Meet the 5 retail entrepreneurs featured in this year’s INC’s 35 under 35

Featured in this year’s INC’s 35 under 35 Entrepreneurs are five extraordinary retail entrepreneurs that are changing the future of retail!

See them below from the article:

Meet Estimote 

Krzych, 32, and Kostka, 26, are the co-founders of the New York City-based beacon maker Estimote. The company’s beacons–palm-size waterproof wireless sensors–transmit data to your smartphone by using Bluetooth low-energy radio signals. Since the two Polish computer scientists founded Estimote in 2012, they have sold more than 20,000 beacons ($99 for a set of three) to developers and companies that have been building their own apps to engage customers through their smartphones. 

Image

**Image taken from INC.com

Krzych says they realized the size of the opportunity in retail through data and taking a look at how customers buy products in-store and online: “We understand our physical world is at least 10 times bigger than the Internet,” Krzych says. “If you think about it, 95 percent of all transactions in business are still happening in the physical world. So everything that happens on eBay, Amazon, and Facebook are only five percent of all transactions across the world.”

With a list of 20,000 different customers–from huge U.S. and European retailers to museums, hospitals, schools, and public transportation systems–some tasks will become obsolete, Krzych says. When you walk into a restaurant, the menu will pop up as you take a seat. A stroll through New York City’s Museum of Modern Art might prompt your phone to deliver information about each painting you see. Eventually, your home will react to your presence; the door will unlock as you turn the knob and lock behind you as the lights, air conditioner, and TV turn on.

http://www.inc.com/will-yakowicz/35-under-35-estimote-aims-to-give-smartphones-context.html

Meet Everlane 

In the fall of 2010, a then 25-year-old Michael Preysman left his job in venture capital to start his own business. He never expected to work in fashion, but a passion for great design and frustration with the lack of innovation in the retail space, led him to build Everlane. He hasn’t looked back.

Image

**Image taken from INC.com

It’s no secret that retailers mark up their products by eight or 10 times what it costs to produce them. But no one has really done anything about it–until now, that is.

Enter Everlane, an online retailer that sells its line of minimalist clothing and accessories (think simple white T-shirts and leather tote bags) directly to consumers at a markup of just double what it costs to produce. Beyond peddling the latest in affordable fashion, however, Everlane practices “radical transparency,” which means that in addition to price and thread count, Everlane shoppers will see the care instructions, the height of the model pictured, and the product’s origins. Here’s the 50-cent tour of the factory behind Everlane’s $60 Seed Stitch U-Neck sweater:

By exposing its own production and pricing process, Everlane hopes to strike a cord with consumers who want more information, from how free their free-range chickens are to the amount of water wasted in the production of their yogurt.

http://www.inc.com/diana-ransom/35-under-35-everlane-and-its-radical-idea-of-fashion.html

Meet Shopify

Sometimes the best business ideas come from solutions to temporary problems.

So it was for Tobias Lütke and Daniel Weinand, who inadvertently co founded Shopify in 2004 because they wanted to sell snowboards and other winter gear from their online shop in Ottawa.

Image

**Image taken from INC.com

Both computer engineers from Germany, Lütke and Weinand were totally disappointed by the suite of tools available to them to build an online presence for their store, as well as to sell and keep track of inventory.

So they built their own software and soon attracted the attention of other business owners who liked the software’s simplicity and the way it connected so many key features, such as point of sale, cool website design, and low cost. At the time, the alternative was costly software from vendors who charged tens of thousands of dollars.

