While many new customers may visit a department store during peak season, they might not become loyal clients right away. Many retailers wonder how to apply concrete methods to build meaningful relationships with customers and encourage them to return after peak season. This article offers a few tips to help convert new shoppers into long-term customers through scalable and tested engagement and loyalty techniques, ensuring sustained growth even during slower periods.

Building a seamless omnichannel strategy

During the low season, tracking sales and interactions without any blind spots becomes crucial in determining the effectiveness of specific operations. It also allows retailers to react quickly with targeted campaigns when certain strategies are not successful.

Many department stores face common challenges in tracking sales and communications across different departments and branches. Managing various divisions that cannot access each other's data can become a major obstacle to delivering a great customer experience and achieving growth.

This is why more and more department stores are implementing omnichannel solutions that:

1. Track customer behaviour
2. Measure the effectiveness of store operations
3. Monitor inventory
4. Facilitate data transmission between stores and branches

Implementing an omnichannel platform is a crucial first step in building an effective engagement strategy. It streamlines operations, enables data-sharing between branches, aligns different teams to work seamlessly toward results-drivengoals, and, most importantly, ensures consistent client services across all locations.

Anticipating customers' needs and wants

Once an omnichannel strategy is in place, one of the most valuable data points to record is individual customer information. This allows retailers to personalise their offerings and anticipate customer needs.

Personalisation is one of the most significant factors in enhancing client engagement. However, the challenge for most retailers is that personalising their offerings requires understanding individual customer preferences with a scalable method. They must also ensure this information is shared across branches and stores.

One effective solution is creating detailed customer profiles. By storing key client information—such as past interactions with sales representatives, purchase history, brand preferences, and average spending—retailers can better tailor their services to meet individual needs.

On a practical level, sales associates should have easy access to this information to deliver highly personalised recommendations during one-on-one interactions. Not only does this enhance the customer experience, but it also boosts employee confidence by removing the guesswork from the sales process.

Customer engagement is proportional to sales associates' engagement

Sales associates are the face of their company. Giving them more opportunities to engage with clients and rewarding them for doing so successfully is crucial for any retailer's growth. According to the Bureau of Labor Statistics, U.S. retail organisations experience an average employee turnover rate of 60%. High turnover is problematic for retailers, as

studies show that customers are 77% more likely to purchase a product when they trust the person recommending it. In this sense, customer engagement is directly linked to associate engagement and trust.

Empowering sales associates to take ownership of their roles as local experts and even micro-influencers has proven effective, especially when combined with an omnichannel strategy and a highly targeted, personalized approach. More companies are investing in solutions that provide sales associates with opportunities to engage through recommendation pages, social media, appointment scheduling, and direct communication with shoppers outside the store. By increasing touchpoints with customers, retailers can deliver high-quality service while also motivating sales associates to build lasting one-on-one relationships. Tracking successful interactions and rewarding individuals for their engagement has also been shown to boost associate morale and performance.

Building a scalable communication strategy

Nourishing 1-1 relationships with customers is essential to build loyalty, but how can department stores also grow customer engagement through a repeatable and scalable methodology?

It has been demonstrated that personalized interactions and recurring positive engagements drive customer loyalty.

Many retailers have found success by implementing the 3-3-3 or 2-2-2 strategy.

What is the 2-2-2 strategy?

The 2-2-2 strategy in retail communication is a structured approach designed to maintain consistent, personalised follow-ups with customers after a sale or interaction. It nurtures customer relationships and enhances loyalty, proving highly successful within various client bases.

Example:

• 2 days after the sale: Send a thank-you message and offer assistance if needed.
• 2 weeks after the sale: Follow up to ensure the product meets expectations and suggest complementary products based on the initial purchase or recent browsing history.
• 2 months after the sale: Reconnect with the customer to share updates on new arrivals, promotions, or loyalty programs.

The shift from manual to automated processes offers several benefits. Associates no longer need to spend valuable time identifying which customers to contact or tracking down past purchase details. This efficiency allows them to focus on high-value interactions, increasing productivity and optimising clienteling efforts.

Delivering the in-store experience online with AI

E-commerce has become a crucial aspect of the customer buying experience and changed shoppers' habits by providing round-the-clock shopping accessibility. With this new reality, providing personalised responses at any time of the day is becoming an expectation for customers.

