SXSWorld February 2016


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3 6 S X S W o r l d | F E B R U A R Y 2 0 1 6 | S X S W. C O M n the 1990s, many technologists predicted doom for tradi- tional retailers. "The Internet Economy Rules!" was splashed across the cover of trendspotting magazine The Industry Standard in December 1999, which certainly wasn't alone in its exuberant embrace of the dot-com boom. Today, there's no doubt that e-commerce has become firmly embedded in the way we shop, with total e-commerce sales reported to again have passed $300 bil- lion in 2015, setting yet another record. Yet, even those impressive figures account for only around seven percent of overall retail sales, meaning that traditional brick-and- mortar stores haven't exactly faded away. Instead, stores have embraced, and in many cases pioneered, the technologies that shape modern shopping. Melanie Bender, senior marketing director with shopping center giant Westfield, points to the term "SoLoMo"—short for Social, Local, Mobile—to describe the modern shopping experience. "From what we buy, to how we buy it and who we buy it from, retail looks wildly different now than 20 years ago. The major driver is customer expectations. Twenty years ago, our retail expectations were based on a relatively limited set of experiences—a local department store, a few local specialty stores and the magazines or catalogs we sought out. Now, 24/7 digital access and the subsequent opportunity that has created has turned what would have been a dozen retailer options into a million in the palm of our hand at any given moment." Recognizing that the competition is always just a tap or click away, retailers are deepening their digital connection with in-store shop- pers. Key to this effort are wireless beacons, which use technologies like Wi-Fi or Bluetooth to deliver flash discounts and personalized content. This can help the consumer save money while also being rewarded for shopping in physical stores. Bender added that aug- mented and virtual reality experiences may soon add even richer interactivity to in-store shopping. Technology also is determining where those stores are located, according to commercial real estate expert Julie Augustyn: "Retailers have specific information about their customers based on their shop- ping history, favorite items, where they live and more. Good tech companies and brokers are working to apply that thinking to the physical space, making site selection more data-focused and not as much of a gut-check that the retail real estate industry has used historically." Validation comes from continued growth in retail sales as well as from some perhaps unexpected bedfellows. A number of retailers that started online have begun opening physical stores. Among these are the clothier Bonobos, now with 20 "guideshops" around the U.S., and Warby Parker, with more than two dozen eyeglass boutiques. Perhaps the most surprising addition comes from the very company that is synonymous with e-commerce: Amazon Books opened its doors in Seattle in November. Whether in stores or online, consumers are buying more apparel and other goods. This is great news for retailers but, given the cur- rent methods by which those goods are sourced, manufactured, transported and delivered, the picture is somewhat less rosy for the environment. Sustainability initiatives are critical to ensuring a strong future for manufacturers and retailers alike. "The numbers are awful," said Cara Smyth, executive director of the Fair Fashion Center and vice president of Glasgow Caledonian University. "We're a $2.5 trillion industry worldwide, with 80 percent women in the supply chain. One in six people in the world works in fashion-related businesses. And unfortunately, we are the second highest user of water in the world, and the second highest polluter in the world. Ten percent of carbon emissions come from fashion, and 20 percent of industrial water waste comes from fashion." Rather than stressing solely the environmental impact, Smyth and the Fair Fashion Center are encouraging apparel executives to think about sustainability from a capitalistic point of view. "If you have environmental impact, you likely have waste. And where there's waste, there's likely some inefficiency in your system. And where there's inefficiency in your system, there's likely a profit loss. So that became our approach—what are we doing in our business that doesn't make sense and could raise income and drive profitability while reducing social and environmental impact. And when you get 30 companies worth $200 billion working together, you can com- pletely transform the model of sustainability. " The Fair Fashion Center will also introduce consumer initiatives in the coming months. One would allow online shoppers to request to have their goods shipped with minimal packaging; another opt-in initiative would allow buyers to round up their purchase price to help offset the carbon impact of the goods they're buying. The retail landscape has certainly changed in recent years, and with technology and sustainability helping drive conversation, the evolution is sure to continue well into the future. T Melanie Bender is co-presenting the SXstyle panel "$5-Trillion Question: What's the Future of Retail." Cara Smyth will present "Fair Fashion: Profitability & Sustainability." Julie Augustyn is hosting the second-annual "Connected Retail Clicks and Mortar Meet Up." Find the latest on these and other SXstyle events at Retail Thrives, Not Just Survives, in the E-commerce Age by Patrick Nichols I M ela nie B e n d e r

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