Flash-forward 10 years, and Shopify has more than 100,000 customers in 150 countries powering their businesses on Shopify. Collectively, those stores logged about $1.6 billion in sales through the platform in 2013.

http://www.inc.com/jeremy-quittner/35-under-35-shopify.html

Sephora augmented reality mirror reflects sales potential of digital sampling

Sephora, the international cosmetics and beauty retailer continues to embrace technology in order to enhance their digital and mobile customer experience. This time, the beauty retailer is adopting 3D augmented reality mirrors to give customers digital solution to interact with their products. In a world with more tech savvy shoppers, Sephora understands their shoppers typically have a shorter attention span and do not respond as well to traditional marketing initiatives. Augmented reality gives customers a chance to experience and try on products without the hassle of applying different products, removing them and repeating the process. The cleaner, more convenient engagement, Sephora hopes will continue to give customers valuable and memorable experience. Image

From the article posted on http://www.mobilecommercedaily.com/ :

Sephora, a leading specialty retailer in beauty announced partnership in the Milan location launch of a new 3D augmented reality mirror by ModiFace that simulates cosmetics on a user’s face photo-realistically in real-time, with expectations to transform how women shop for cosmetics.

The augmented reality technology, which was first debuted at the 2014 International CES in Las Vegas, expects to make color testing easier by simulating makeup products on a user’s face to show what they would look like in real-time and without having to upload a photo. Created by ModiFace, the technology is also being introduced  to standalone retail kiosks equipped with a touchscreen monitor and camera, as well as a mobile application that can be used on tablets at beauty counters or on consumers’ own handheld devices. While 2D try-on tech has been increasing in popularity among online and in-store merchants, ModiFace said 3D is naturally progressive step.

“In 2D try-on, the goal is that interacting and virtually trying on makeup or skin products will lead to an increase in sales,” said Dr. Parham Aarabi, founder and CEO of ModiFace, Toronto.

“In many cases, this works well, especially with mobile apps. However, in retail settings, 2D can be slow and cumbersome since you have to wait, pose for a photo and wait for the result.”

“In these cases, a mirror-like real-time 3D virtual simulation would be the ultimate marketing tool,” he said.

Mirror, mirror
Deciding between beauty products can be daunting, as traditional experimentation consists of applying different products, removing them, and then repeating the process.

The Sephora interface tracks the precise location of a user’s facial features and applies eye shadow colors directly on the video feed from a camera.

ModiFace tech

Sephora customers have access to sampling numerous cosmetic colors instantaneously and virtually simply by tapping on a shade palette on the Beauty Mirror screen. Users may preview unique textures of eye shadow including those with glitter, sparkle and shine elements.

As triallers turn their face from side to side, they can view all products from different angles to more quickly and confidently make informed purchasing decisions.

The 3D AR mirror claims to be the world’s first photo-realistic 3D mirror, and is the result of over three years of research and development.

Try-on technology
Estee Lauder’s Bobbi Brown Cosmetics line has too been artistic in using augmented reality.

Last October, the luxury brand implemented an interactive print-to-mobile campaign powered by Blippar that enabled users to browse and purchase beauty products by scanning a picture. A landing page would then present itself with several different calls-to-action from which consumers could choose from, the most popular being a dramatic smoky eye look.

Additionally, Maybelline ran a campaign as well last year that leveraged AR to let consumers virtually test nail polish shades. And CoverGirl is inclusive in AR initiatives, and featured the tech as a component to a print media buy last fall.

Maybelline AR

Digital dress-up
Cosmetic brands are seemingly flocking to augmented reality due to its effectiveness in showcasing product use cases to ultimately drive sales.

Beauty brands ascertain creative assets and are responsible for making them realized through interactive experiences. Augmented reality allows consumers to participate with and not solely access information, becoming a trigger for the discovery of new products and catalyst for instilling purchase confidence.

“Consumers today are used to and prone to engaging with the world around them in ways never before imagined. It is well-known that retention of messages and engagement with a brand is directly correlated to the degree of interactivity of a given experience,” Blippar’s Ms. Hu said.

“Campaigns that utilize AR to create content-rich interactive experiences are ideal for tech savvy consumers, who typically have shorter attention spans and do not respond as well to print or video advertising.

“The biggest challenge to using AR is ensuring that there’s value in the experience. Consumers are not interested in gimmicks, so when targeting demographics, we aim to create AR experiences that are fun, engaging and relevant to the audience we’re trying to reach,” she said.