While AI cannot replace human recommendations on an emotional level, it can bridge the gap by offering off-hours support and relevant product suggestions when a sales associate is unavailable. AI technology is increasingly tailored to specific retail use cases, making it an essential tool for retailers to consider.

In today's highly competitive market, incorporating AI has become a crucial part in implementing an effective customer engagement journey. A well-designed conversational AI becomes stronger and smarter over time, because it can be trained from your own retail intelligence, allowing it to deliver autonomous, human-like interactions, enhancing the shopping experience. Leveraging years of customer and associate interactions, AI-powered solutions can assist shoppers with visual browsing and personalised product recommendations. Advanced systems also integrate seamlessly with inventory, ensuring only available products are suggested. Additionally, retail-specific AI models can automate product tagging, identifying key features of new items to provide accurate and relevant recommendations during customer interactions.

Conclusion

The key to a successful client retention strategy lies in a retailer's ability to accurately understand their shoppers' needs and deliver personalised outreach. By incorporating automation, empowering sales associates, leveraging AI, and implementing a scalable engagement strategy, retailers can build a strong foundation for long-term success.

*Salesfloor stands as an award-winning clienteling and customer engagement platform, empowering retailers to foster meaningful conversations, drive recommendations, and boost sales. By offering innovative tools such as clienteling, virtual shopping, and conversational AI, Salesfloor enables seamless customer engagement across all channels.

Trusted by over 50,000 associates from leading retailers in apparel, beauty, jewelry, and beyond, Salesfloor is redefining the role of store associates in the modern retail landscape. Renowned brands such as Saks Fifth Avenue, Bloomingdale's, and Chico's rely on Salesfloor to achieve measurable results, including higher online conversion rates, larger basket sizes, and reduced return rates.*

Salesfloor

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In the competitive world of retail, fostering strong customer trust is no longer a nicety, it's a necessity. Consumers entrust department stores with sensitive personal and financial information, making a secure shopping experience an absolute priority. However, the digital age has introduced a multitude of sophisticated cyber threats. From large-scale data breaches to targeted phishing scams, retailers face a constant uphill battle to safeguard customer information. This is where robust cybersecurity becomes the linchpin. By implementing strong data security measures, department stores can build customer confidence, cultivate lasting loyalty, and ensure a safe and secure shopping experience for all.

Unfortunately, the consequences of failing to prioritize cybersecurity can be severe. Data breaches, which occur when sensitive information like customer names, payment details, or addresses are compromised, can have a devastating impact on retailers. The financial repercussions are significant, with potential costs including hefty regulatory fines, expensive credit card fraud mitigation efforts, and a decline in sales due to customer churn.

Even more damaging, however, is the erosion of customer trust that follows a data breach. When consumers learn their personal information has been exposed, they may feel vulnerable and question the retailer's commitment to data security. This loss of trust can translate into a significant shift in shopping habits, with customers taking their business elsewhere and potentially sharing their negative experiences with others, further damaging the retailer's reputation.

Fortunately, there's a powerful tool at retailers' disposal to combat cyber threats and build customer confidence: cybersecurity. Cybersecurity encompasses a range of practices and technologies designed to safeguard data and information systems from unauthorized access, use, disclosure, disruption, modification, or destruction. By implementing robust cybersecurity measures, department stores can demonstrate their commitment to protecting customer information. This includes essential steps like data encryption, which scrambles sensitive data to render it unreadable in the event of a breach. Secure payment gateways further fortify the checkout process, ensuring customer financial information remains protected during transactions. Additionally, employee training plays a crucial role. Educating staff on cybersecurity best practices, including identifying phishing attempts and proper data handling procedures, strengthens the overall security posture. These proactive measures not only safeguard sensitive information but also send a clear message to customers: their trust and security are paramount. This commitment to data security fosters customer confidence, encourages continued patronage, and ultimately strengthens the department store's competitive edge.

However, building trust goes beyond just implementing strong cybersecurity measures. Transparency is equally important. Customers should also understand that a retailer is taking active steps to make sure their information is protected. Retailers can achieve this transparency by clearly communicating their cybersecurity practices. This includes readily available data privacy statements that outline how customer information is collected, used, and secured. Additionally, pursuing recognized security certifications demonstrates a department store's commitment to meeting rigorous industry standards for data protection. By maintaining clear and open communication about data security, retailers can address customer concerns, build trust, and foster a sense of security that keeps them coming back for a positive shopping experience.

