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Catalysts
of Change
Retail and Technology
in the Age of Disruption
In partnership with
Contents Introduction / 3 Chapter One: The Age of Disruption / 5 The role of the human redefined / 8 Chapter Two: The Retailer View / 9 Where do retailers seek guidance? / 10 Which technology will transform retail? / 14 Payment innovation / 16 The rise of the chatbot / 16 How big a bet are retailers making? / 21 Chapter Three: Driven by Data / 22 Chapter Four: The Customer Data / 27 Discovery / 28 Purchase / 31 Post-purchase / 34 Chapter Five: Conclusion / 36 Chapter Six: Partner Comment / 39 About Qubit / 42 www.qubit.com
Introduction
3
Disruptive technologies, such In this guide, in association
as artificial intelligence, the internet with Retail Week, more than 70
of things, big data and robotics senior retail executives in the UK
are on a collision course that will have shared their perspectives
create huge future opportunities and priorities when it comes to
for retailers and brands. disruptive technologies. We asked
them about:
But this future is not as far away
as we think. New business models ►► The innovations affecting their
are already disintermediating business
traditional retailers, particularly
when it comes to owning the ►► The potential – and limits
relationship with the customer. – of artificial intelligence
Subscription services and ►► The impact of machine
self-replenishing smart appliances learning
are bypassing retailers entirely,
on the premise that convenience ►► Investment in new
is king. technologies
And when it comes to creating ►► Collecting and using
hyper-personalised experiences, customer data
social media platforms are streets
ahead, delivering this every day Read on to understand how they
for their millions of users and plan to leverage each of these areas
for the brands that are willing to drive efficiencies, differentiation
to pay for the privilege. and, ultimately, influence their
customers at scale.
www.qubit.com
Chapter One:
A
The Age of Disruption
5
Disruption has Shop Direct, a business that
a decade ago depended on
undoubtedly been catalogues – its main sales channel
the buzzword for 80 years – for 65% of its sales
of the decade. was an early mover, ditching
paper and focusing on areas such
Industries that have not just existed as personalisation and artificial
but thrived for centuries have been intelligence for growth.
upended by technology-driven
innovation. Upon revealing Shop Direct’s stellar
results last October, chief executive
The powerful combination Alex Baldock said: “2016 was our
of smart technology, human first full year as a pureplay etailer.
insight and digital innovation
is already impacting retail. “Removing the shackles of the
Technology that decades ago catalogue has been liberating, and it
seemed like science fiction has allowed us to invest in the areas
is now a reality and an integral that matter most to our customers
part of the shopping experience. – making their shopping experience
easier and more personalised,
Artificial intelligence, virtual reality, particularly on mobile.
augmented reality and mobile
payment are becoming increasingly “This was the year our investments
mainstream, and retailers are in technology really started to
realising they cannot rely on pay off. We’ve made big strides
sticking to tried and tested methods in m-commerce, big data and
to attract digitally savvy customers. personalisation.
“But there’s a lot more to play for
in these areas. In particular, we
We’ve made big believe that artificial intelligence can
strides, but there’s change the game for us in data and
a lot more to play for. personalisation. We’re deploying it
already and are serious about going
We believe that artificial
much further.”
intelligence can change
the game for us in data
and personalisation.
Alex Baldock, chief executive,
Shop Direct
www.qubit.com
However, not all retailers are ready
to embrace this change. Adopting
a digital-led strategy means
adapting to a fast-paced, frenetic
world where companies embrace
a fail-fast mentality.
Paul Kendrick, deputy managing
director at home shopping
department store Express Gifts,
is amid a digital transformation
programme and explains how
fast-moving this new world is.
“The old catalogue world was one
where everything was planned out
six to eight weeks in advance,” he
says. “It’s now about applying much
more of a current trading mentality
to things.”
7
Not responding to new technology
and innovation could have
consequences. On the cusp of
the latest wave of technological
advancement, Dixons Carphone
chief executive Sebastian James
told delegates at Retail Week
Live 2016 it had the potential
to overhaul retail and “bump
off” some businesses.
