Think Tank: Key Trends Driving Pervasive Intelligence in Fashion

In recent years, traditional retailers have been upping their game. After a wave of unprecedented disruption — driven by online-only brands that offer unparalleled convenience and choice — chains with a large physical presence have been thinking again about what they stand for and how they can succeed, rediscovering an essential attribute: their purpose.

That clearly defined purpose differentiates a retailer. It determines what value they are offering to a consumer, how they sell and even how they operate. The purpose is not only essential to reach the consumer and motivate employees, it may also benefit the bottom line. Our recent study found that consumers who scored retailers higher on purpose spent 31 percent more than consumers who scored retailers lower.

For some of the most dynamic brands, the priority has been to find new ways to engage consumers in their stores. The most successful are creating a new blended retail proposition, which takes the best of the digital and the physical and mixes them to forge powerful and much stronger connections with their customers. In doing so they are making a clear declaration of who they are, and what they are here to do — and that customers can trust them to provide not simply what they want, but what they desire.

This year’s Accenture Technology Vision reflects this new imperative. As technology extends deeper into everyday lives, it shows how leading companies in every industry are moving beyond providing products and services. They are creating new affiliations with businesses across industries who share their vision and mission, and they are using these new partnerships to invent new products and services that meet the goals of their customers. Employees, in doing so, are achieving new levels of growth and differentiation.

The trends in this year’s Technology Vision will each have critical implications for retailers. We examine them below in the context of today’s (and tomorrow’s) fast-changing retail landscape:

Digital-physical: stores fight back

One thing’s for sure: bricks-and-mortar stores will, in general, become smaller and fewer in number but also more impactful. Connectivity and digitization are allowing these retailers to blur the boundary between their “brick” presence and their “click” activity. By turning shopping into an immersive experience, they can bring customers closer to the brand. Shopping remains a social sport and consumers like the physical-digital experience. However, without a clear purpose, foot traffic will decrease, and a store may well turn from an asset to a liability.

Some examples of immersive experiences found in the fashion apparel segment are around touch screen “smart mirrors” as well as digital self-checkout. Smart Mirrors can recognize the items customers bring to the fitting room via RFID and suggest ways to style them. And it’s not just personalization that promises to enhance the in-store experience; at one fashion brand, customers can use a digital self-checkout that automatically recognizes their chosen items — no scanning necessary.

Introducing innovative technology to physical stores can also assume more tangible qualities. For instance, in the San Francisco Bay Area, Lowe’s is rolling out a customer-helping robot into the aisles of 11 stores. And convenience store chain 7-Eleven became the first U.S. retailer to pilot drone delivery, with a trial that dispatched orders via drone to customers from one of its Reno stores.

Bridging the divide between digital and physical

To create a shopping experience that gives consumers the seamless, personalized experience they crave — traditional fashion retailers are also changing how they think about their systems. Point of sale is rapidly becoming “point of service,” where every customer interaction is tightly integrated across shopping carts, sales history and returns, and then “crunched” by AI. To support this new world, retailers are looking at their choices of technology in new ways. Take high-value, low-volume retailers as an example; several are looking into pre-integrated software-as-a-service models.

Conversely, lower-value, high-volume retailers are exploring a platform approach and wide use of open-source solutions. Regardless of the strategy, integrating the various consumer touch points will be the norm. Consumers expect seamless interactions and the retailer will be able to gain a more realistic view of the how the consumer shops with their brand.

There is one caveat to all of this new information about consumers; the responsibility that comes with knowing. All organizations should be sensitive in the way they use data to personalize experiences. There’s a fine line between convenience and intrusion: what might seem to the retailer like a valuable way to get to know the customer may seem creepy to that customer.

The frictionless business

Every company is now a tech company, and nowhere more so than in retail. The impact: retailers’ IT must be reorganized accordingly. That means incorporating agile methodologies at scale (e.g. SAFe), developing multimodal IT that can run at different speeds, and making full use of DevOps and the cloud. Balancing investments for managing legacy systems and modernizing them whilst building the next generation agile platforms is vital and it requires a “multispeed” IT design.

These shifts will help retailers refocus on delivering “solutions” via their products, perhaps using common platforms that others have developed. But replacing longstanding wholesale models will require taking some radical steps away from legacy technologies: creating flexible and responsive integration through the adoption of serverless computing and microservices.

The Internet of thinking: making friends and innovating products

For the consumer, physical retail needs to feel like it’s backed up with systems that are as quick and nimble as those used by online retailers. This is why leading retailers are increasingly thinking like tech companies, engaging the broader ecosystem and adopting the latest agile systems and thinking.

What does this mean? It’s about becoming more responsive to market shifts and consumer trends because the business model and IT architecture make it easy. It’s DevOps and the cloud, microservices and common external platforms, tech-driven partnerships and an ecosystem approach. It’s not monolithic legacy systems and processes, and it’s not proprietary information.

Without the scale of an Alibaba or an Amazon, retailers will often team up with partners and share services, data and assets. Forming partnerships with other businesses will give brands new capabilities that keep them at the cutting edge of retail — and at the forefront of customers’ minds. These new partners could be tech firms, delivery companies or even direct competitors. Building new affiliations with businesses across industries will free retailers to innovate new products and services that meet customers’ changing expectations.

Conclusion: From emerging trend to business as normal

As technology extends ever deeper into our lives, progressive retailers are finding new ways to attract customers away from online pure-plays. But making those connections count relies on using technology in a smart and responsible way. Equally, it relies on creating new affiliations with businesses across industries to invent new products and services that meet the ambitions of customers and employees. If brands get this right, customers will realize that traditional retailers can offer them the best of both worlds.

Jill Standish is senior managing director and head of Accenture’s retail practice and Vish Ganapathy is managing director and retail technology lead at Accenture.

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