By prioritizing robust cybersecurity and open communication, department stores can ensure a secure and trustworthy shopping experience for all. IADS has a partnership with the Retail & Hospitality Information Sharing and Analysis Center (RH-ISAC) to provide cybersecurity resources for all IADS members. To learn more, visit rhisac.org/IADS.

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Over the last decade, department stores – once shining beacons of commerce and consumer culture – have found themselves increasingly under pressure. From the impact of the pandemic to the relentless rise of eCommerce, deepening labour shortages, and shifting shopper preferences, these venerable institutions are realising that they must adapt, or risk fading into irrelevance. Just look at Macy's – a retail icon that grew at an incredible rate in the early 2000s, now confronting mass closures to stave off the creeping threat of unproductiveness.

Set against this challenge, a new vision is emerging – one that views digitalization not as a threat, but as an opportunity to redefine the department store experience for a new omnichannel era. Around the world, forward-thinking retailers are leveraging innovative strategies and technologies to streamline operations, engage employees, and delight customers in ways that online commerce simply cannot match.

Why customers pick department stores in the eCommerce era

Department stores have a unique ability to turn shopping into a fun, social experience. They are vibrant hubs of activity with new collections and sales, especially during festive seasons, and deliver the experiential retail that customers crave. The presence of helpful and knowledgeable sales associates elevates this experience, providing the all-important human touch while facilitating easy, consumer-friendly policies. Great customer service is crucial not only for attracting shoppers to stores, but also for encouraging them to spend more –according to Alice POS, 42% of Americans will stop shopping with a brand after just two bad experiences, while 52% of consumers say they have made an additional purchase from a company after receiving positive customer service.

To deliver on the promise of experiential shopping, department stores must empower and motivate the people who bring in-person shopping to life: their frontline employees. Retail executives that invest in their customer-facing staff, providing them with the knowledge, skills, and support they need to excel, are better positioned to create the kind of personalised, memorable experiences that keep customers coming back time and time again.

Frontline tech delivers an outstanding shopper experience

This people-centric approach is exemplified by the partnership between Central and Robinson Department Stores (CDS), one of Thailand's largest department store chains, and YOOBIC, a virtual employee engagement platform designed for frontline teams. In 2020, CDS announced plans to merge the processes and support teams from its Central and Robinson brands to offer shoppers an unrivalled brick-and-mortar retail experience. The ambition was big – to create Thailand's first truly omnichannel department store – but so too were the hurdles: fragmented communication, inconsistent task execution, and a lack of accountability and visibility into store performance.

To overcome these obstacles, CDS turned to YOOBIC. Thanks to the platform's targeted, role-based communication tools, the retailer is now able to ensure the right operational information reaches the right employees at the right time, fostering greater consistency and compliance across its locations, like Visual Merchandising updates. YOOBIC's task management features provide Central Retail's leadership with real-time visibility into store execution, enabling them to track key performance indicators and hold teams accountable for results.

The benefits of the partnership extended far beyond operational efficiency, however. By creating digital communities within each of its 77 stores, CDS has fostered a greater sense of connection and belonging among its 4,000-strong frontline workforce. The platform's mobile-first learning and development system has also opened the door to bite-sized, on the-go training, empowering team members with the knowledge and skills needed to deliver exceptional customer experiences.

CDS's commitment to employee development is exemplified by their upcoming relaunch of training programs, which will offer regular incentives for top performers during the initial months, supported by in-person field coach teams who'll promote a blended digital and face to-face learning approach. The workforce's enthusiasm for professional development and digitised workflows is already evident in the impressive 85% Weekly Active Users (WAU) on the YOOBIC platform, sustained over the past 5 months, and the creation of 400,000 missions in the last year, which have had an impressive 87% completion rate. Effective employee training and development has also been crucial for attracting and retaining talent –according to a YOOBIC survey, 49% of frontline workers don't think that onboarding prepared them well for their jobs, while 64% want opportunities for career growth within the organisation.

Tapping into employees' creativity and passion

The lessons of YOOBIC and CDS's collaboration highlight the transformative impact of structured operational communication for store teams, moving beyond basic tools like emails, Whatsapp, or Line to a unified and intuitive communications platform. YOOBIC has not only enabled seamless communication among store staff, however, but has also provided a direct channel for the C-Suite to engage with frontline workers. This direct contact allows senior management to share their vision, provide guidance, and gain valuable insights from the employees who interact with customers daily. Throughout Southeast Asia – and indeed across the globe – department stores are waking up to the fact that their most valuable asset is their people. By giving frontline workers a voice, a sense of purpose, and the tools to succeed through advanced communication strategies, retailers can tap into a wellspring of creativity, passion, and customer-centricity that no eCommerce algorithm can replicate.