“This new shift – just 15 years after
the last [the internet] – is going to
bump off as many retailers as the
last one. This is a total asteroid strike
at the heart of everything that we
thought we knew,” said James.
The role of the
This new shift is human redefined
going to bump off The balance and relationship
as many retailers as the between man and machine will
last one. This is a total come to dominate the news flow
asteroid strike at the heart as automation begins to take root
across every industry, not just retail.
of everything we thought
we knew. The central question is how to
achieve the right balance between
Sebastian James, chief humans and machines working
executive, Dixons Carphone together to optimise outcomes and
solve the problems facing industry.
Striking this balance will involve
many political, economic and social
considerations given the seismic
impact automation is going to have
on the current status quo.
www.qubit.com
Chapter Two:
R
The Retailer View
9
We live in an age Where do retailers
of innovation, seek guidance?
when new so-called Many retailers are looking at
ground-breaking pioneering brands such as Amazon,
John Lewis and Shop Direct to help
technology is determine the direction of travel
developed every day. and identify which technology
is here to stay.
For retailers, a major challenge lies
in sorting the truly transformative Express Gifts’ Paul Kendrick says
technology from the noise in order of Shop Direct: “It’s a huge
to invest in the inventions that will turnaround and very much seen
help to boost the bottom line. as an online, data-driven and
personalisation-focused company.”
In addition, an overwhelming
number of suppliers, not to Meanwhile, he says Amazon is
mention a confusing amount one to watch because of how
of technical jargon, adds to this easy the online giant makes
difficulty of knowing where best it for consumers to buy.
to channel resources.
“I think that almost creates a
It’s a difficult job. Take Google complete loyalty and lock-in, and
Glass. Developed by one of the price becomes secondary,” he says.
world’s biggest innovators and
accompanied by unprecedented
levels of investment and PR, the
technology was heralded as a
game-changer for retail. Tesco,
the UK’s largest grocer, launched
a shopping app for the device just
days before Google withdrew the
device from sale.
www.qubit.comTesco launched a
shopping app for Google
Glass just days before it
was withdrawn from sale
11Retailers are also looking outside Once they placed their fifth bet,
of the sector to gain inspiration. they were asked if they wanted
Shop Direct keeps a close eye to customise their homepage
on what is happening in the online to their favoured sport. This move
gambling and gaming sector, and led to a 10% increase in betting
chief executive Alex Baldock told activity post-personalisation, when
Retail Week he was looking to compared with those customers
hire personnel from these sectors, who chose not to personalise.
which he said were “much further
ahead when it comes to data”. And Shop Direct is not alone
in looking outside its immediate
Ladbrokes, for example, competition. “We look at lots
has developed a proprietary of companies. We’ll look at our
recommendations engine that competitors, but we’ll also look
identifies users who consistently at luxury retailers because, although
place bets on one type of sport. we produce business cards, we’ve
created a strong brand,” said
Cathy Berman, VP of international
marketing at Moo.com
www.qubit.comMayank Shukla, head of ecommerce
at gardening retailer Crocus.co.uk,
insists that customers – rather than
peers or competitors – have to be
front-of-mind when introducing
new technology. However, he
Q-Flowers
admits that tech giants such as
Google and Amazon are changing Clmatis
customer expectations.
“People want to search for things
as fast as Google does, and they Search for "Clmatis"
expect that kind of search on every
Showing results Search instead
website,” he says. “So we had to for Clematis for Clmatis
evolve our website and we had
to implement technologies so that Total results: 124
the search was relevant, fast and
had auto-correct and spellcheck,
and all those kinds of features that
customers expect to be standard.”
Clematis Kakio Clematis Hy
People want to
search for things as
fast as Google does, and
they expect that kind of
search on every website.
Mayank Shukla, head of
ecommerce, Crocus.co.uk
13Which technology will
transform retail?