How Seeing More Increases eCommerce Engagement

At the mall shoppers have the opportunity to take only a few steps into a store to gain a visual representation of what items are available prior to committing to viewing the stores range in greater detail. That all important first scan of the store can be critical.

On the other hand, eCommerce traditionally does not provide shoppers with a comparative experience online.

ecommerce store display

Online Retail Display

Online stores have only limited screen space in the first view to wow customers and keep them on their site and looking for more. Ten to twelve flat images in a standard grid as a first impression for customers makes grabbing their attention difficult.

The customers who do commit to exploring more typically have to scroll through pages and pages of products to find images worthy of continuing their shopping experience on that site. This situation can lead to buyer’s fatigue, where shoppers have browsed so many pages of items that they simply lose interest and leave the site.

An online presence should excite visitors enough so that they not only return but they tell others about the experience they had.

So how can online retailers overcome this?

It’s simple. By helping your site visitors find items of interest to them quicker and allow them to feel in control by providing an interactive experience.

Research shows that images are the most important factor in the online shopping experience, more important even than price. When we shop we scan many items and allow one to catch our eye, tracking subtle factors such as colour, shape and position.

What does this mean to you, the online retailer, seeking new points of difference as online shopping matures? It means that existing online image galleries are counter-intuitive to the way people shop in real life. A static, flat 2D grid does not meet the needs of customers to visually scan and interact with products.

Interactive Display – Show more. See more. Sell more.

With interactive display by Show. See. Sold. shoppers can view an entire collection in an engaging and immersive way that triggers the eye/brain connection promoting discovery and a genuine connection to the products displayed.. It is based on how we as humans find things in everyday life, which had yet to be translated to online retail product display.

Shoppers can swipe, zoom, spin and filter a product range then click through and buy. Seamless integration means images and copy are always up to date and site owners can easily control what is displayed. Show. See. Sold is all about user experience and engagement across all devices from desktop to mobile.

The end result of this process is a material uplift in time on site, conversion and basket size, all achieved with a little help from neuroscience which goes to show there is more to increasing your online sales than meets the eye.

omni-channel-distribution-retail

A marked change in the approach to omnichannel

As retailers are examining (and reexamining) their omnichannel strategies in the wake of new technologies and industry trends, one thing is for sure, the technologies such as mobile and tablets that are supporting omnichannel initiatives are not going anywhere.

omni-channel-distribution-retail

In an interview with MediaPost Mark Larson, KPMG’s global head of retail notes that brick-and-mortar retailers are not fearing this new wave of technology, rather they are embracing it.

From the article:

Q: When it comes to tech, how are retailers changing most?

A: As more retailers recognize that omnichannel shopping presents a transformational opportunity, we think those that own physical stores are now viewing these stores as assets, not liabilities. And they are taking greater advantage of technology in the in-store environment. We’re seeing retail brands come up with more ways customers can use smartphones in the store, and also arming associates with more technology, so they can better help customers.

Q: Apple and Sears have long gotten a lot of attention for this. And this year, Macy’s practically gave smartphones a speaking role in their holiday ads, as if to say, “We’re cool! We know people like to shop by phone!” Is that a good idea?

A: I think so. First, it’s defensive. You demonstrate that you understand tech and can compete with the pure-play online retailers. But it also is very much an offensive strategy. It demonstrates to customers that they don’t have to go online to get digital convenience, that it can be integrated into the in-store experience, too.

Q: What do you think will be the biggest change, going forward?

A: An increase in omnichannel behavior, with retailers using mobile more as an enabler. We’ll see more of people buying online, and picking up in-store; and buying in-store, and having it delivered to their home.

Q: What are the risks of increasing the use of mobile in stores?

A: Obviously, information security and privacy, but those can be mitigated. I think a big risk is finding the appropriate match of tech with your brand and your style of merchandise. That needs to be carefully thought out. And then there is always the people risk—you need to make sure associates are trained and understand the technology, so that they can create a good experience for customers.

future-retail-store

What Will Retail Look Like in a Decade?

