Retailers Turn to Silicon Valley to Lure Customers
January 20 2017 - 11:49AM
Dow Jones News
By Laura Stevens
In the age of Amazon.com Inc., other retailers are scrambling to
find a way to keep consumers shopping on their sites and in
stores.
The trick? Personalization, via data and tech.
Sunglass Hut is employing deep learning and image-recognition
technology from San Francisco-based Sentient Technologies Holdings
Ltd. for its e-commerce site. When a shopper clicks on a pair of
shades, the "see similar styles" option uses image recognition to
show other sunglass choices, instead of predicting what the person
might want based on what other people have purchased.
Personalization "is the Holy Grail," says Salesforce Commerce
Cloud Chief Executive Jeff Barnett, who works with brands including
L'Oreal and Under Armour.
With online pricing and inventory easily accessible, consumers
are increasingly becoming brand and retailer agnostic. So retailers
are turning to Silicon Valley for everything from artificial
intelligence to data to draw consumers in.
Deep-pocketed Amazon has been investing in technologies like
these for years, aiming to make it easy to find items and click
buy. Tech providers are filling that gap for other traditional
retailers that don't necessarily have the means to do the same.
Even the smallest changes online -- facilitated by artificial
intelligence and algorithms -- can make a difference in sales,
retailers are discovering.
Using Sentient's technology to run multiple tests at once,
Italian lingerie brand Cosabella gauged customer response to change
the color of its "buy" button to pink and its banner to specify it
is Italian family-owned, bumping up revenue by 38%. It is also
using image-recognition technology similar to Sunglass Hut,
tailoring its website to individual customers based on the
advertising image they click to get to the site.
"I don't think AI will eventually take over everything, but it
will rationalize some of what we do," said Cosabella CEO Guido
Campello.
Retailers are also customizing the shopping experience in
stores, where around 90% of U.S. purchasing still takes place.
Technology giant SAP SE is working with retailers on technology
to help identify customers and their likes and dislikes as soon as
they walk into a store, creating more of a shopper experience, said
Lori Mitchell-Keller, global general manager of consumer
industries.
For example, Burberry Group PLC can ask for a customer's name
and type it into an app when the person walks in, giving access to
personal data, including his or her last purchase and whether the
person prefers still or sparkling water -- and potentially some of
his or her public social media presence, too.
"If they understand you, they know how to interact with you and
how to advertise to your likes," said Ms. Mitchell-Keller.
Amazon has been customizing and refining its site for shoppers
for years using deep learning and artificial intelligence --
something it touted at its Amazon Web Services conference late last
year, when it introduced new offerings for customers based off its
expertise. On its retail site, that technology enables better
search results and recommendations for customers, among other
benefits.
Still, it is unclear how willing some retailers are to embrace
something that goes beyond algorithmic search recommendations and
into true customization, in part because it requires merchants
letting go of control over some aspects of the shopping experience,
says Ken Seiff, managing partner at early-stage retail technology
venture-capital fund Beanstalk Ventures and a former retail
executive. "It's probably the single biggest lift that retailers
could get if they actually embraced it."
Tracy Issel, general manager of world-wide retail at Microsoft
Corp., says she sees signs that retailers are diving in. She points
to retailers such as Nordstrom Inc.'s discount Rack chain, which is
now piloting in-store beacon technology that will direct shoppers
to express checkout lines or alert them when a fitting room opens
up via an app on their phone with Bluetooth turned on.
"Digital transformation is upon you whether you want it or not,"
Ms. Issel says.
Write to Laura Stevens at laura.stevens@wsj.com
(END) Dow Jones Newswires
January 20, 2017 11:34 ET (16:34 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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