When it comes to which
technologies will make waves in the
future, the internet of things ranked
highly with retailers. According to
Retail Week’s exclusive research,
56% of retail executives said it
80bn
conn
e
would have a disruptive effect devic cted
es in
on their businesses. world the
acco by 2020,
rd
Electricals behemoth Dixons’ Frost ing to
& Sul
merger with mobile phone giant livan
Carphone Warehouse in 2014 was
driven by the belief that the internet
of things would revolutionise retail.
Carphone Warehouse founder Sir
Charles Dunstone said at the time:
“If you only have stores selling
mobile handsets, or only have
stores selling fridges that talk,
but have no idea how to connect
them, then you’re missing the point
for customers.
“We want to anticipate the needs
of customers who live in
a connected world.”
Consulting firm Frost & Sullivan
predict that there will be 80 billion
connected devices in the world
by 2020. And at the Consumer
Electronics Show in January,
Samsung Electronics president
and chief executive Yong Sung
Jeon said that every product his
company developed from 2017
onwards would be smart.
www.qubit.comWhich technological innovations
do you think will have an impact on
how you do business in the future?
56% Internet of things
48% Payment technologies
42% Virtual assistants, chatbots & conversational commerce
42% Machine learning
40% Location based services
40% Virtual reality
38% Cross device technology
16% Augmented reality
Peer to peer technologies 6%
15Payment innovation
With mobile traffic now accounting While many retailers, including
for 40% of all commerce sales in Marks & Spencer, Boots and New
the UK, and some retailers seeing Look, accept and promote Apple
up to 90% of their traffic coming Pay as a payment method, the UK’s
from mobile, getting payment largest retailer, Tesco, has opted
on this platform right is key. to develop its own platform.
Some of the biggest returns The grocer has launched PayQwiq,
can be made by streamlining an app that stores debit card and
the checkout process. Tesco Clubcard details and allows
payments of up to £250.
Emerging mobile payment
platforms such as Apple Pay
and Google’s Android Pay, which
allow shoppers to pay with the The rise of the chatbot
tap of a smartphone, are starting
to gain traction. Virtual assistants, chatbots and
conversational commerce are
Apple chief executive Tim Cook also tipped to make an impact
revealed that Apple Pay transactions by 42% of retail executives – the
jumped nearly 500% year on year same percentage that predicted
in the final quarter of its 2016 machine learning would disrupt
financial year. their business.
Meanwhile, more Apple Virtual assistants are growing in
Pay transactions popularity. In fact, Amazon said its
were completed in Echo and Echo Dot speaker devices
September 2016 than – in which virtual assistant Alexa
the whole of 2015. is integrated – were its top-selling
products last Christmas.
Alexa can carry out orders such
as controlling lights and playing
music, as well as ordering products
from Amazon.
www.qubit.comAmazon's Echo Dot devices
were among its top-selling
products last christmas
17Meanwhile, Dyson has launched
Almost every product a new research and development
facility in Singapore dedicated
can benefit from AI
to integrating artificial intelligence
– everything that you see technology into its products.
in a room needs artificial The electricals brand has
intelligence. invested $412m (£337m)
in the research facility, which
James Dyson, founder, Dyson opened in March 2017.
Speaking at the launch event,
founder James Dyson said: “Almost
Meanwhile, retailers are using every product can benefit from
chatbots – computer programmes AI – lighting, purification, cleaning
designed to simulate conversation — everything that you see in a room
with users – to service customer needs artificial intelligence.”
needs.
Meanwhile, machine learning
Retailers including H&M, Burberry – a type of artificial intelligence
and TK Maxx have used chatbots on that provides computers with
social platforms such as Facebook the ability to learn without being
Messenger, while Shop Direct has explicitly programmed – is tipped to
integrated conversational artificial have an impact on the retail sector
intelligence technology on flagship by 82% of the retailers surveyed.
brand Very’s mobile app to answer
customer queries in real time. Already, nearly half of those
surveyed (48%) use machine
These companies are not alone. learning in their business.
