SXSW: Looking for the Next Trend in Retail

Transcription

1 SXSW: Looking for the Next Trend in Retail This week, we are attending the South by Southwest (SXSW) Conference and Festival, which is held every year in Austin, Texas. The technology component of the event is called SXSW Interactive and runs March Key themes and discussion topics at this year s technology conference include wearable technology, enterprise and smart data, entertainment and content, and health and medtech. Here, we summarize some of the most interesting panel discussions we attended, and highlight winners of the SXSW Accelerator competition along with a few of the innovative wearables we saw on display. DEBORAH WEINSWIG MANAGING DIRECTOR, FUNG GLOBAL RETAIL & TECHNOLOGY deborahweinswig@fung1937.com US: HK: CHN:

2 SXSW: Looking for the Next Trend in Retail This week, we are attending the South by Southwest (SXSW) Conference and Festival, a nine- day conference focused on the convergence of music, film and technology that is held every year in Austin, Texas. The technology component is called SXSW Interactive and takes place March Some of the themes covered in the Interactive segment include: 3D Printing Branding and Marketing Drones Fashion and Wearable Tech Fintech Gaming Health and Medtech Internet of Things Machine Learning Startups Virtual Reality/Augmented Reality Wearables Below, we highlight some of the most interesting panel discussions we attended and some of the innovative companies and products we learned about at SXSW Interactive. 2

3 PANEL DISCUSSIONS We attended a number of fascinating panel discussions on a variety of retail topics at SXSW Interactive. Culture: The New Currency of Retail Panelists: Ethan Song Co- Founder and CEO, Frank & Oak Rick Badgley VP of Retail, TOMS Robbie Myers Editor- in- Chief, Elle Magazine Lacey Norton Head of Retail, Kit and Ace The discussion started with Robbie Myers presenting a statistic: although e- commerce is a $340 billion market, brick and mortar is a $4.7 trillion market. The panelists argued that brick and mortar is here to stay and noted that even pure- play players are starting to open physical stores. The reason for this is that consumers today are still looking for a personal connection with brands, and e- commerce cannot deliver that. The leaders from the three retail brands represented on the panel Frank & Oak, TOMS, and Kit and Ace all presented a common vision: get your customers to buy into your culture and values, and they will become loyal paying customers. The speakers noted that brands are using their retail locations to organize events that gather the community around their cause. They are not really trying to sell their products during these events; rather, they are selling their culture. Rick Badgley referred to this as emotional ROI. The $5 Trillion Question: What s the Future of Retail? Panelists: Christopher Tate CEO, The Bailey Group Katherine Power CEO and Co- Founder, Clique Media Group Melanie Bender Senior Marketing Director, Westfield Michael Schrage Research Fellow, MIT Center for Digital Business 3

4 What will retail look like in 2025? That is the question that a panel consisting of retail veterans and one think tank leader set out to explore. Retailers are facing many challenges today, the panelists noted. Established retailers are racing to catch up with the incredible amount of technology that is required to compete in today s competitive market, while emerging brands are racing to achieve scale. In addition, customer behavior is changing rapidly, making the market more reactive than proactive. Michael Schrage said that instead of focusing on the future of retail, companies should really focus on the future of shopping. Retail is just one place that shopping occurs, Schrage said. The panel sees two main trends in the future: a stronger focus on customer experience and the improvement of personalization through machine- learning systems. Neiman Marcus Innovation Lab The History, the Memory Mirror, and What s Next Panelists: Scott Emmons Head of Innovation Lab, Neiman Marcus Kiel Werking VP of Partner Development, Reflect Systems Scott Emmons and Kiel Werking sat down at the Retail Innovation Lounge to talk about the Memory Mirror project and the process that Neiman Marcus uses to introduce innovation. You have to start at the basics, Emmons said. When we first started, our stores didn t even have reliable networks, so it was impossible to build any innovation in the store. Once the infrastructure was in place, Neiman Marcus started using a process to analyze all the innovation ideas that were flowing in. The company also encouraged its associates to provide ideas. One idea that emerged from the process was the Memory Mirror. The mirror, developed by MemoMi, takes pictures while a customer is trying on clothes and allows him or her to see how the clothes fit from all angles. It also allows the customer to easily share the image in order to get feedback from friends and family. The concept started in just three stores, but quickly grew in popularity and is now installed in 18 stores. It has received a lot of press from mainstream media as well as attention on social networks. Emmons said that the company really only focused on improving the user experience, and that the media exposure was the icing on the cake. 4