According to a wealth of research conducted by Shop.org, they believe that the retail store of the future (or at least in ten years) will look vastly different from today’s brick-and-mortars.

future-retail-store

For retailers to remain viable in the future, they need to become innovators and leaders in four distinct areas of their business – customer experience, brand, operations, and administration.

From the article:

Successful retailers in the future will be customer-led. Many retailers today are organized around what is essentially a 20th century operation while trying to serve the 21st century customer. In many cases, internal merchandising teams are divided by channel, marketing teams are carved into areas that ultimately create disparate views of the same customer, IT departments focus on managing risk rather than the impact to the customer, and a digital division is too often silo-ed itself. Going forward, retailers must organize all operations around the customer first – an objective that will take time, resources, investment, flexibility and patience. Nordstrom is one retailer which serves as a prime example of an evolving, customer-led organization.

10 years of “bridge” strategies ahead. Becoming a customer-led organization won’t happen overnight – nor should it. Over the next 10 years, retailers should spend time assessing competencies, shifting and integrating current teams, revising titles and roles at all levels and the talent needed for those, setting and re-setting objectives and incentives, and putting systems and processes in place to develop the organizational structure that is “right” for them. Bridge strategies will be a key – this set of measures will help retailers move from one organizational evolutionary stage to the next while keeping the business growing. One example of this is that several organizations have announced “omnichannel” titles and divisions in the past year, an important bridge step to move the organization forward for now. But this should not be confused with the future retail organization where omnichannel is not a structure but rather a characteristic and philosophy embedded in the organization overall.

shopper marketing, the future of retail

The digital future of retail

The traditional retail model that we currently know is about to undergo a major paradigm shift. According to an article on Retail Customer Experience summarizing “The Retail Revival: Reimagining Business For The New Age of Consumerism,” by RCE blogger Doug Stephens, big data, increased processing power, and hyper-connectedness will lead the way to a new digital future in retail.

shopper marketing, the future of retail

From the article:

The future will see consumers move between anywhere convenience and only-here experiences. Increasingly it will not be the consumer who travels to the store, but the products that travel to the consumer in a completely seamless, serendipitous and relevant way. Consumers will regulate their interests, control their privacy and dictate many of the terms of engagement. And if a brand doesn’t like it, consumers will simply move down the list until they find a one that does.

And where will all this stuff we’re buying on the fly be delivered? Well, players like Amazon and 7-Eleven are already testing drop boxes in select 7-Eleven locations, allowing for seven-day-a-week deliveries that consumers can pick up at their convenience. And UK’s ShopBox has developed lockable, refrigerated containers that are placed outside the home to hold deliveries of just about anything, including perishables.

This is not a shift from brick and mortar to e-commerce—it’s much broader than that. In fact, as we as consumers, gradually become the destination, we’ll stop discerning so much between online and offline retail. Channels of distribution won’t matter. Goods and services will simply come to us, or wherever it’s convenient. Or, when we are given the promise of a memorable, one-of-a-kind live experience, we’ll visit a store.

In time, there will be very few consumer decisions in our lives that our digital assistants won’t be able to help us navigate, and this navigation will not always lead us to a retail transaction in the classical sense.

Kofi Annan, NRF Big Show 2013, Retail

Collaborative Thinking, Common Goals, and Co-Existence in Retail Central in Kofi Annan’s Keynote Address at NRF

This year’s keynote speaker at the National Retail Federation’s Big Show in New York City was former United Nations Secretary-General Kofi Annan. He addressed the crowd of over a thousand attendees with a message of peace and prosperity in a world of growing conflict and struggle.

Kofi Annan, NRF Big Show 2013, Retail

It might be hard to immediately see the connection of a former UN Secretary with the world of retail, but Annan stressed that peace goes hand-in-hand with prosperity, of which retail plays an integral role. Political conflicts and wars (with huge emphasis on the Middle East and Northern Africa) impact the way retailers do business around the world.