According to our study, 38%
of respondents are already Half the respondents said they used
implementing AI in their business. machine learning to drive sales
and anticipate demand, compared
Outdoor brand The North Face to the 46% that utilise it to offer
is working with a tool called personalised promotions and
Fluid Expert Personal Shopper, understand customer behaviour.
powered by IBM’s Watson cognitive
computing technology, which More than a third (38%) of those
enables users to have more intuitive surveyed use machine learning
search experiences thanks to its to target customer segments,
natural language capability. while just 4% use it to assess their
competitors in the industry.
www.qubit.comDo you think machine Online supermarket retailer
learning will have impact Ocado uses machine learning
in the Retail industry to cope with vast amounts
of emails. The model identifies
No 18% whether the email contains
general feedback and the
customer is happy, allowing
Ocado to prioritise responses.
Meanwhile, Chinese retail giant
Alibaba uses machine-learning
Yes 82%
capabilities to better understand
its users’ likes and intentions.
The technology can build
comprehensive shopper and
Do you use machine seller credit systems and valuation
learning in your models, so much so that robots
business? now handle 95% of the customer
service on China’s biggest
No 52%
shopping event, Singles’ Day.
“We’re running some trials
later this year with machine
learning and AI for conversion
optimisation prompts on the site,
Yes 48% based upon different consumer
behaviour,” says Gareth
Rees-John, global digital
director at Topman.
Do you use artificial
Intelligence in your
business?
No 62%
Yes 38%
19How much budget have you allocated for the
introduction of new advanced technologies?
25
22
20
20
15 14
12 12
% of companies
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www.qubit.comHowever, for some businesses, How big a bet are
the technology is still too early in retailers making?
its development to be put to use.
It is clear that retailers are placing
Jonny Stewart, head of digital their bets on the technologies they
experience at beauty brand Elemis, believe are taking off, but just how
says: “I don’t think it’s mature big a chance are they taking?
enough for us yet. We still, at
this stage, would rather have our Investment is modest for the
customers talking to a person who majority of firms surveyed by Retail
can give that excellent level of help. Week: 82% of retail executives were
set to invest less than £1m into
“I think there’s a lot of things people introducing new technologies,
are doing well with chatbots along with almost a quarter (22%)
the lines of simple Q&A – you just investing less than £50,000.
see too many bad examples of
people trying to go too far and However, 14% said they planned
it becoming annoying rather to spend between £1m and £5m
than an actual service,” he says. and 2% vowed to invest more
than £10m.
While chatbots and artificial
intelligence may not be a priority
for all retailers right now, major
retailers are investing heavily
to gain a competitive edge
as the technology matures.
There’s a lot of
things people are
doing well with chatbots
– you just see too many
bad examples of people
trying to go too far and it
becoming annoying.
Jonny Stewart, head of digital
experience, Elemis
21Chapter Three:
Driven by Data
www.qubit.comTechnological “I love machine learning and
artificial intelligence, but machine
disruption in retail, learning can only be as good
and beyond, is set as we make it,” says Mayank
to become more Shukla of Crocus.co.uk.
amplified in years “There’s billions of terabytes
to come, meaning of data that retailers are collecting.
retailers need to “How we actually use that in two
think about the or three years’ time is going to
be fascinating and will ultimately
way in which their be driven by customer needs and
employees and expectations.
customers engage “From Crocus’ point of view, the
with the machines data that we have been collecting
will be the key in finding the right
predicted to triggers for the customers to make
drive growth. a purchase.”
To get the most out of this new Managing and collating the data
technology, retailers need to have put into the machines is vitally
the right infrastructure in place important, but an area many
to collect the data that feeds it. retailers struggle with. While it may
look impressive to invest in flashy
In fact, when asked where AI upfront, it is the back end
investment in new technology – in terms of customer data
would be directed, the majority – that has the real impact.
of retailers (56%) said in their
workforce rather than in the
technology itself.