Of course, this transformation is not without its challenges. Shifting long-standing practices, investing in new technologies, and fostering a culture of continuous learning and innovation requires vision, commitment, and resources. But for department stores that get it right, the rewards are immense – not just in terms of sales and market share, but in the creation of a more vibrant, engaging, and human-focused retail landscape.Today, CDS enjoys a more knowledgeable and empowered workforce, better equipped to deliver personalised and exceptional shopping experiences. The sense of community and purpose fostered among the company's employees is a huge part of this, not only improving job satisfaction and retention, but also promising a positive impact on customer loyalty and sales.

As CDS continues to invest in its teams and technology, it sets a powerful example for others seeking to thrive in an increasingly competitive and digital world. The success of the brand's partnership with YOOBIC demonstrates that by prioritising the human element in retail, department stores can create a more resilient, adaptable, and profitable future.So, to department store leaders around the world, the message is clear: embrace the power of your people, and let digitalization be the catalyst for a retail renaissance that will stand the test of time. The future of your industry – and the hearts and minds of your customers – depends on it.

Fabrice Haiat - CEO & Co- founder / YOOBIC

YOOBIC is the #1 frontline digital workplace, dedicated to addressing frontline teams' challenges. The platform provides communication, learning and development, operations, and HR teams with the app they need to drive operational excellence while drastically improving the frontline employee working experience.

YOOBIC was founded in 2014 by 3 brothers, Fabrice, Avi and Gilles Haïat. Together they created a unique digital workplace that helps businesses empower their frontline teams for success, wherever they are, through effective communication, mobile learning and, digitized task management - all in one place.

Yoobic

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At the forefront of luxury retail, the convergence of technology and high-end fashion is redefining elegance and sophistication. In this digital era, luxury brands are leveraging innovative technologies to enhance the customer experience and stay ahead of evolving trends. From immersive virtual boutiques and augmented reality try-on experiences to blockchain authentication and personalized AI-driven recommendations, the fusion of technology and luxury fashion is creating unparalleled levels of engagement and exclusivity. Digital fashion shows offer global audiences unprecedented access to high-fashion runway events, while interactive experiences blur the lines between the physical and virtual worlds. As luxury brands navigate this intersection of technology and fashion, they are reshaping the retail landscape and redefining the standards of opulence and innovation.

Retail Hub, our partner dedicated to innovation, is constantly monitoring potential start-ups for IADS' members, including the latest brands bridging the gap between technological innovation and luxury fashion. Explore the initiatives of startups selected by the Retail Hub such as Beyond The Runway, Fringuant, and Emperia, BuyBuddy pioneering solutions to navigating the intersection of technology and high-end fashion and more by clicking below.

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Loss prevention remains a critical aspect of retail operations, with the rise of online and offline threats posing significant challenges to businesses worldwide. From theft and fraud to operational errors and shrinkage, retailers must adopt proactive measures to mitigate risks and protect their assets. Explore innovative strategies and technologies aimed at enhancing loss prevention in retail, including advanced surveillance systems, AI-powered analytics, and RFID tracking solutions. Learn from industry experts and thought leaders as they share best practices and practical insights to safeguard your business against potential threats.

Dive into the world of cutting-edge security technology with startups such as Rapitag, Autonomo Technologies, and Saffe, committed to mitigating risks and protecting retail assets.

Retail Hub, our partner dedicated to innovation, is constantly monitoring potential start-ups for IADS' members, including the latest brands and startups committed to mitigating risks and protecting retail assets. Explore the activities and initiatives of startups selected by the Retail Hub such as Rapitag, Autonomo Technologies, and Saffe specializing in innovative, intelligent asset surveillance solutions and more by clicking below.

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Retail Hub, our partner dedicated to innovation, is constantly monitoring potential start-ups for the IADS members, including many featured at the NRF 2024 Big Show. Retail Hub has compiled a list featuring all of the most interesting start-ups from the NRF 2024 that can be discovered on The Retail Hub. This list compiles start-ups in a variety of different categories and specializations such as AI technology, analytics, logistics, retail media networks, editing software, and advertising.

