"Retail, as we know it today, is dead." That’s according to Thoryn Stephens, former chief digital officer at American Apparel.
And he should know; his ex-employer just filed for bankruptcy. For the second time.
"There's no shortage of data, there's no shortage of technology but there's a shortage of stakeholders who know how to use said data and technology," Stephens told the audience at WIRED Retail 2016 in London. And that’s a big problem.
Stephens’ interest stemmed from a business he ran during the evenings while studying molecular biology. With Google Analytics, Google AdWords and Salesforce he had a huge amount of data on his customers, but when he looked at traditional retailers he noticed very few were taking advantage of all this information.
"Ultimately the in-store experience hasn't adopted to the velocity we've seen in the consumer experience on mobile," he explained. A store opened in the early 20th century with electric lights, clothes and mannequins. Fast-forward to today and stores still have electric lights, clothes and mannequins. While little has changed offline, the internet has fundamentally changed how businesses interact with and understand their customers.
"There's tremendous value in taking your online knowledge and pushing it into your offline experience." At American Apparel, Stephens worked on a project to use RFID tags to track items around a store. An item left in a fitting room is the same as an abandoned shopping cart on Amazon, he explained. By using readily-available technology to collect the same data offline as you can online, the in-store experience starts to change rapidly.
"When a customer comes in you're able to understand who they are and what they've purchased previously," he explained. By deeply understanding each and every customer, just as Amazon or Google do online, physical stores and their employees are able to offer a better service. "They're becoming less store associates and more customer service reps."
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RFID tags could also be combined with smart mirrors to turn a fitting room into a stylist, Stephens explained. “You can then tailor and personalise recommendations based on whatever the user has bought into the dressing room," he said. Combine that with purchase history of that specific customer and you can do even more.
Then there’s chatbots. Another trial at American Apparel used chatbots to help shoppers browse through products. The bot was able to ask and answer simple questions and find where items were in stock. “They can tap their phone and get into a conversation about a product," said Stephens. To survive, traditional retailers need to change - and fast. "Ultimately, we as retailers need to adapt our current models."
This article was originally published by WIRED UK
