staff wearing Google Glass can greet them with, for example, “Hello Mr Jones, here is your boarding pass, your flight is on time and the weather looks good in New York.”
And if the passenger has any questions, for example if they have someone with them and they want to upgrade them, staff will be able to check how many Frequent Flyer points they have by referring to the data using Google Glass.
The next challenge is to work out how to identify someone we do not know, so we can go into the check-in areas and interact with people. We are trying a number of different things to see what is most effective.
We have trials going on with beacons and facial recognition, and we are doing interesting things with the use of Wi-Fi. It will either be something with a device that the person has on them, such as their phones, or another device that uses personal biometrics or facial recognition, for example, allowing a person to self-identify – but obviously that has to be with their permission.
As we start to crack that question we would look at integrating technology into economy check-in and other parts of the airport.
Whether it is Google Glass or Amazon Fire, or other handheld or wearable technology, how you use these devices to enhance customer experience will be transformative in the coming years.
Econsultancy Best Practice: Ben Davis
The words ‘I’ll just get it on Amazon’ have been a familiar refrain for consumers for two decades.
The convenience of Amazon’s one-click buying function, next-day Prime delivery and slickly synced mobile app all contrive to make it easy for the consumer to get anything cheaper online.
This quick adoption of using smartphone price checking in stores led to the term ‘showrooming’ – the practice of checking price and availability of a product on a competitor’s website while in store.
In the US, Amazon recently released Dash – a barcode-scanning wand that adds household items to an online cart on Amazon Fresh (a next-day grocery service being trialled in California and Seattle). One of the questions raised has been what would happen when this technology expands outside the home.
Barcode scanners have been around as apps for a while, but Amazon Firefly is different. Its visual recognition software recognises 100 million objects. And the customer experience is likely to be immaculate. One click of a button on the side of an Amazon Fire phone, one point at an object and the item can be added to your Amazon basket.
Do not underestimate how much slicker this is than, say, taking a photograph of a book and remembering to Google it when you get home.
If the functionality is good, one might expect Firefly to be the start of ‘showrooming plus’. The software developer’s kit will enable retailers to add functionality to their own Fire apps, but the more pressing question is how do retailers prevent showrooming.
If Amazon continues to refine its shipping offer, showrooming could become a threat as ordering online becomes a same-day proposition in cities.
So what can be done to combat the Firefly threat?
- Create unique products – limiting distribution will stop consumers finding items cheaper online.
- Improve the experience and service in store – high fashion excels in this. Buying a suit in-store at Paul Smith is more fun than buying it online.
- Encourage mobile web use with free Wi-Fi and promotion of your app or mobile site. Foyles 107, the flagship bookstore in London, provides free Wi-Fi with an inventory search web page, helping to keep the customer focused on the store.
- Price-match – it is not for everyone, but Best Buy has previously price-matched Amazon in the run up to the holiday season.
- In-store tech – inventory information and availability, virtual rails, social media integrations. None of these tactics are perfected but the aim is to keep the customer in the brand experience.
- Reviews in store – social proof is important. A store in China is displaying Facebook likes on individual products, so consumers know the popularity of particular items. This is extreme, but the motivations are sound. Highlighting positive reviews of your store experience on a store finder is also a good idea.