NRF & Tech: Newness Is the Theme

The focus of the National Retail Federation’s show in New York last week was the poor economy — for once, technology got sidelined.

The focus of the National Retail Federation’s show in New York last week was the poor economy — for once, technology got sidelined.

This story first appeared in the January 21, 2009 issue of WWD.  Subscribe Today.

But new ideas could bring in customers, said Fred Balboni, IBM Global Retail industry leader. “You have to do something that creates excitement around your experience as a retailer,” he said.

Cell phones were a widespread theme, while few executives mentioned RFID. At the Sonic Bar booth, Microsoft demonstrated its platform for tagging objects with two-dimensional bar codes. Microsoft Tag went live this month, and any user can set up, manage and monitor the creation of 2D barcodes on Microsoft’s site. Once the tag is printed and attached to something, such as a garment, shoppers can point their cell phones at a tag and call up a Web site with a video or information about how, for example, an item of clothing was made out of recycled materials using eco-friendly processes.

Avery Dennison has created a similar program and can print its labels and hangtags with its own 2-D bar codes. Such bar codes have already been widely used in Asia to promote brands such as Coke and Estée Lauder.

One of the most intriguing ideas was a kiosk that snaps a photo of a shopper and virtually applies makeup to the image. A major U.S. retailer plans to pilot the EZface Virtual Mirror Kiosk this quarter. CoverGirl and Garnier France already use a version of the technology online. The concept is well-suited for drugstores and the Internet, where products cannot be sampled.

EZface co-founder and vice president of marketing Ruth Gal came up with the idea late at night, when she was researching the latest color trends online while her children slept. “It was hard to see the colors,” she said. “I thought it would be great to have my virtual image and apply all the colors and decide what is the best color on me.” EZface is working with IBM to market and install the application.

IBM also demonstrated a new version of its visual 3-D technology that virtually brings together shoppers via cell phone, Internet and store. A shopper in the store can see anything for sale, such as a chair or dress, floating in 3-D space on a computer monitor. The shopper can send the item to a friend’s iPhone, so the friend sees the item in a product detail page on her iPhone and can chat about it or buy it.

IBM and Sky IT Group revealed that Theory is using its SkyPAD dashboard service to track and react more quickly to sales trends in stores, said Theory chief information officer Keitaro Shigemasa. For example, when leggings did well, the company was able to cut additional ones and sell more. The software also gives Theory more information about individual stores and better end-of-season reports.

Torex, which makes point-of-sale and Compass merchandising software, launched a customer loyalty product with an unusual feature: The software can be set up to recognize when a customer enters a store and can deliver a set of relevant promotions. Customers can be recognized by their mobile phone signals or a card with a loyalty chip in it. The customers could also use a kiosk to swipe their cards and download promotions.

Spencer Maynard, New Look vice president of allocation, said giving customers newness is key to doing well — especially in a down economy. “Fast fashion is now standard in almost all markets from clothing to electronics to food,” he said. The company has about nine million customers, and almost 40 percent of U.K. women shop there. New Look expects markdowns on trendy items and doesn’t try to keep them in stock for more than two or three weeks, he said. Fashion basics, on the other hand, have a longer shelf life and better full-price sellthroughs. “Because we didn’t have high levels of commitment [on fashion items], it frees up working capital, and we had a very successful Christmas,” he said.

For the most recent 12-week period, including after Christmas, total group sales were up 14.5 percent, market share was up 5 percent and margin up 1.7 percent, he said.

“They want to see it in a magazine, go to a shop, do it cheaply and brag to friends just how cheaply they did it,” he said. Any retailer who can do that is in a position to ride the difficult market conditions of the next few years, he added.