Thankfully, therefore, the majority I love machine
of retailers (70%) believe they have learning and artificial
the right digital skills internally to
intelligence, but machine
respond to the threats posed by
disruptive businesses. This expertise
learning can only be as
will be critical to get the most out good as we make it.
of the technology that threatens
to disrupt the sector. Mayank Shukla, head of
ecommerce, Crocus.co.uk
23Just over a third of executives
(34%) questioned said they
had a multichannel analytics
strategy that defines how data
was collected.
Meanwhile, nearly a quarter (24%)
said they had no customer data
strategy, but recognised the need
for one, while 8% said it was not
a priority right now.
“We can spend an awful lot of our
time just making data connections
and trying to make things work,”
says Tony Rivenell, chief data
officer at Halfords.
“Technology, for me, is removing
a barrier.
“If we can just get to a point where
we’ve got access to the data and
it’s usable, then we can make quick
and informed decisions about
what we do next. That’s when
it becomes useful.”
56%
For Paul Kendrick, who joined
home shopping retailer Express
Gifts as deputy managing director
just under a year ago, one of the of retailers said investment
biggest challenges was pulling in new technology would be
made in their workforce rather
the data siloed throughout
than on the technology itself
the business together to create
a single customer view.
“We know what they’re buying
and when they’re buying it. Taking
all these bits together, we can
improve the service we’re offering
customers,” he says.
www.qubit.comHow are you using
machine learning
in your business?
46%
Offer highly accurate
individualised promotions
38% 46%
Targeting customer Understanding
segments customer behaviour
50% 4%
To drive sales and Assess the existing
anticipate demand competition
25However, it is not just about having promoting televisions to them,
the data all in one place – it is about but they’ve actually gone and
using this data in the right way. bought a new one in Currys
at the weekend. Therefore what
Kendrick believes staff need to we start offering is irrelevant.”
make a judgement call on whether
there is a risk that use of data could Kendrick says staff need to think
be off-putting to customers. about what is right for the customer
at all times to prevent technology
“There’s still a lot of stuff about moving from a sales driver to an
our customers we don’t know. annoyance. This is where man
They may have been looking for overpowers machine.
televisions with us and we keep
Do you have a strategy to define how customer
data will be collected and used across the business
No it is not a Yes a multichannel
priority right now analytics strategy
No but we need to
recognise the need for one 8%
34%
24%
Yes but our data is siloed 34%
across the organisation
www.qubit.comChapter Four:
C
The Customer Journey
27The customer
journey was once Stitching up all
the data from all
fairly linear, but
the different touchpoints
the rise of new with the consumer
technology is is the biggest single
altering the way challenge a multichannel
consumers discover, retailer faces today.
explore, purchase Gareth Rees-John, global digital
and engage director, Topman
with brands.
The new path to purchase cannot
be easily summed up in a few
words because it is highly personal
Discovery
to each consumer. Nonetheless, How shoppers discover brands or
the vast majority of consumers hit products can be a very complex
certain milestones along the way. process that involves extensive
internet research, touching and
“Stitching up all the data from testing a product in-store and
all the different touchpoints with reading reviews online.
the consumer is the biggest single
challenge a multichannel retailer However, new technology is adding
faces today,” says Gareth more potential routes of discovery.
Rees-John, global digital director In fact, 46% of the retail executives
at Topman. questioned said this stage of the
customer journey was ripe for
“Visual search, voice search disruption.
– all these things are changing
the way a brand has to interact There are already myriad new ways
with a consumer.” to find product through technology,
be it through aggregate sites, voice
search tools including Alexa, social
media platforms such as Snapchat
or Instagram, blogger or vlogger
websites and even through third-
party apps such as Grabble.
www.qubit.comDescribed by some as Tinder for
fashion, Grabble allows users to
shop from thousands of fashion
brands, including Zara, Harvey
Nichols, Topshop and Marks &
46%
Spencer. Shoppers use a swiping
system to “grab” items to save in
wishlists or buy.
of retail exectutives
questioned said the
Although retail may be awash with
discovery stage was
digital innovators that, like Grabble, ripe for disruption
are seeking to give customers a
new way to simplify the shopping
experience, one should not
underestimate the role of the store
in discovery.
