Tech Forum: Amazon Web Services Dishes on Retail’s Tech Imperatives
While a smorgasbord of emerging technologies move from the edges of retail to the center, enormous hype and investments in virtual goods and platforms are injecting words like “digital collectibles,” “wearables,” “NFTs” and “the metaverse” into fashion and beauty’s lexicon.
In the heat map of modern retail, these areas are red hot — so much so that WWD hosted a dedicated metaverse symposium in Paris. But the virtual world is just one of myriad advancements taking retail to the next level.
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Steve Gurney, head of general merchandise retail at Amazon Web Services, broke down the crucial tech priorities for stores and brands at WWD’s virtual Tech Forum, in a presentation titled “Accelerating Retail Innovation in Fashion.” He also brought the receipts, going over numerous examples and covering themes from smart data strategies, machine learning, social commerce and augmented reality to future-forward conceits like ambient computing and virtual initiatives.
He started with a bit of context for the latest tech renaissance: Put simply, blame it on COVID-19.
“The pandemic has driven a lot of retail inspiration away from the usual places,” he said, referring to physical stores and even TV, print and outdoor ads. “When we had the various lockdowns and only essential stores were open, people couldn’t browse anymore. So we saw this shift of them seeking that browsing equivalent or retail inspiration through the digital channels.”
The thread tying it all together looks evident: Social media was already a font of “inspo” for all sorts of things, so it naturally drew would-be shoppers to its infinite scroll — especially as platforms packed in more commerce, brand partnerships and affiliate monetization for creators. Expanded tools like longer videos, livestream shopping and augmented reality also paved the way for the metaverse.
With these and other e-commerce effects, plus the eventual comeback of physical shopping, the cup of shopping data runneth over. It’s no surprise that retailers such as Zalando, Neiman Marcus and Tapestry would reexamine their data strategies, especially as cloud platforms like AWS could ingest an immense amount of information and pump out intelligence-driven features quickly.
German fashion e-tailer Zalando pulled different types of data to offer a “complete the look”-like feature. The company, which has run a personal shopping service for years, put together its customer and fashion data with looks recommended by designers, market trends and sales information from brands, then fed it into a model that would create outfits on the fly for its product pages.
“All of that will be built from their designer choices, plus also their knowledge of you, as a customer,” said Gurney, dubbing the experience “hyper-personalization.” The more the customer engages and interacts, the more Zalando learns about that particular person’s tastes and preferences.
The tech’s not restricted to websites either. Neiman Marcus put hyper-personalization to work in its department stores, as well as online. “They’re equipping shop assistants with the same kind of power,” he said, “but in a mobile device that they have on the shop floor [via] a clienteling app.”
Per Gurney, Neiman Marcus saw “tremendous” results, with “$3 million incremental daily sales over and above what they were getting before.” In the end, it pulled off a 2,500 percent return on investment, drastically reduced development costs by 90 percent and got to market in half the time. That could be just the beginning. With in-store shopping’s comeback, loyal customers may enjoy returning to the department store without sacrificing the convenience and intelligence they got used to online.
Efficiency motivated Tapestry as well. The Coach and Kate Spade parent had a great handle on historical customer data, but didn’t use it to power predictions, recommendations, pricing or demand forecasting. The company developed a data-driven Acceleration program in order to sharpen its focus on customers, as well as streamline and optimize the business.
The effort paid off. Tapestry sheared as much as 40 percent from its product range, while sending second-quarter global digital sales up 30 percent year-over-year, a threefold increase over pre-pandemic sales. As it beat pre-pandemic revenue by 18 percent and boosted its operating margin, the business clocked yet another likely benefit: With the changes, the company believes it can better navigate the gauntlet of supply chain issues that have been plaguing other brands.
Results like that are the culmination of years of development in AI, data intelligence and cloud computing. By contrast, retail’s fixation with the metaverse clearly belies its nascency in business — or infancy, in AWS’ view. But there’s no doubt that it’s growing.
Brands are already making great use of 3D tools, whether for AR try-ons or WebAR environments, like virtual stores. NFTs are all the rage, and companies are only beginning to discover all the uses, ranging from digital products to blockchain-based smart contracts, sourcing, authentication, virtual experiences and more. In the future, ambient computing and voice assistants will likely add to the AR or VR experience, as it creates even more opportunities for retailers.
The sheer scope of tech imperatives itself is noteworthy. As long-simmering advancements mature into real and fundamental tools for commerce, fashion continues its expedition into all things virtual. It’s a fascinating snapshot of a retail sector facing a period of great change — perhaps its greatest since the advent of the internet itself.
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