Retailers wishing to understand the key trends in retail technology – and more importantly, how they can engage with them – would be well advised to keep a close eye on the start-up scene. Start-ups have an uncanny knack of identifying a specific pain point or key trend and addressing that with laser focus. In her second article, Siobhan Gehin, managing director at Kurt Salmon, part of Accenture Strategy, looks at three more innovative concepts: Banter, Seashells and Gleem & Co, which have all emerged from her company's innovation accelerator, XRC Labs.
Theme 1: Customer service goes digital
Consumer expectations are being constantly elevated, as shoppers experience better, more personalised service in so many realms of their lives. Yet, one area that requires further attention is in-store customer service. According to a global consumer study from Accenture, just 52% of customers said that in-store interactions with sales staff met their expectations.
There is a plethora of technology solutions being developed to address this issue; some focus on providing better information and training to sales staff, others cater to customers who prefer to use their mobile devices for information rather than interact with a salesperson face-to-face. In fact, research from Mintel suggests that 45% of beauty consumers prefer to search for product information in-store on their mobile device rather than ask for assistance from a sales associate.
One of many start-ups catering to this trend is Banter, a Palo Alto-based start-up developing technology that enables customers to contact businesses over direct messaging channels (e.g. SMS). Using artificial intelligence and human agents, customers can make purchases and receive assistance in real time. The USP here is that it uses messaging platforms customers already use in their everyday lives, rather than expecting them to download the retailer’s app or go onto its website. And it can answer questions in "real" customer language, such as, "What time do you close tonight?" so that the interaction with the retailer becomes natural and personal.
Theme 2: Savvy shoppers hunting for the best deals
The savvy shopper is here to stay and many are finding innovative ways to cut the cost of buying the products they want. One area that is seeing huge growth and interest is cashback and gift cards. US start-up Raise has created an online trading platform for buying and selling unused and unwanted gift cards. With the US gift card market worth in excess of $125 billion annually, Raise has now attracted more than $80 million of investment.
Customers are learning that before buying on a retailer’s website, they can potentially save money by using a discounted gift card to fund the purchase. As is often the case with start-ups, a similar business model to Raise exists on this side of the Atlantic: Israeli start-up Zeek, which lets you buy and sell unwanted store gift vouchers, is focusing on the UK market and also raised $9.5million in funding. US-based Seashells has created a business that offers customers enhanced cashback rates on credit or debit card purchases when they use the cashback earned to buy retailer gift cards.
Theme 3: Luxury online
Luxury brands and retailers were relatively slow to embrace the "first wave" of the online boom. Now luxury etail is one of the fastest-growing segments of online retail, with global growth in excess of 14% per annum. And there’s a boom in second-hand vintage retail as well as online jewellery sales. One of the challenges of operating such a business is customer trust – how can a customer be sure they are buying the real thing and not a fake?
One start-up tapping into the rising demand for unique luxury jewellery pieces online, and tackling the trust issue head-on, is Gleem & Co. This is an online jewellery marketplace with a difference: selling seriously high-end, pre-owned jewellery (ranging from Chanel earrings for $125 to Edwardian diamond and sapphire earrings for $158,800), the whole experience is carefully designed to address the needs of the target audience (the older millennial looking to trade in jewellery for a newer piece). Peace of mind is provided by the in-house appraiser, who has "Master Gemologist Appraiser status, a title held by only 46 appraisers in the world".
With customers becoming increasingly demanding, and with competitors and start-ups raising the bar for customer focus, retailers face the challenge of engaging more with ever-demanding customers, online, on mobile and in-store. Connecting with start-ups, and staying abreast of developments in the start-up arena, is one way of doing just that.
XRC Labs invests in innovative entrepreneurs and start-ups in the retail and consumer goods industries, leveraging emerging technologies regardless of size. The selected start-ups also receive mentorship, education and access to potential investors and customers.
The Kurt Salmon team writes a regular column on technology in retail for Essential Retail. Click here to read Siobhan Gehin's previous article on start-ups in retail.