Retail Hub's startup tour from NRF 2024: Retail's Big Show

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Retail Hub is constantly monitoring the most interesting startups on the market for IADS members.

This week, they focused on experience, stock management and live shopping conversion.

Tulip Retail, in collaboration with Apple and Salesforce, enables intelligent merchants to provide the end-to-end experience that contemporary customers demand by connecting with customers, fulfilling orders, completing transactions, and optimizing operations. Tulip is used by leading retailers such as Mulberry, Saks Fifth Avenue, Kendra Scott, Kate Spade, COACH, and Michael Kors to improve customer service and enrich the shopping experience across channels.

Tulip Retail website

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Retail Hub, our partner dedicated to innovation, is constantly monitoring potential start-ups for the IADS members, including Bringg. Bringg is one of the many start-ups that can be discovered on Retail Hub. The platform connects and digitizes the entire last mile ecosystem, engineering competitive fulfillment services based on the retailer's own business goals and KPIs.

Bringg website

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What: Chat GPT has already changed the way millions of people work, and retailers should notice.

Why it is important: AI can help in gaining some productivity points, for instance in writing the content needed for product descriptions or social media posts.

ChatGPT, a language generation model, could revolutionize the way customers and retailers interact with each other in the retail industry in Australia. Futurist and author Gihan Perera believes that many businesses and retailers will use ChatGPT for language-related tasks such as social media posts, headlines, product descriptions and promotional video scripts for Instagram stories, TikTok, YouTube and so on. He believes that some large-sized businesses will integrate programs like ChatGPT into their own digital suite, while a smaller fraction will investigate other forms of AI, after experimenting with ChatGPT. Perera also states that ChatGPT, in and of itself, won't transform the retail industry, but it may act as a precursor to AI technology that will be transformative in the future.

One entrepreneur who has already started using ChatGPT, Lauren Yehezkel, the founder of reusable lid company Lydy, found that it improved her productivity immensely and that it's a handy way to relieve the stress of mundane tasks. It can even be seen as the first step in the adoption of AI within companies and learning how to intricate it into everyday tasks.

How retailers can use Chat GPT

Retail Hub is constantly monitoring the most interesting startups on the market for IADS members.

This week, they focused on experience, stock management and live shopping conversion.

Lisa allows e-retailers or D2C brands to interact with their customers by creating a live shopping experience that increases the conversion rate. Lisa enables live shopping on the e-commerce platform and offers pilot, live commerce programs for the preferred marketplace. Lisa's live shopping products are designed with the onboarding and integration experience for the retailers. Lisa can make the products shoppable within the retail brands if retailers have an online shop or mobile app.

Lisa website

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Retail Hub is constantly monitoring the most interesting startups on the market for IADS members.

This week, they focused on experience, stock management and live shopping conversion.

Unbuyist helps fashion buyers and planners make data-driven inventory decisions with artificial intelligence. It solves the overproduction problem by combining inventory optimization with AI and Big Data technology. The software predicts if the new product will be successful in the market with an 85% accuracy rate and predicts the demand for each SKU. The system takes multiple internal (CRM, product data, sales, inventory level, etc ) and external data (social media trends, macroeconomics, and weather) into account and produces reliable results in a timely manner.

Unbuyist website

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Retail Hub, our partner dedicated to innovation, is constantly monitoring potential start-ups for the IADS members, including Algoretail. Algoretail is one of the many start-ups that can be discovered on The Retail Hub. The company generates an automated transparent and fully customized process from the moment the product enters the store until it is purchased– accurate inventory management, maximum utilization of shelf space, appearance that promotes sales and recurring orders.

Algoretail website

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What: Former John Lewis premises are now dedicated to experiences, through a partnership with a metaverse operator.

Why it is important: Mixing virtual and physical reality is here, as the Sandbox will provide virtual gaming and full immersion in the metaverse, while at the same time entertaining customers with robots and other animations. Such initiatives, if they are generalized, should be monitored closely by department stores.

Hammerson, a UK-based real estate company, has signed virtual reality experience Sandbox VR as part of its plan to diversify the use of Grand Central (Birmingham, UK) which hosted a John Lewis store in the past.

Sandbox VR will open a 1,300 sqm space in the location this summer, which will be its third location in Europe and largest to date as it expands in the UK and Ireland. The virtual reality experience will offer group gameplay and socializing in exclusively designed interactive worlds. The Grand Central location will also feature a robotic bartender.

