the future of retail by deborah w. at nrf jan. 17, 2016
TRANSCRIPT
Page 1 Deborah Weinswig – The Fung Group
THE FUTURE OF DIGITAL RETAIL Deborah Weinswig
Execu?ve Director, FBIC Global Retail & Technology [email protected]
US: 917-‐655-‐6790 HK: 852.6119.1779
CHN: 86.186.1420.3016 @debweinswig
Page 2 Deborah Weinswig – The Fung Group
Agenda
• About the Fung Group
• About Fung Business Intelligence Centre (FBIC)
• Top 16 Emerging Global Technology Trends for 2016
Page 3 Deborah Weinswig – The Fung Group
The Fung Group
Page 4 Deborah Weinswig – The Fung Group
Fung Business Intelligence Centre • Established in 2000 and headquartered in Hong Kong • FBIC serves as the knowledge bank and think tank for the Fung Group
– Collects and analyzes market data on sourcing, supply chains, distribu?on and retail
– Provides thought leadership on technology and other key issues • New York–based Global Retail & Technology team
– Follows broader retail and technology trends – Provides advice and consultancy services to colleagues and business partners of the Fung Group – Builds collabora?ve knowledge communi?es
• Crea?ng a database of technology-‐based startups • Disruptors Breakfasts: introduce startups focusing on disrup?ve technologies that are changing the ways we think
and act today
Page 5 Deborah Weinswig – The Fung Group
Futureproofing
• An?cipate future trends and developments
• Plan for future value and avoid obsolescence
– What problem are you trying to solve?
– How will solu?on be used? – How robust does it need to be?
• Ensure flexibility to manage changing formats and deployment paferns
Page 6 Deborah Weinswig – The Fung Group
Our Partnerships With Interna?onal Accelerators Alchemist Accelerator is an accelerator exclusively for startups whose revenue comes from enterprises, not consumers. Entrepreneurs Roundtable Accelerator (ERA) provides participant companies with an intensive four-month program, with the goal of helping early-stage companies progress rapidly into exciting, viable businesses. New York Fashion Tech Lab is an accelerator that is a result of a collaboration between the Partnership Fund for New York City, Springboard Enterprises and major fashion retailers. It focuses on early- and growth-stage companies.
Plug and Play is a global innovation platform. It connects startups to corporations, and invests in over 100 companies every year. Its 360° ecosystem allows for remarkable innovation to take shape on an international scale.
Techstars is a global ecosystem that empowers entrepreneurs to bring new technologies to market wherever they choose to build their business.
Page 7 Deborah Weinswig – The Fung Group
Collabora?ons With the HK Startup Ecosystem
Disruptors Event Series : we host networking events that showcase startups focusing on disruptive technologies that are changing the ways we think and act today Research Coverage: we publish research covering the Hong Kong startup ecosystem, Hong Kong-based startups and major startup events
Speaking engagements: we take part in startup forums as speakers and panelists Mentorship & Angel Investing: we mentor startups and provide funding to startups as angel investors Knowledge sharing: we partner with stakeholders in the ecosystem in sharing knowledge and information to grow and improve Hong Kong’s startup ecosystem
Page 8 Deborah Weinswig – The Fung Group
Fung Capital/FBIC Commerce Technology Landscape
Page 9 Deborah Weinswig – The Fung Group
TOP 16 RETAIL TECH TRENDS FOR 2016 1. Additive Technology: Intelligent Clothing
2. 3D Printing
3. Robotics/Artificial Intelligence
4. Drone Delivery
5. Smart Malls
6. IoT-Driven Partnerships
7. Wearables
8. Gamification
9. Voice and Facial Recognition
10. Virtual Reality
11. Augmented Reality
12. IoT
13. Mobile Health
14. Mobile Payments
15. Caring Economy
16. Sharing Economy
Page 10 Deborah Weinswig – The Fung Group
1. Addi?ve Technology: Intelligent Clothing • Applica?on of nanotechnology in smart fabrics offers poten?al
for development of new tex?le materials – Kuraray has developed a way to harness afributes of liquid-‐crystalline
polymers, resul?ng in extraordinarily strong fibers that can hold the weight of four SUVs
– Threadsmiths introduced the Cavalier T-‐shirt, which uses “hydrophobic” nanotech woven into the fabric to make it water and stain resistant
• Visijax embeds LEDs in both the front and rear of jackets – Machine washable and powered by
a USB-‐rechargeable bafery that lasts up to 20 hours between charges
– Commuter and City Ace models have mo?on-‐sensing, self-‐canceling turn signals embedded into the sleeves of the garment
Page 11 Deborah Weinswig – The Fung Group
2. 3D Prin?ng Examples in consumer goods: • Orbitrec: world’s first 3D-‐printed bike unveiled at CES • Normal