Testament to the power of bricks-
and-mortar are the many digital “You’ve got pureplay retailers
retailers that have set up shop over coming to the high street, which
the past few years, in part to fulfil is a development that three or four
consumers’ desire for experience by years ago people wouldn’t have
generating entertaining, immersive necessarily talked about,” says
in-store service encounters. Debbie Bond, customer director
at Moss Bros.
Fashion retailer Missguided opened
its first flagship store in Westfield “I think there is going to be
Stratford City last year, while grocer a rebellion from the sterile world
Ocado opened beauty store Fabled of online to come into stores,”
with Marie Claire last July. says Rob Wilson, chief technology
officer of Smyths.
Amazon has even dipped its toe in
the bricks-and-mortar world, having “We still want to have a great
unveiled its first bookstore in Seattle, online experience – and our online
followed by checkout-free grocery business is very large – but from
store Amazon Go. a conversion rate point of view,
if you compare someone who
walks through your door to
visiting your website, it’s very,
very different,” he adds.
29New technology has added
more routes of discovery
for today's shopper
www.qubit.comPurchase
You’ve got pureplay
The jump from discovering a
retailers coming to
product to completing a transaction
is a major one that may require
the high street, which is
many steps for the shopper. a development that three
or four years ago people
Some consumers seek out coupons wouldn’t have necessarily
or promotion codes, while others talked about.
may undertake further research
to determine product quality Debbie Bond, customer
or try to find it cheaper elsewhere. director, Moss Bros
However, technology can play an
important role in enticing shoppers
to complete their purchases.
Emerging areas such as biometric
A key way is by making goods payment – which allows
easier to collect. Starbucks, for shoppers to use their biological
example, uses location-based make-up, such as fingerprints
technology on shoppers’ mobile or facial recognition, to pay
apps to allow those in need for goods – remains an area
of a caffeine boost to click to watch for retailers.
to buy and pick up their cup
of java without queuing. According to a survey carried out
on 14,000 European shoppers
Ease of payment can also provide by Visa last year, two thirds of
an incentive to buy. Amazon’s consumers want to use biometrics
one-click payment has proven when making payments, and half
an invaluable tool for the retailer think it will make the process faster
and has helped to drive many and easier. With payment giants
impulse purchases – particularly Visa and Mastercard backing the
on mobile devices. technology, it is an area retailers
should take an interest in.
Meanwhile, Apple Pay and Android
Pay may still be in their infancy, but
the retailers that offer them may
stand to benefit from early adopters
of mobile payment.
31Similar to in-store service, speedy,
effective online advice can also
help shoppers to move from
the discovery to purchase stage
Qubit Footwear LTD of shopping and technology.
Active Now Developing chatbots on apps
Trainers such as WhatsApp and Facebook
Messenger means retailers can
speak to shoppers on their platform
What is your price range?
of choice and not divert their
shopping path.
£50-£100
Another valuable way that
What about these?
technology can persuade shoppers
to buy is through virtual-reality
experiences, which help them to
envisage using potential purchases
in real-life, such as test-driving a car.
Reebok Classic Nylon Nike Huarach Outdoor brand The North Face
£55 £57 has offered customers the virtual
Buy this item Buy this item experience of wearing their
potential purchase in the great
See more like this See more like this outdoors while wearing VR
headsets in store.