Sandbox VR's co-founder said the location is ideal for launching the company's second UK site. Hammerson also recently announced plans to create a new office, social, and entertainment district in Birmingham. The company is working to create a multi-use destination.

Metaverse operator the Sandbox to open a third physical space in Europe 

What: Benedict Evans' reflections on how tech redefines retail.

Why it is important: There are two ways to see the technology impact on retail: some companies are adapting to the possibilities now offered (LVMH), while some others, such as Shein, are literally building their business model around these possibilities, just like Walmart was something new entirely created by the generalization of cars.

Benedict Evans illustrates in this week's newsletter the thesis he developed to IADS CEOs during the General Assembly: tech is not a destination per se, but a tool, and it helps disrupt and transform retail in the same way than cars transformed retail in the mid 20st century, creating more fortunes in retail than in the car industry itself.

For him, while LVMH is all about producing high quality items (by controlling production) and controlling their perception (by controlling distribution), understanding how luxury works on smartphone is still a work in progress. Shein might illustrate, in the fast fashion market, how the use of mobile phones and putting them at the centre of the business model looks like, in the same way than Skype which disrupted telecoms by using internet in a new way.

Evans also wonders what it means for a retailer to go viral (such as Shein, or TikTok) and if the future absolutely involves opening shops? This question creates two possibilities for the future: one where only huge brands can survive thanks to their scaling effect and ability to directly reach customers where they are (i.e. cracking the code of the mobile phone business) and one where a myriad of smaller brands can coexist and survive, precisely because in retail boutiques remain the norm, thus limiting the impact of the global brands (a thesis defended by Doug Stephens).

As he explained during the General Assembly, Shein might be an iteration of what the Walmart of these days looks like, by adapting to new paradigms and available ways to talk to customers.

What's the link between Skype, Shein and LVMH

What: A review of the blocking factors in the adoption of AI, two years after a first survey on the topic.

Why it is important: Gone are the days when geeks could impress with their ability to talk in a technological way: in order to convince top executives, they need now to produce easy tools that are thought to be simple to consume and accessible from any device, including mobile phones.

In the recent past, Artificial Intelligence has become a topic on its own and not "just" a technology supporting the changes the retail industry needs. RSR conducted a research in 2020 and decided to update it, in order to compare the results and understand where the topic lies now.

In a nutshell, the more retailers understand AI, the lower their expectations as they also understand better what stands in their way from fully embracing this tech, which is mostly about the physical and intellectual capabilities needed:

-    Lack of understanding on how to practically use AI,

-    Being properly equipped in terms of analysis tool, data and analysis technique, talents, budget,

-    Difficulties to quantify ROI.

As a consequence, teams report that their management in increasingly skeptical, from 20% in 2020 to 33% today.

Somehow making a connection with a comment from tech analyst Benedict Evans, the number one challenge is to understand how the new data can be used (for instance: what to do with a sentiment expressed on Facebook when Meta itself is struggling to make sense of it?).

In addition, RSR remarks that, in order to overcome organizational inhibitor, it is all about passing simple and clear messages. In order to make sure top executives will use AI in the future to make decisions, they need two elements: easiness of use and consumption, and mobile access to the tool.

Reflecting on Artificial Intelligence

What: A report on AI based on the answers of 100 qualified retail respondents in the US.

Why this is important: More than customer-facing tools or prediction in demand, it is expected that AI becomes a key element of the supply chain, able to identify and predict any upcoming bottleneck.

The retail environment has grown increasingly dynamic, unpredictable and requiring ability to make fast decisions. For this reason, the use of new data has increased, in order to develop scenario models and reach a greater agility. However, agility should not exclude optimization and AI is supposedly a tool that could help in reaching these two goals.

While it is expected that AI provides a competitive edge in demand forecasting, merchandising planning and supply chain, the identified challenges are also that the demand changes extremely rapidly, limiting the possibility to buy in bulk at a lower cost. In fact, AI is expected to help when it comes to identify, and predict in real time, supply chain alerts.

Artificial intelligence in retail: what now? 

What: Swedish recycling company, Renewcell, has opened the world's first 100% textile to textile recycling plant in Sundsvall, Sweden.

Why it is important: This opening marks a significant milestone in the history of textiles around the world. Renewcell is now ready to meet the abundant demands for Circulose from fibre manufacturers to fashion brands.

The company is well known for its upcycling of cellulosic textile waste, like cotton clothes, and recycling it into a new material called Circulose.

