Meet the innovators building the future of commerce and challenging assumptions about the supply chain, from distribution to the shop floor. Our second annual WIRED Retail event, held at the St Pancras Renaissance Hotel in London on November 23, 2015, brought together experts and innovators from across the retail industry. To find out more about WIRED Retail and our other events, visit out events website.
Ocado delivers more than online groceries
Paul ClarkeDirector of technology, Ocado Technology
Most people think of Ocado as the people who drive cute home-delivery vans, the company's CTO Paul Clarke told WIRED Retail. What they may not know is that the company is developing humanoid engineering and warehouse-building robots, an AI to predict food orders, swarming bots to manage delivery and even robotic hands that mimic the human grip. "We are seen as a tech company outside the UK," he explained, discussing a new centre in Poland as well as the SecondHands maintenance android that learns its skills by watching human staff. Ocado, he said, is hiring increasing numbers of dedicated tech staff, as well as expanding globally, with the aim of putting online some of the world's largest bricks-and-mortar retailers. "If you're going to realise this vision, then you're going to have to pepper the planet with delivery warehouses. So it's worth inventing robots that can help you build and maintain them," Clarke said. "It's a new, scalable and logical way of building."
Ocado's AI is fed huge amounts of customer data. When this is passed in turn to autonomous delivery vehicles, connected home appliances and smart packaging, it will create a "smart grocery pipe delivering the right groceries at the right time without the customer having to order". "Online grocery retail is very different from other kinds of online retail, because we have to contend with multiple temperature regimes, product form-factors, short shelf-lives, crushables, food-tech segregation rules and so on," he said. "If you can do online-grocery retail, then you can do other kinds of online retail - but the reverse definitely doesn't follow."
The blockchain lets you trace sourcing
Jessi BakerCEO and founder, Provenance
Issues such as child labour and ethical sourcing make it hard for consumers to trust big brands - but the blockchain may be the solution, according to self-proclaimed troublemaker Jessi Baker, founder of ethical-sourcing consultancy Provenance.
The blockchain is a permanent digital record of any transaction or event, initially used to record bitcoin transactions. Baker uses it to bring information from supply chains to consumers, using blockchain technology to confirm a product is authentic, organic or not made in a country with poor human rights. "The blockchain is an amazing way of brokering and comparing open and accountable information about companies - even if production and operations are happening across the world from the point of sale," Baker enthused. "We are tracking fish, for instance - verifying them and committing them to an open data stream so that everybody in the world can see where that fish was caught, who bought it and where it ended up on the shelf."
Baker told the room that this sort of open monitoring could restore trust to brands. "A brand used to be a personal mark on a product back in the medieval village," she said. "The printing press led to advertising and a huge gulf between reality and perception. Now everything from shoes to crisps are claiming to be handcrafted and we're experiencing a crisis in brand trust."
Fully transparent brands such as Abalone and Outerknown can now feed information to the consumer's smartphone. "Some might even go as far as to say that in this hyper-connected world perhaps being more transparent is the new power," she said.
Our spending habits are written all over our faces
Ken DenmanCEO and president, Emotient
It's not quite Minority Report, but measuring the feelings of shoppers as they walk through a shop or experience new products may be the next big thing, Ken Denman, CEO and president of engagement and emotion-analysis firm Emotient, said.
Emotient uses software detectors, high-definition cameras and deep neural networks to measure subconscious micro-expressions that flicker across the face unconsciously - including joy, disgust, contempt and fear. In a recent detergent focus group, Denman told the room, Emotient accurately predicted which fragrance people would prefer simply by watching their faces. "Emotions start spending," Denman argued. "Since the beginning of time we've struggled to understand how people really feel. Hundreds of billions of dollars are spent every year trying to understand what customers think about products or the customer experience - and the reality is we've been guessing."
Denman demonstrated Emotient's engagement engine tracking people as they watched a risqué Super Bowl ad from a fast-food chain - understanding which elements brought out joy and disgust in men and women. "What has historically taken $50,000 or $60,000 and seven to eight weeks now takes four or five days and as little as $6,000," he explained.