5 Neiman Marcus was not always so open about its internal projects and processes, Emmons said. The fact that I am speaking here today is really a testament to how far we have come as an organization, he noted. Future of Retail: Story and the New Paradigm Panelist: Rachel Shechtman, Founder, Story Rachel Shechtman presented her vision behind the unique retailing experience called Story. Unlike regular retail stores, Story is about using the retail space as a media channel. It operates more like a magazine than a typical retailer. For example, it has editors whose job is to curate content relevant to the story the brand is trying to tell. Also, it relies on a sponsorship model that dictates what will be sold and for how much. Shechtman, who jokingly says the demographic for the store is men, women and kids ages 5 95, claims that Story can make 10 times more on activities surrounding a product than could be made on sales of the product itself. Since the focus is on a given brand s story and not on its product, the company is able to sell luxury brands right next to more mainstream ones something that is frowned upon by most department stores. In addition, Shechtman holds special events for designers to come in and present their work to the community. These events not only enhance the Story brand itself, but also lead to discovering some great commercial opportunities. The store uses data extensively to analyze the performance of brands and make adjustments as needed. Also, the company makes sure the experience the customer gets cannot be replicated online. For example, it created an interactive table that dispenses Procter & Gamble products based on input from the user. It also features a Coca- Cola cooler that opens when a customer tweets a picture of it. No one needs more stuff, says Shechtman, so if we sell something, at least let s make it a cool experience. 5

6 SXSW ACCELERATOR Nearly 100 startups participated in this year s SXSW Accelerator pitch competition, representing enterprise and smart data, entertainment and content, health and wearables, the innovative world, payments and fintech, and virtual reality. Each startup had one minute in which to pitch its idea to the three judges in front of a large audience. The pitches were judged on a 1 20 scale in each of the following categories: creativity, potential, impact on the world, functionality and team. Here are the winners in each of the six categories: Enterprise and Smart Data Parknav provides real- time, on- street parking availability data to automotive, fleet, real estate and Internet companies. Its service covers over 70 cities 24/7 in the US and EU, and its customers embed this data into navigation systems, maps and real estate listings. Entertainment and Content PopUp Play creates experiences for kids that blend screen time with playtime. Kids use a tablet inside the store to draw their creations, and the company subsequently prints a live version of their work and ships it to their home. Health and Wearables MUrgency uses the power of mobile technology and networks to make emergency medical responses available to anyone, anytime, anywhere, with just one tap on a mobile phone or through auto alerts from sensors or wearables for high- risk patients. The Innovative World Rorus makes the Filter Pack, the first comprehensive solution for carrying and instantly purifying drinking water; it removes both biological and chemical contaminants. The product uses nanotechnology and a user- centric design to make extremely simple filters for humanitarian relief. Payment and Fintech Chroma.fund, a Techstars company, is a blockchain- based exchange for trading stocks and bonds issued by early- stage companies. Its software is also used by financial firms to build and trade software- defined exchange- traded funds. Virtual Reality Splash is an ios app that captures 360- degree video on a smartphone in seconds and enables its sharing on any social network as well as viewing in virtual reality. 6

7 WEARABLE TECHNOLOGY AND FUNCTIONAL GARMENTS Wearable technologies of all kinds were on display at SXSW Interactive. One new product that caught our eye was the Augmented Jacket designed by Birce Ozkan, an award- winning young wearables designer. The jacket is a smart and fashionable garment that includes navigational technology: the feathers on the shoulder ruffle up when the wearer faces north. Ozkan also designed the Fall, an interactive garment that mimics nature s responses through a hidden electronic mechanism. The dress loses its fabric panels over time, like a deciduous tree shedding its leaves. Although there is no practical application for the jacket s technology, it helps express the wearer s uniqueness and individuality. VESSEL is a series of garments specifically designed for the female body. Cutting- edge technology embedded in the fabric of these garments can monitor the actions and physical well- being of the wearer. The garment can change colors and use LEDs to alert the wearer based on different physical conditions. 7

8 Deborah Weinswig, CPA Managing Director Fung Global Retail & Technology New York: Hong Kong: China: John Harmon, CFA Senior Analyst GIL Dror Director of Operations HONG KONG: 10th Floor, LiFung Tower 888 Cheung Sha Wan Road, Kowloon Hong Kong Tel: LONDON: Marylebone Road London, NW1 6JQ United Kingdom Tel: 44 (0) NEW YORK: 1359 Broadway, 9 th Floor New York, NY Tel: FBICGROUP.COM 8