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IBM and Melbourne Spring Fashion Week Brings Fashion Tech News
IBM, Official Innovation and Technology partner of Melbourne Spring Fashion Week, sees the continued fusion of fashion, retail and technology to provide customer focused solutions.
Forget what you think you know about IBM technology solutions.
A three-year partnership between tech solution provider IBM and Melbourne Spring Fashion Week (MSFW) sees the company move into distinctly more fashionable territory. Recently named the fashion festival’s Official Innovation and Technology partner, the pairing fuses fashion, retail and technology to provide customer focused solutions.
Speaking at the MSFW Industry Day, Keith Mercier, Global VP for Watson Transformation in Retail IBM, revealed the Australian findings of the 2014 Smarter Consumer Study and shed light on how technology and multichannel retailing can help businesses better understand their consumers.
The 2014 Smarter Consumer Study surveyed over 1,800 Australian consumers about their expectations of retailers. The results provide valuable insights into contemporary consumer desires and attitudes, indicating online shopping is now more prevalent than ever.
Major findings of the study found online shopping is up across all categories including luxury goods, consumer electronics, shoes, adult apparel, and home merchandise, with each segment experiencing significant growth since the same period for 2013.
Convenience is the primary explanation for the uptake in online shopping in all segments and consumer groups.
“Picking up the phone and calling someone is now too long. It’s a hassle. We don’t have time for that” says Mercier.
When applied to retail, that mentality can be industry-changing.
“Customers think ‘Maybe I don’t want to talk to you, I’ve already decided to buy it. I just want to check out and leave,’” he says. Fuelling technology solutions for both online and in-store is the simple fact that the onmichannel “retail marketplace is powered by technology.”
Other findings of the study indicate SoLoMo (Social, Location, mobile) is here to stay with 34 percent of consumers willing to share location-based information, compared to only 18 percent of consumers for the same period of 2013.
Consumers are still largely influenced by social media and the peer community, with the top key influencers of purchase behaviour being:
- Friends posts about items purchased (51%)
- Friends posts about retailers shopped with (48%)
- Retailers’ sale announcement via social media (42%)
Unsurprisingly, the survey found Australian shoppers expect a consistent retail experience and presume all channels should present a cohesive offering. Australian consumers expect the following major omnichannel capabilities:
- Price consistency across all channels
- Ability to locate items online and have them shipped to home address
- Consistent product assortment across all channels
- Loyalty program benefits
- In-store return of online purchases
Significantly, the research identified four main types of consumer segments. Trailblazers, the smallest consumer group are the most affluent and socially connected consumers. Aged 30-50 years old, this group is most likely shop online and places the most importance on omnichannel capabilities.
The 4 consumer segments identified in the are 2014 Smarter Consumer Study are:
- Trailblazers: 5% – Use SoLoMo extensively in evaluating retailers
- Tech-Intrigued: 18% – Use SoLoMo for browsing
- Transitioning: 39% – Use technology for research and browsing
- Traditional: 38% – Use least amount of technology while shopping
Other Key findings of the study:
- 64% of Australians have a smartphone
- Shoppers are less loyal than ever. In 2013, 32% of consumers acted as brand advocates, compared to 13% of consumers in 2014.
- General Information Australian Consumers are willing to share: Demographic (56%), Lifestyle (47%) and Personal ID i.e. name, address (21%)
- Information Australian Consumers are willing to share with trusteed retailers: Location (14%), Mobile Number (31%), Social Media Handle (15%) and Personal ID i.e. name, address (39%)
The major implications of the study results present three core strategies retailers can implement to better target the Australian consumer of 2014:
- SoLoMo can be used to energise the store experience – Consumers are willing to share location-based data, but retailers need to offer clear benefits.
- Consistent omnichannel requirements – Consumers are clear about their expectations and retailers need to implement a cohesive operation.
- Target the leading consumer groups – Trailblazers are socially connected consumers who are the most likely to shop online and are vocal about their omnichannel expectations. Retailers should use them as a benchmark for all omnichannel operations.
Describing the preferential value of the trailblazer consumer group, Mercier says “it has to do with convenience, personalisation and mobility. When it’s a bit older than millennials, it makes you realise there is a shift in consumer dynamics today that is not age or income related.”
Earning the title of MSFW’s Official Innovation and Technology partner, sees IBM implement some innovative technology solutions. Specifically, the real-time based ‘Shop-Hop’, which was used to great effect on the festivals opening night.
The digital strategy tracks real-time event buzz across social media platforms to measure festival hotspots, with the activity continuing to be monitored for the duration of the festival. The results will provide valuable data insights into this years festival activities and events, with the information presented to the City of Melbourne at the end of the festival.
“It’s about building social sentiment that’s happening over the course of the event. We can apply this to retailers in the future,” says Mercier.
The data will be used by retailers, sponsoring brands and event organisers next year to maximise the festival and offer a better visitor experience.
The applications of this strategy are far-reaching, with real-time data presenting accurate and realistic insight into visitor activity. The value of real-time feedback that is current and immediate allows for quickly implemented responses, which can benefit the customer and retailers alike.
“It’s measuring traffic and attention, which will enable them to maximise their event planning,” explains Mercier. “The same benefits can be passed to the retailer, which means they can measure real time activity to adjust product offerings to suit consumer needs.”
Providing a vivid example of how to capitalise on the study results to offer greater tailored online experiences, Mercier demonstrated the potential retail based applications of IBM’s artificially intelligent super-computer, Watson. Watson combines natural language processing, machine learning, and hypothesis generation and evaluation to provide technology based solutions to human problems. The potential of Watson is far-reaching, with possible applications in many industries.
“We believe [Watson] solves a lot of problems and meets a lot of customer expectations for self service. It’s engaging and you can engage with it in a very simple way. We believe that’s part of what consumers want when they’re shopping in store or online.”
Demonstrating the softwares application to the retail industry, Mercier presented a hypothetical styling app called “My Stylist”. The potential app uses IBM’s Watson to read unstructured content across social media, styling applications and the users input data to recommend personalised outfit ideas for the customer. Truly combining technology, retail and fashion, the potential applications of IBM’s super computer has the ability to transform the way average consumer live, think and get dressed everyday.
Using unstructured data gleaned from the internet or information input by the user, Watson has the potential to radically alter the online merchandising landscape.
As Mercier explained, “a retailer can decide how they categorise their merchandise in store, or the copy they use to describe their product that uses those words to better suit what customers are searching for when looking at styling ideas online.”
Proving to be a potential technology solution targeting the tech savvy consumer and tapping into their desire for effective, tailored and personal solutions, Watson can be used for a range of retail and user based solutions.
“We think it checks a lot of boxes. Ultimately we want it to be for the customer.” says Mercier.
Presenting real-time and personalised customers solutions, Watson is set to empower the user, which as Mercier says is crucial in 2014.
“Empowerment is where new brand loyalty lies. We all want to be empowered.”
Although, Watson sounds fantastic and time-saving, the software isn’t currently available as the styling app demonstrated by Mercier at MSFW.
“We want a retailer to work with us to develop it,” he explains. “We want it to be for the customer so we don’t want to do it on our own.”
With 2014 the first of a three-year partnership between IBM and Melbourne Spring Fashion Week (MSFW), the future may bring many new digital strategies. Continuing to fuse fashion, retail and technology to provide customer focused solutions, IBM’s Official Innovation and Technology partnership with the fashion festival is certainly one to watch.