SAN JOSE — Most people have heard about hyperlocal news, but what about hyperlocal retailing?
It’s a concept that could catch on if Celect has its way. The assortment optimization platform – which presented at Demo, a conference at the McEnery Convention Center here last week that focused on emerging technologies and product innovations – uses predictive analytics tools that sift through the massive amounts of data retailers collect to decipher shoppers’ choice patterns in order to help retailers make better merchandise decisions at the individual store level.
In beta testing, one customer registered a revenue increase of more than 7 percent by implementing Celect, according to Vivek Farias, chief technology officer of Celect and a Massachusetts Institute of Technology professor. He emphasized Celect’s retail customers can expect 20 percent jumps in conversion rates. For its largest customer, Celect examines an inventory of 100 million stockkeeping units and a customer base of 20 million customers.
“We’re actually in some ways taking a quantum leap almost from where assortment optimization sits today,” said Farias, adding, “You can have two locations that might be just miles apart, and they can behave in very different ways. If you look at the existing process at retail, you are shooting yourself in the foot because store A and B might be grouped together and get the same stuff, but there is a lot to be gained from selling in A what is first choice for people in A and selling in B what is first choice for people in B.”
Farias explained the traditional retail buying and merchandising structure leads to assumptions about customers that aren’t always accurate; challenging those assumptions by leveraging Celect can boost sales. For instance, a retailer might characterize customers in a specific store as preppy and assort that store entirely with preppy merchandise, even though its customers might like preppy T-shirts and pants, but gravitate to edgier accessories. Celect can suggest edgier accessory brands never carried before at the store that could perform well at it and provide insight on other details, including about color, price and size.
Farias elaborated, “A consumer in a store behaves in incredibly fickle ways. In one category, they might go for crazy colors, whereas in a different category they could behave completely differently. The [current] model doesn’t capture this. They are stereotyping everyone who shops at a store – let’s say in Lancaster, Pa. – as someone who would never buy a high-fashion handbags, whereas the truth of it is that when it comes to handbags they might simply be starved for high-fashion handbags, and they want Michael Kors. We actually have seen that play out.”
Celect was classified by Demo as a “smart data” company, a category that was also home to Brand V02, a startup allowing brands to measure themselves against their competitors and forecast future market share. Another category, wearable technology, had a strong showing at Demo as well. Viawear, a line of luxury smart jewelry, and Sensilk, a brand of smart clothes, were among the companies at the conference in the wearable segment.
Sensilk weaves conductive fibers into athletic apparel such as tops and sports bras that pick up electrical impulses in the body. When paired with an app, Sensilk provides information on heart rate, calories being burned, breaths per minute and so on. Sensilk is scheduled to launch early next year with garments priced under $150. Unlike smart watches that have to be charged, a battery that is expected to last many months powers Sensilk.
Uche Uba, a product manager at Sensilk, underscored Sensilk is aimed at a broad audience. “We could have tailored it only to high-performance athletes, but we didn’t want to do that. We wanted not only the price point to be low, but also the app to be seamless and easy for anyone to use, whether you are a trainer, an athlete or a mom at home doing yoga and you want to see how you are breathing as you exercise,” he said. “We are trying to make it easy and actionable for anyone into health and wellness.”
Ben Isaacson, formerly a privacy and compliance leader at Experian, has teamed up with Walter Chefitz, previously a design director at David Yurman, to launch Viawear. The company is making its debut with a $350 double-wrap bracelet topped with a custom-cut quartz and mother of pearl gem that alerts its wearer through vibrations and illumination when he or she receives texts, phone calls or app notifications. “We see this trend where people are putting their phones on tables in meetings and in meals, and they are still getting this steady stream of content from all different apps. Our idea is to filter the noise so you get notified about what is important to you,” said Isaacson. “You can keep your phone in your pocket, have a conversation and not feel that you haven’t checked your phone.”
Although wearable technology like Viawear’s bracelet is a hot topic, Steve Wozniak, the co-founder of Apple who came to Demo as chief scientist at data virtualization firm Primary Data, isn’t sold on it yet. He isn’t fan of most smartwatch displays. “It’s too small of a screen,” he said, continuing, “The phone has a much better, usable display.”
Screen size isn’t the only problem Wozniak has with smart devices. He criticized the options available for being too similar. “What’s the difference between the Sony and the Samsung Gear and all the different ones? I’ve tried a few and, so far, I haven’t been turned on. One’s got to be very different,” said Wozniak. “At least the Apple Watch tends to be very different with a lot of the extra fitness [features] and monitoring your glucose levels and things like that. I’ll try it.”