Their goal in the coming months is to gradually ramp-up capacity and product quality. Once the full process line is operational in September 2022, the capacity for the first half of the year is estimated at 60,000 metric tons and to be doubled in 2023/24.

The work for the plant started on July 1st, 2021 and expects to be fully operational in September 2022.

World's first textile-to-textile recycling plant 

What: Vogue Business provides examples of different approaches to web3 phygital spaces by digital native brands.

Why it is important: Mixing physical and digital products and experiences together helps engage and attract consumers by bringing retail closer to a true metaverse.

One example of this blending can be seen in the London event created by Cult & Rain, which sells 3D products as NFTs connected to physical luxury goods. Within the space, VR headsets were available for guests to double their presence through avatars and visit with guests attending virtually from California. As well, luxury sneaker prototypes were available to try on via augmented reality and wristbands with QR codes that granted POAPs (proof of attendance protocols, which act as commemorative digital badges). Huge format LED screens also helped with the immersion of visitors in the physical space.

A different approach to bridging digital and physical experiences can be seen through Superplastic's recent opening of its first physical retail space in New York. The digital native brand creates "synthetic celebrities" having successfully collaborated with brands like Gucci. In the retail space, toys, collectables, NFTs, and token-gated experiences are available to shoppers. The company has goals to bring its ethos across different industries with plans for fashion week appearances, a hip-hop band and a streaming film series in which the brand's virtual characters will appear.

Both companies cite the importance of experiential spaces and customer rewards as paramount to building loyalty. Offering enticing rewards and access to special products in token-gated spaces can appeal to existing and prospective consumers.

How digital natives are approaching physical Web3 experiences

What: Currently scheduled to start around mid-September, the merge will see the Ethereum blockchain transitioned from its existing proof-of-work mechanism to a more efficient proof-of-stake system, ultimately reducing the amount of energy used per transaction.

Why it is important: Brands that have released Ethereum-based NFTs will be able to claim that they are now using an energy-efficient infrastructure, should the merge be successful.

The merge is also intended to maintain Ethereum's dominance as the preferred blockchain for NFTs. Some fashion companies have used other blockchains which already use the proof-of-stake system, however, Ethereum's appeal remains in its widespread adoption and higher selling prices.

The merge is expected to reduce the use of the Ethereum blockchain by 99%. The current method has been said to use more electricity annually than Romania, with its annual carbon emissions just below Tunisia's.

Instead of computers racing to solve complex equations per transaction, the new system will dispense with this competition and instead involve investors staking their ETH in a pool, entering them into a lottery that will select one to validate the transaction and claim the reward.

The merge also aims to make Ethereum more scalable and lay the groundwork for making faster updates.

Understanding the Ethereum 'merge': how it will affect fashion

What: PayPal-owned returns software and reverse logistics business Happy Returns localises drop-off and aggregates shipping to optimise customer experience and sustainable returns for customers like Everlane and Gymshark.

Why it is important: The business of returns is a USD 206 billion industry. In 2021, 20% of online-bought products were returned, contributing significantly to fashion's carbon footprint.

Consumers increasingly expect a convenient returns process, with the flexibility to return e-commerce orders in-person as well as via mail.

Happy Returns helps brands optimise their returns process to save money, retain revenue by promoting intelligent exchanges, boost sustainability, and make returns more delightful for shoppers.

Happy Returns offers an in-person, aggregated returns service through a network of more than 5,000 brick-and-mortar locations, such as FedEx, Staples, Ulta Beauty and Cost Plus World Market.

Consumers' refunds are immediately generated during the Return Bar drop-off, helping to maintain customer satisfaction and an NPS of 93, while merchants benefit from significantly reduced shipping costs and packaging waste and the Return Bar locations, such as Ulta Beauty, benefit from increased foot traffic. Happy Returns software is available to all merchants and software fees are waived for any merchants that offer PayPal as one of their payment methods to their shoppers.

The logistics, cost and volume of returns are a growing problem. As more shopping takes place online, return rates for e-commerce tend to be 3 to 4 times higher than brick-and-mortar.

Reverse logistics remove that friction of the mail for consumers: the wait, the hassle, the printing of labels. After starting the process online, a Happy Returns transaction takes about 30 seconds at one of our 5,000 Return Bars across the US, and the consumer will receive their refund instantly.