“Political conflicts and wars affect the environment in which one does business,” he said. “A bad environment creates problems for you and for the people living in that region.”
To that effect, Annan outlined three pillars prosperous societies are built on:

  1. Peace and stability
  2. Development
  3. Rule of law and respect for human rights

Each pillar reinforces the other. “If you don’t have a stable environment where people can invest and get their return on investment, why would they invest and how do you develop the country,” he asked.

Nations cannot move forward without stability and peace; there is no development within a volatile society. The pillars must be rooted in by the rule of law and a respect for human rights in order to see long-term growth.

Annan asked retailers to consider investing in third-world nations through public and private partnerships, noting that retailers need to incorporate small-scale farmers into their supply chain. Such farmers would be able to improve their own living conditions while contributing to their society.

In Kenya, Safari.com came up with a system called M-Pesa, a mobile-to-mobile money transfer system. In six months, M-Pesa has brought 17 million people into its network. Farmers are now making deals through their cell phones, cutting out the middleman – and it is making a difference on how produce is traded in Kenya.

During the Q&A portion of his keynote address, Annan stressed that retail can play an important role in solving many economic problems today. By coordinating efforts between large and independent businesses, creating jobs for young people and stressing socially responsible business practices, retail can be a driving force for change.

NRF's Big Show 2013

3 Themes from NRF’s Big Show that will Shape the Retail Landscape in 2013

The Merchandising Matters team traveled to the 102nd annual National Retail Federation’s Big Show in New York City earlier this week. This being our second year in attendance, we were excited to see what key trends evolved over the past year, what the new buzz words are in retail, and where the retail industry is headed in the next year.

NRF's Big Show 2013

With a record attendance of nearly 27,000 attendees, we had to work hard to get to all of the booths we planned to visit, let alone find a seat at the sixteen breakout sessions we had on our agenda.

All in all, the future of retail seems bright in the coming year. Despite somewhat lackluster holiday numbers (only up 3%) and ever-present economic concerns, retail is seeing a breadth of innovative approaches to providing exceptional buying experiences.

Below are three overarching themes we identified from NRF that were a common thread through much of this year’s Big Show.

  1. Omni-channel experiences
    Arguably the biggest buzz word from NRF this year was once again “omni-channel.” We heard countless exhibitors, speakers, and attendees speak about omni-channel marketing, creating omni-channel experiences, and understanding the omni-channel shopper.

    Paul Mangiamele, CEO of Bennigan’s, spoke about the importance of flawless execution across all channels in the massive redesign of the Bennigan’s restaurant chain. Retailers must create a valuable retail experience that is consistent across their in-store, online, social and mobile channels.

  2. Brick-and-mortar stores are not going anywhere
    If one thing will always remain constant, it is the importance of the brick-and-mortar retail store. This point was emphasized with vigor at NRF. This does not mean that retailers should not ignore their digital channels, as they can be just as important to driving store visits and sales.

    Wendy Liebmann, CEO and founder of WSL Strategic Retail, noted in her breakout session that 41% of shoppers use a mobile device while in a brick-and-mortar store. Retailers that truly understand their shoppers will employ an omni-channel approach to turn them into loyal customers, outspending casual shoppers 13 to 1 in the physical store.

  3. The globalization of retail
    International attendees were a major focus this year, with translators in each breakout session and entire sessions focused on international and globalized retail strategies.

    The upcoming World Cup and Summer Olympics in Brazil are driving a boom in retail infrastructure in South America. Tesco CIO Mike McNamara spoke at length on how they leveraged consumer technologies to grow Tesco into a global brand without losing grasp on their supply chain.

Experience is at the forefront of every retail interaction. Whether it is in the brick-and-mortar store, online, overseas, or on a mobile device, brands that take the time to understand their core consumer and create a consistent positive experience across all channels will thrive in the coming year.