Last-mile problems can be solved by earthbound drones
Ahti HeinlaCo-founder, CEO and CTO, Starship Technologies
It's the final mile in any online delivery that's holding e-commerce back, Ahti Heinla, ex-Skype chief technical architect and co-founder of Starship, said. And that mile costs the UK £300 million in wasted time and energy.
E-commerce amounts to just 15 per cent of retail spend in the UK - and eight per cent in the rest of Europe. A typical British household wastes about an hour each week on personal shopping trips. Reducing the cost of the final mile of delivery - currently between about £3 to £7 per parcel - could lower prices and boost efficiency, Heinla argued. His solution? A fleet of small, lightweight, autonomous delivery robots that eliminate the human labour and heavy vehicle cost from the last-mile equation.
Starship plans to launch in the UK in Q2 2016, with a network of automated hubs to store, load and charge the six-wheeled vehicles, each capable of carrying two shopping bags up to 3km within 30 minutes of an order. "Some people are putting their faith in drones, but I believe there are lots of unanswered questions," Heinla said. "From safety and regulatory barriers to energy efficiency and public perception. People don't like things flying over their back gardens, carrying other people's groceries.
Starship's robots travel on the pavement at 7kph to match pedestrian traffic, Heinla explained. Each robot's lid is locked to prevent theft, and can be opened only with a code texted to a customer's phone. GPS and a video camera should also deter potential thieves, he argued.
Starship does have a few regulatory hurdles to trundle over, Heinla said. "Local government does need to give permission for these things to go on the pavement," he explained. "But we have talked to many of them and they love it - these robots reduce congestion, reduce pollution and allow people to live longer lives, independently, at home."
Your customers' hobbies are key
Anisha SinghCo-founder and CEO, mydala
If daily-deals sites are going to survive, they need to differentiate more over values than price, said Anisha Singh, founder of Indian local-deals site mydala. Singh learned the hard way - she founded mydala in 2009 as a daily-deals platform letting offline merchants sell online, but struggled when well-funded rivals launched against her. "We were slated to die," she explained. "The only thing that saved us was understanding the user."
In India, that meant turning to ABC - astrology, Bollywood and cricket - to offer content, deals and tie-ins to tap obsessions.
Mydala began with astrology deals, then built online games to help launch Bollywood movies, before providing cricket coverage. The site also took inspiration from mobile banking in Africa to introduce phone payments and open up rural India, where credit cards are scarce - all of which helped pull in the site's current 36 million regular users in 209 cities.
Mydala now crunches the data it holds on shopping patterns to help merchants market at a micro level, down to snacking habits - by suggesting a local pizza restaurant offers a discount on certain days for some users.
Offering the right deals and the right content is key, Singh said. Because the sites are so busy acquiring new users, they forget their biggest champions are their existing customers. "Retention is much more important," she argued. "It doesn't have to be the coolest new tech that is going to get you the user - it's what you do when you get there."
Measuring footfall by satellite is more useful then sales figures
James CrawfordCEO and founder, Orbital Insight
Using drones and satellites to film shops from the sky can add to the bottom line, Orbital Insight's CEO James Crawford said. It's all about counting cars.
Using satellites, the firm can gather imagery from eight million km<sup>2</sup> of land - the size of the US - every day. It has used it to measure deforestation, city development and the fortunes of high-street shops. The addition of drones is about to boost that by a factor of ten, he explained. Using deep-learning AI neural networks, Crawford's team can record and analyse the number of cars arriving at a shop, and help retailers understand their shoppers or the benefits of targeted marketing. "Because we have six years of data we can look at weekly patterns," he said, flicking through satellite photographs of sprawling car parks. "Looking at the [Australian supermarket] retailer Coles, it turns out Wednesdays are their second biggest day. At first we thought this was a bug - but they have a ten per cent senior discount then." The US store Ross has a similar discount peak on Tuesday - Orbital Insight's tech now helps retailers plan and measure the effect of sales or promotions in near real-time.