– Custom-‐fit 3D-‐printed earphones – Partnered with Rebecca Minkoff on limited-‐edi?on products – More sustainable
• Shoes of Prey – Design your own perfect shoes – Design studios in 6 Nordstrom stores
• Mink Makeup Printer – Sub-‐$200 desktop printer can print makeup
Page 12 Deborah Weinswig – The Fung Group
3. Robo?cs/Ar?ficial Intelligence • SopBank is partnering with IBM’s Watson to provide new
func?onality to Pepper, its voice recogni?on robot
• In Japan, hundreds of Pepper robots have been deployed at Nestlé retail stores
• Target is planning to deploy robots in a concept store in 2016
• Lowe’s OSHbot already being tested
Page 13 Deborah Weinswig – The Fung Group
3. Robo?cs/Ar?ficial Intelligence • About 1.2 million addi?onal robots are expected to be
deployed in the US by 2025 (BCG)
• Amazon had 30,000 Kiva robots working at 13 fulfillment centers by September 2015, double the number from a year earlier
• Robots created for corporate boardrooms – Allow users to interact remotely from home (or wherever they are)
– In the Suitable Technologies showroom, salespeople appear through telepresence robots
• Advise on how to repair parts and do training sessions
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3. Robo?cs/Ar?ficial Intelligence
• S?tch Fix – Subscrip?on service that uses AI and human judgment to recommend apparel to shoppers
– Subscribers receive a curated box with items personally chosen by a combina?on of machine and human stylists
• Used for genera?ng recommenda?ons; key driver across industries
– 35% of Amazon sales, 50% of LinkedIn connec?ons and 75% of Neulix views are driven by recommenda?ons
Page 15 Deborah Weinswig – The Fung Group
4. Drone Delivery • Amazon is the leader in drone delivery technology • Drone company Flytrex forecasts that delivery drones
could be in use in London within five years • Es?mated 1 million drones sold during holiday season (FAA)
• New drones introduced at CES that can follow a moving object and carry a person
• QuiQui is a drone delivery service based in San Francisco
• The FAA lost a recent lawsuit, paving the way for commercial drone use
Page 16 Deborah Weinswig – The Fung Group
5. Smart Malls • Beacons enable loca?on-‐based adver?sements
– Shoppers who are nearby receive mobile no?fica?on, such as coupons and direc?ons
– ShopAdvisor & Levi Strauss study: recipients visited stores at a rate that was 2.6 ?mes greater than those who did not receive no?fica?ons
• Malls can track movements, behaviors and preferences
– Data collected from connected kiosks, apps, mo?on-‐sensing technology, beacons, wi-‐fi networks
– Primarily collected from wi-‐fi networks
• Data enables personalized and ?mely promo?ons
– Build shopper profiles, including visita?on frequency and movement inside malls
– If data shows that shoppers frequent healthy food outlets, it can drive the opening of health-‐food restaurants in a mall’s food court
Page 17 Deborah Weinswig – The Fung Group
6. IoT-‐Driven Partnerships • Unprecedented cross-‐industry partnerships being
formed • Samsung and Microsop developing IoT devices based on
Windows 10 • Panasonic is partnering with Denver to transform it into
the first smart city – Create an energy-‐efficient hub – Solar technology, tele-‐medicine tech, traffic management
and security
• Audi and Qualcomm are partnering to integrate Qualcomm’s Snapdragon 602A to provide cuxng-‐edge connec?vity technology
– Infotainment, advanced smartphone connec?vity, naviga?on, voice quality and control features
Page 18 Deborah Weinswig – The Fung Group
• Ford is partnering with Amazon to integrate vehicles with Echo, Amazon’s smart-‐home device
• Intel is working with New Balance on an Android Wear fitness watch that is due out next holiday season
• IBM and Under Armour are integra?ng the Watson supercomputer with the Connected Fitness network to analyze data and provide real-‐?me coaching on health and fitness
• Volvo pursued a partnership with Microsop to enhance connected-‐car strategies
– The Microsop Band can be pressed and told to start the car heater, for example
6. IoT-‐Driven Partnerships
18
Page 19 Deborah Weinswig – The Fung Group
7. Wearables • Fitbit: 22.2% share (#1) of the wearables market as of
3Q 15 (IDC)
• Apple Watch: 18.6% (#2) share of the wearables market as of 3Q 15 (IDC)
• iFit ecosystem provides a game plan for exercising, ac?vity, nutri?on and sleep
• Under Armour’s $400 HealthBox uses a wristband, heart rate monitor and scale to track fitness, sleep and nutri?on
• Withings has a smart wristband heart monitor, scale, sleep monitor and blood pressure monitor
Page 20 Deborah Weinswig – The Fung Group
7. Wearables (Wellness) • AromaCare (mindfulness)
– Connected oil diffuser for personal aromatherapy sessions
– Aroma capsules have RFID tag to enable launching of specific program