Over the next few days, we will focus our posts on specific breakout sessions and events that highlight one or all of the aforementioned themes.

shopper marketing, in-store retailing, mobile devices

Shoppers open to online and in-store shopping

Shoppers diversifying the way they shop for and acquire goods, becoming increasingly open to buying both online and in-store depending on their needs at time of purchase. While more than 80% of shoppers chose the store to make their last non-grocery purchase, only half are committed to returning there next time they buy. These are among the findings of a new IBM study of global consumers.

shopper marketing, in-store retailing, mobile devices

IBM’s research finds that consumers are in a transitional state. According to the study, 35% are unsure whether they would next shop at a store or online. Nine percent are ready to commit to making future purchases online. Of all eight product categories tracked in the survey, the two most popular categories chosen by consumers for an online shift are consumer electronics and luxury items, including jewelry and designer apparel.

“Today’s consumer is sophisticated and opportunistic, navigating between store and online environments interchangeably to meet their shopping needs of the moment,” said Jill Puleri, Global Retail Leader, IBM Global Business Services. “To satisfy clients, retailers must deliver a consistent, convenient shopping experience across each consumer touch point, extending from the store to online and back again. The key is using data and analytics to better understand the behavior and preferences of shoppers to close the sale.”

The IBM study also found that nearly half of online purchases in studied categories resulted from “showrooming.” Significantly, nearly a quarter of these online shoppers intended to buy their item in the store, but ultimately purchased online – primarily due to price and convenience.

[via Chain Store Age]

President Obama, Retail Store

Election 2012: The impact on retail

The National Retail Federation on Wednesday said it looked forward to continuing to work with President Obama and the new Congress toward the goal of putting Americans back to work and ensuring that the nation’s economy remains the strongest in the world.

President Obama, Retail Store

“The top issue facing our nation the day after the election is the same as it was the day before the election – the economy,” said NRF president and CEO Matthew Shay. “The U.S. needs public policy that encourages economic growth and removes barriers to job creation.”

Industry experts said that with the reelection of President Obama, the Affordable Care Act was very unlikely to be repealed and that its implementation would speed up.

In a posting on the NRF website, Craig Sherman, VP government affairs PR, NRF, reviewed the impact of the election on other issues critical to the retail industry. Here are some highlights:

Labor: Reelection will likely mean a more active labor agenda ahead. The outcome gives more opportunity for labor decisions and actions by the administration and the National Labor Relations Board. Some of the more controversial approaches taken by the NLRB on ambush elections, micro-unions and union access to the workplace are already under legal challenge as is the challenge to the makeup of the actual board. A decision on the constitutionality of the board makeup is expected in 2013. The Department of Labor is expected to issue regulations restricting employers’ ability to seek labor-related advice from attorneys, consultants and other expects by the end of the year.

Tax: Tax issues are ultimately tied to what Congress does or doesn’t do during the lame duck session in order to avoid the “fiscal cliff” of tax hikes and federal spending cuts scheduled to take effect on Jan. 1. Most of the $500 billion in tax increases are as a result of the expiration of the Bush tax cuts for individuals, and could have a substantial impact on consumer spending. Some economists have warned of a recession if nothing is done.

Obama has called for expiration of the Bush cuts for individuals with income over $250,000 a year. House Speaker John Boehner, R-Ohio, has re-iterated his pledge to not allow the upper income rates to expire because of their impact on small businesses that report their taxes using the individual tax system. However, members of both chambers of Congress have been working on frameworks for a bi-partisan deal to address both tax and spending issues.

Sales Tax Fairness: A new bipartisan sales tax fairness bill, granting states’ authority to require online sellers to collect sales tax on all sales if certain simplifications are adopted, is expected to be released by cosponsors reconciling differences between the current House and Senate versions. As lead cosponsor of the Senate bill, Majority Whip Richard Durbin, D-Ill., will continue his push to pass the legislation while fiscal cliff negotiations continue.

Cybersecurity: Obama is expected to issue an executive order on cybersecurity in the coming days, and Senate Majority Leader Harry Reid, D-Nev., has indicated he plans to consider cybersecurity legislation on the Senate Floor during the lame duck. Without a change in the majorities and presidency, not much progress is expected on the legislation unless the bill considered in the Senate is drastically different and more narrowly focused on information sharing than in the past given the business community’s vehement opposition.

[via Chain Store Age]