In terms of sustainability, Happy Returns, collects items dropped off at the physical locations box-free by shoppers, and then they are aggregated and shipped together in large, reusable and recycled totes rather than a cardboard box. Using the totes up to 100 times.

They then ship items from drop-off locations to the regional Return Hubs where they sort and label the returns and bulk-ship them back to the manufacturer. It's a two-step process that uses reusable packaging to eliminate cardboard and labels from the equation, and eliminates trips by densely packaging items into one-third of the box space.

A sustainability-focused logistics solution for fashion's returns

What: Geneva, the social messaging platform that combines text, audio and visual tools, has Gen-Z consumers looking for a community to call home. Brands are helping build those hubs, but how they measure the success of the platform is ambiguous.

Why is it important: Social app Geneva launched to the public in 2021 and has seen triple-digit user growth since the beginning of this year, particularly among Gen-Z. Beauty and fashion brands are testing the platform to build hyper-engaged online communities and one-to-one relationships with customers.

The platform does not offer any paid ad tools, though it plans to build monetisation features, like paid access to events, for brands and creators.

Geneva is still small, and without paid advertisement tools, it's difficult for brands to see a black-and-white return on their investment on the platform. That may make it a more difficult sell at a time when tough market conditions mean brands are clamping down on unnecessary spending and limiting experimental efforts.

Rare Beauty's small social media team, already responsible for keeping tabs on its Instagram, Twitter, TikTok and more, currently monitors its Geneva home. Geneva, however, isn't evaluated using the same KPIs (such as likes or engagement rate) as other platforms.

How brands are using the Geneva app

What: GDR UK, an IADS partner, is specialized in spotting innovation across the planet. Here, they make a selection of sustainable delivery options.

Why it is important:  The last mile is usually the worst when it comes to margin and environmental impact. Most of the startup companies showcased try to kill two birds with one stone, by working on the packaging costs and reducing the number of deliveries per customer and per day.

GDR UK, a partner of the IADS, has spotted a selection of startups specialized in proposing sustainable delivery options:

• OHI, which uses micro-fulfillment centres to offer quick and carbon-neutral delivery solutions via bike, e-bike or on-foot, in reusable packaging,
• Olive, a delivery platform that groups deliveries from several brands into one shipment with the products unboxed (the boxes being recycled), and delivered all together into a package-free tote bag on a given day,
• Siklus, an Indonesian startup which delivers household refills via electric motorbikes,, reducing by 30% the retail price of the products purchased,
• Alagramo, a mobile vending machine placed on an electric vehicle able to travel to customers' homes whenever they need to refill their household products. Here also, products are delivered in bulk in order to save on packaging and costs,
• Charrli, a subscription service delivering personal care and home care products in refillable containers. Bottles can be reused up to 50 times.

A selection of sustainable delivery startups 

What: Walmart is exploring the new possibilities offered by the metaverse both with its own means but also through external ventures.

Why it is important: Innovation is tested at various levels in a way which allows to test and learn without disrupting or endangering the daily business.

Flipkart India, an e-commerce marketplace venture backed by Walmart, is launching an in-house innovation lab to explore what can be done in the metaverse. They are starting by collaborating with the web3 community in order to understand how e-commerce is going to be impacted by the new tech possibilities.

Flipkart has been founded in 2007 and caters to more than 400m users. A controlling stake has been purchased in 2018 for  USD $16bn by Walmart.

Walmart's Flipkart explores the metaverse and Web3 possibilities 

What: 3DLook uses AI to scan users' bodies and create personalised digital avatars to try-on clothes, and they are launching "YourFit 2.0," a Shopify and Shopify Plus plug-in that automates the process of creating virtual fitting rooms.

Why is it important: With the new tool, brands will be able to choose the products they want to feature, input fit data, and can launch a fitting room in under a week. It used to take up to six months. It will also introduce a product recommendation feature that picks items for shoppers based on body shape, fit preference, and inventory levels, along with an app for store associates later this year.

Virtual fitting rooms have long been advertised as a solution for e-commerce's low conversion rates and high returns but have largely failed to gain meaningful traction. 3DLook's new product is designed to reduce the amount of time it takes for a brand to get a virtual fitting room up and running, making it easier for a wider range of brands to implement the technology.

3DLook sees opportunities to make the consumer experience better ahead. Brands will know what their consumers look like and be able to create products targeted to them more precisely. Down the line size won't just be about fitting into a number or letter but be personalised to each person.

3DLook launches new tool