Ask a question Ask a question
Although some early uses of virtual
reality in retail have verged on the
gimmicky, a report by investment
bank Goldman Sachs last year
predicted that the technology is
one “retailers will have to invest in
to serve their customers and keep
ahead of their competition”.
www.qubit.comVirtual reality is now on
the radar of may retailers
33Post-purchase
Personalisation can
For retailers, a transaction should
reduce acquisition
only be the start of their relationship
with customers and a platform
costs by as much as
to build a long-lasting connection. 50%, lift revenues by 5%
to 15%, and increase the
Driving repeat spend is a critical KPI efficiency of marketing
for every retailer, and technology spend by 10% to 30%.
can help boost this.
McKinsey & Company,
Data-led recommendations and November 2016
personalisation are two ways
retailers are trying to drive
repeat custom.
The likes of Amazon has pioneered
this approach for years and
its recommendation engine
is understood to account
35%
for 35% of its sales.
of Amazon's sales are
accounted for by its
recommendation engine
Related items you've viewed
www.qubit.comPersonalisation has become Personalisation is just one area
a priority for many retailers where retailers can attempt to drive
over the past few years. repeat custom. Loyalty schemes
remain a powerful incentive for
However, few are challenging shoppers to spend with a retailer,
Amazon, with less than a quarter but digital-savvy retailers are
of those interviewed (24%) reinventing these programmes
describing their offer as “fully for today’s consumers.
automated, sophisticated,
segmented personalisation”. In this mobile-driven world, loyalty
schemes have become increasingly
One business that is using app-based. When Harvey Nichols
a segmented approach to launched its app-based loyalty
personalisation is Ribble Cycles. scheme in 2015, Shadi Halliwell,
“We’re using segmentation on group marketing and creative
the site to be able to give a more director, said she believed it was
tailored messaging,” says Matthew the future of loyalty: “instant,
Lawson, chief digital officer personalised and modern”.
at the bicycle retailer.
Pricing is another lever that retailers
“We’re building this approach based can pull to stimulate more business.
on what we know customers Dynamic pricing has been used by
potentially would like from what many retailers, particularly online
other people, similar to them, players such as Amazon and eBay,
like or have shown an interest which flex theirs in response
in buying,” he adds. to demand and supply.
This technology has also been
trialled in-store by retailers including
John Lewis and Tesco. However,
We’re using
it has failed to be rolled out
segmentation significantly.
on the site to be able
to give a more tailored While not all this technology will
messaging. have longevity, some innovations
are here to stay – and look set
Matthew Lawson, chief digital to make the customer journey
officer, Ribble Cycles far more complex.
35Chapter Five:
Conclusion
www.qubit.comWe are amid a However, this research illustrates
that – despite most retailers
technological acknowledging that new
revolution in retail, technology is dramatically changing
rivalled only by the customer journey – investment
is not being prioritised to adapt
the emergence to this new retail reality.
of ecommerce.
More than four fifths of retailers
(82%) plan to spend less than
However, retailers are not cowering £1m to introduce new advanced
away or denying that this new technology.
breed of tech is going to impact
how they do business. The fact Some of the tech being pioneered
that 82% of retailers believe that right now will inevitably, like
machine learning will impact the Google Glass, fall by the wayside.
sector shows how seriously its However, adopting a wait-and-see
disruptive potential is taken. approach in this fast-paced, fast-fail
environment could open a greater
Heavy investment is being made by risk of being left behind.
some retailers to ensure they keep
pace with this rapidly developing
area. Asos revealed earlier this
year that it would accelerate its
infrastructure investment, while
John Lewis plans to cut its annual
staff bonus this year in order to
plough money into keeping its
online channel ahead of the curve.
82%
of retailers plan to spend less
than £1m to introduce new
advanced technology
37Crucially, the retail leaders surveyed
may have picked out machine learning,
the internet of things and artificial
intelligence as the big winners going
forward, but all emerging technology
relies heavily on customer data.
Not only will each of these Brands that don’t engage
innovations be improved by good customers in the right way,
data and its correct usage, they at the right moment, in the right
depend on it for their success. context, will quickly be replaced
by competitors who can.
To prepare for the future, retailers
must be able to process and
connect the massive new data
streams created by innovations.