Comparing similar stores - or aggregating the numbers for 50 key retailers at a macro level - enabled Crawford to compete with the predictions of Wall Street analysts. Measuring traffic to and from The Home Depot and rival retailer Lowe's over five years showed that the former was outperforming the latter - and allowed Orbital Insight to predict company results accurately. At the same time, grouping regional-store traffic allowed the team to prove it was bad weather and not online shopping that was hurting sales at physical locations over the winter of 2014. "Drones allow much higher resolution," Crawford added. "We can see people going in and out, understand if they've purchased something and where the best locations are - even in developing countries or China's new cities."
VR is your new salesperson
Henry StuartCEO and co-founder, Visualise
Imagine Jennifer Lopez as your personal shopper in a 3D virtual-reality Harrods where you're snapping up bargains with your friends - as avatars - on hand. Henry Stuart, CEO at VR production house Visualise, outlined this bold vision for the bright new VR-powered retail future. "Brands like Nike could have infinite stores that defy gravity, where Ronaldo or Wayne Rooney chat to customers," he suggested, challenging retailers to "think about what kind of virtual presence you want if not constrained by the real world."
Visualise has worked with travel agent Thomas Cook to produce "Try Before You Fly" holiday demos, allowing people to take virtual five-minute holidays. Stuart said this led to a 190 per cent increase in sales after a VR trip. Audi overcomes small city-centre showrooms lacking the space to show its full range by using VR headsets, where the company's designer talks to customers about various models and joins them on a test drive.
With big-name brands such as Oculus, Google, HTC and Sony all launching VR sets this year - and Apple apparently interviewing VR experts ahead of a rumoured launch - Stuart predicted 12m headsets sold by 2017, driven by gaming, but closely followed by entertainment and retail. "VR is an emotionally connected experience," Stuart told the room, recalling a trial where VR avatars caused users to become flustered by whispering. "Once you add haptic peripherals, you'll be able to pick things up and feel them - making shopping appear incredibly real." The next step, he suggested, could be a metaverse - a series of VR universes with virtual shops selling goods that simply couldn't exist in real life. "Why would you want to come back to real life," he asked - avoiding any mention of Second Life...
Fashions change, but we'll always need the real world
Robert GentzCo-founder, Zalando
The future of online is offline, Robert Gentz - co-founder of Berlin-based multinational fashion e-commerce site Zalando - told a packed hall. To deliver the best consumer experience, he explained, web-based companies need to embrace a real-world ecosystem - including expert consumer advice, real-world stores, phone chats and speedy delivery, ideally within three hours.
Zalando's stylists offer advice over instant messaging and customers click to order from their local stores in what he described as a fashion ecosystem. "If brands are connected to consumers, if offline and online are connected, an ecosystem can provide better consumer experiences."
After the company's autumn 2014 IPO, Gentz launched a group rethink, "Moving from operating as an online retailer to an online fashion company with an OS that connects the entire fashion world," he explained.
The Zalando OS allows customers to see, say, Pharrell Williams wearing a pair of trainers, identify them, browse the range and reserve a pair. Zalando can also arrange home delivery. "This is only possible through collaboration via an OS everyone is plugged into," he said. The company is investing in recognition software, collaborative inventory systems and last-mile delivery.
Gentz was confident, however, that his risks were low. "The fashion market is huge, and everyone uses it every day," he said. "No one has decided to not get dressed today. In ten years, I'm not sure if you'll still have a car, I'm not sure if you'll still have a phone - but I'm pretty sure you still won't be naked."
WIRED Retail Startup Stage
Representatives from each of the 17 growth-stage companies listed below spent nine minutes pitching in competition to the WIRED Retail audience of experts and investors. Congratulations to CommonSense Robotics, who won the judges over.
Louis Deane VISR VR Elram Goren CommonSense Robotics Yoni Nevo Cimagine Pierre Noizat Paymium Karoline Gross Smartzer Mohamed Haouache PopUp Immo Charles Lee Kontainers Miki Kuusi Wolt Christian Zigler Shopbox Danny Hawkins Quiqup Thomas Sheppard Presence Orb Peter Ellen Big Data For Humans Alexander Kayser yReceipts Marjorie Leonidas Taggstar Dominic Clark Tyres on the Drive Matt McRoberts Appboy John Garner Social Superstore
You can see all the Main Stage speakers at wired.co.uk/wired-retail-2015
Photography: Charlie Surbey
This article was originally published by WIRED UK