• Emfit QS (sleep) – Monitors heart rate levels and then matches them to specific moments
and interac?ons throughout a user’s day • it Smart Bed (sleep)
– Features biometric sensors that track heart rate, movement and breathing
– Ac?veComfort technology collects a customer’s ideal level of firmness, comfort and support of mafress
– Support for sleep apnea
Page 21 Deborah Weinswig – The Fung Group
8. Gamifica?on • Gamifica?on is the use of elements from computer and video
games in real-‐world or other ac?vi?es
• Examples include badges, levels and leader boards that can be used to enhance consumer loyalty
• In a ?ered rewards program, customers must perform certain ac?ons in order to pass milestones; each ?me a milestone is passed there are new rewards
• Starbucks Rewards gives loyal customers stars and has ?ered levels of rewards, based on purchases
Page 22 Deborah Weinswig – The Fung Group
8. Gamifica?on • Under Armour and HTC: first connected-‐fitness product
poruolio, the Under Armour HealthBox
– Based on your height, weight, age and workout tendencies, the Under Armour Record App pairs you with other users
– You can “challenge” family, friends or co-‐workers
• Zipline: incen?vizing through gamifica?on – Three key stores have 500 surplus units of a blue sweater. Top management can send real-‐?me data directly to managers and associates, incen?vizing them with a contest: whichever associate sells the largest number of units within a two-‐hour sale window will receive a financial or bonus reward
Page 23 Deborah Weinswig – The Fung Group
9. Facial Recogni?on • The global advanced Facial Recogni?on market expected growth: $2.77 Bil. in 2015 to $6.19 Bil. in 2020 (CAGR 17.4%) • 30% of retailers are using facial recogni?on technology to track customers in stores (CSC)
• Applica?ons are increasing: health, wellness, beauty and adver?sing – Determine the thickness and applica?on of makeup
– Analyze in-‐store shopper data
• In 2015, Walmart tested with FaceFirst: – Cameras check you in at loca?on
– Smartphone receives customized deals based on demographic
• Intel released RealSense facial recogni?on technology in 2015 – Consumer grade 3D cameras
– Home usage: camera recognizes face to unlock front door
• Challenges: Consumers are not especially comfortable with technology use in retail
Page 24 Deborah Weinswig – The Fung Group
10. Virtual Reality • Google Cardboard viewer was provided
free to New York Times subscribers
• The CTA expects VR unit sales to increase to 1.2 million, a 500% increase from last year
• VR—Oculus Rip headset ($599) available in April 2016
• Samsung Gear VR headset ($99)
• Vitrio VR system provides a 360-‐degree VR view of proper?es
Page 25 Deborah Weinswig – The Fung Group
10. Virtual Reality (Retail Applica?ons) • Widespread adop?on of VR in the
retail space is expected in as lifle as three years
• Video of VR applica?on at Tommy Hilfiger store
Page 26 Deborah Weinswig – The Fung Group
11. Augmented Reality • Augmented reality enables consumers to visualize products in their homes in 3D while they are
in the store
• Cimagine – Markerless augmented-‐reality system that can be integrated across mul?ple channels
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11. Augmented Reality (Retail Applica?ons)
Page 28 Deborah Weinswig – The Fung Group
12. IoT (Connected Home) • A mul?tude of connected-‐home “smart” products are on the market:
cameras, doors, locks, thermostats and light bulbs
• Samsung Smart Home – Samsung Family Hub Refrigerator
– Highlights: maintains grocery lists and schedules, and even sends photos of the refrigerator’s contents to smartphones
• Lowe’s and Staples have launched their own lines of home automa?on and connected-‐home products
• LG’s value has drama?cally increased via its openness and inclusion of partners in other industries, such as sopware, automobiles, materials and even real estate
• Nest Learning Thermostat learns what temperatures the user likes most and turns down the temperature when the user is away to save money
Page 29 Deborah Weinswig – The Fung Group
12. IoT (Connected Pets)
• Consumers will spend $60.6 billion on their pets in 2015, the American Pet Products Associa?on says
• Tracking pets’ loca?on and ac?vi?es
• Video and treats
• Video games
Page 30 Deborah Weinswig – The Fung Group
13. Mobile Health • The global mobile health market is expected to top $49 billion
by 2020. A large aging popula?on and rising rates of chronic condi?ons, including cancer, heart disease and diabetes, will drive the market
• The US senior care service market is forecast to reach $400 billion by 2018, advancing by 6.3% annually
• Smartphone ownership among those ages 65 and older increased from 5% in 2012 to 27% in 2015
0.44 0.70 1.12
1.78
2.83
4.50
0.00
1.00
2.00
3.00
4.00
5.00
2013 2014 2015 2016F 2017F 2018F
$ Bil.