Marketers should be proactive
in defining a data and customer
engagement strategy for these
new tools.
www.qubit.comChapter Six:
Partner Comment
39Qubit’s Graham
Cooke explains Artificial intelligence
– and machine
the one key
learning in particular –
element needed presents one of the most
to harness the exciting tech innovations
power of disruptive to date.
technologies. Graham Cooke, founder
and CEO, Qubit
Retail is undergoing a revolution,
as new technologies proliferate
and consumer behaviour
continues to evolve. Tools are already available to gather
this data, but many companies are
We’ve seen an array of using outdated techniques, such
developments across the internet as relying on general demographic
of things, artificial intelligence data gleaned from basic site-testing,
and machine learning. However, for example, to create a picture
in such a crowded marketplace of their customer that is not
it can be difficult to know which quite accurate.
technologies are truly worth
investing in. In order to seize the opportunity
that innovations such as AI offer,
Before that decision can be made, retailers need to ensure that they’re
there is one key element that is inputting accurate and multi-faceted
required if the investment is going customer data from a variety of
to pay off. All the technologies sources at the outset.
explored in this report have
one thing in common: data. For us here at Qubit, it’s artificial
intelligence – and, within this,
Having a full grasp of who your machine learning in particular
customers are is paramount, and – that presents one of the most
includes their online behaviour as exciting tech innovations to date.
well as their shopping intentions.
Research firm IDC has predicted
that cross-sector adoption of AI
will drive global revenues from
nearly $8bn (£6.4bn) in 2016 to
more than $47bn (£38bn) in 2020.
www.qubit.comThe prospective impact on While the available benefits are
efficiency is also huge. To truly evident, however, challenges remain
understand the potential here, that must be addressed. We’ll clearly
you only have to remember the need less talk and more action if
revolutionary effect programmatic we’re to grasp the opportunities of
advertising had when it first arrived. this technology and put the next
generation of marketing tools into
Marketers were able to harness the hands of retailers.
data to automate many manual
processes and make smarter, As this study shows, 82% of retailers
more strategic decisions about recognise the potential of machine
opportunities for their brands, learning and believe it will have
improving campaign performance an impact on the industry, yet
by between 30% and 50%, only 48% are currently applying it.
according to some studies.
And this is just one of the
technologies that are set
to change the face of digital
Machine learning commerce in the next decade.
enables retailers
The retailers that will triumph
to super-charge their will be those that aren’t afraid to
customer segmentation push ahead with innovation while
and target far more continuing to place the customer
specific demographics at the core of their business.
in ways that will resonate.
Pairing this obsession with the
consumer with a willingness to
Graham Cooke, founder
adapt will provide a far greater
and CEO, Qubit
understanding of how to deliver
experiences that keep customers
coming back again and again.
Yet this was only laying the Graham Cooke is founder
foundations for machine and CEO of Qubit
learning, which enables retailers
to super-charge their customer
segmentation and target these far
more specific demographics in
ways that they know will resonate.
41About Qubit Qubit is the innovator of highly persuasive personalisation at scale. We work with companies to transform the way they understand and influence their customers. By understanding their customers’ online behaviour, preferences, and affinities they can deliver highly persuasive personalised experiences. With Qubit, online businesses can increase revenue, build loyalty and improve marketing efficiency. By combining rich customer data, deep learning technology and advanced segmentation capabilities, our Customer Influence Engine enables precise targeting of a wide range of personalisations – so businesses can reach the right visitors at the right time, at scale – to drive sales and loyalty. We’re trusted to deliver real impact to the bottom line for the biggest brands in travel, retail and eGaming, including Arcadia, Farfetch, Net A Porter, Emirates, John Lewis and more. To date, we have received over $76 million in funding from Goldman Sachs, Accel, Sapphire Ventures, Balderton Capital and Salesforce Ventures. www.qubit.com info@qubit.com US +1 212 201 0546 UK +44 (0) 203 551 3990
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