Global Revenue – Tele-health Devices and Services
Source: Convenient Care Association/Merchant Medicine
Page 31 Deborah Weinswig – The Fung Group
13. Mobile Health • Tele-‐health technology delivers virtual
medical and health services to the growing aging popula?on. CVS has over 1,000 walk-‐in clinics, many of which use tele-‐health technology
• The average tele-‐health service cost is $45 compared to $136–$176 for in-‐person visits
Page 32 Deborah Weinswig – The Fung Group
14. Mobile Payments • Apple and Android pay require near-‐filed communica?ons (NFC)
chips for payment – Nega?ve: Require retailers to install new equipment
• Samsung uses magne?c stripe capability (MST) chips for payment – MST compa?ble with new and older credit card terminals – no addi?onal invest required
– Most-‐widely accepted mobile wallet in the US
– Consumers can enlist loyalty cards into Samsung Pay
– Receive coupons and discounts directly to Samsung account
– In 2016: Expanding to China, lower-‐priced handsets and online transac?ons • Customer adop?on remains hurdle, shoppers need incen?ve
Page 33 Deborah Weinswig – The Fung Group
14. Mobile Payments
# of Accepted LocaOons 700,000 > 30 million > 700,000
+
• Apple Watch is compatible • Secure – Unique security code
for each transaction
• Compatibility with existing terminals
• No additional investment for retailers
• Works any Android device • Support from major retailers:
Staples, Walgreens, Wholegoods
–
• Only works with NFC-enabled registers
• NFC terminal cost retailer $500 or more
• Not accepted by major retailers: Walmart, Target, Best Buy
• Limited device options - Samsung Galaxy S6
• Magnetic strip reader requires tricky position for phone
• Uses NFC technology
Page 34 Deborah Weinswig – The Fung Group
15. Caring Economy
• Disruptors: TOMS, Reforma?on, Warby Parker, NOURI, SoapBox Soaps, Zady, GoodXChange
• Social ac?vism over self-‐indulgence – Consumers, especially Gen Z, are increasingly demanding integrity from brands and retailers
• Startups for social good apply market-‐based strategies to achieve a social goal
– TOMS
– Reforma?on
• Social innova?on hubs—The Good Lab in Hong Kong
Page 35 Deborah Weinswig – The Fung Group
16. Sharing Economy • Next big industry to be disrupted is
healthcare, via startups such as Doctor on Demand, Pager, Studio Dental and MedZed
• Sector is maturing and becoming more sophis?cated; Airbnb and Uber have launched separate apps for business
• Challenges: customer safety and regula?on bafles
• 2016 may see the first big sharing economy IPO
Source: Company Reports As of January 10, 2016
ValuaOons: Selected Sharing Economy Startups
Startup Industry ValuaOon
Uber Car Sharing $62.5 B
Airbnb Peer-‐to-‐Peer Accommoda?on $25.5 B
Didi Kuaidi Car Sharing $16.5 B WeWork Office Sharing $10.0 B
OLA Car Sharing $5.0 B
HomeAway Peer-‐to-‐Peer Accommoda?on $3.0 B
Lyp Car Sharing $4.0 B
Instacart Logis?cs/Delivery $2.0 B
Prosper Peer-‐to-‐Peer Lending $1.9 B
TransferWise Finance $1.0 B
Funding Circle Finance $1.0 B
Page 36 Deborah Weinswig – The Fung Group
THANK YOU! Deborah Weinswig
Execu?ve Director, FBIC Global Retail & Technology [email protected]
US: 917-‐655-‐6790 HK: 852.6119.1779
CHN: 86.186.1420.3016 @debweinswig