The Tech. conference at London’s Printworks brought the retail industry’s most innovative companies together for two days of speeches, debates and demonstrations.

From new startups to industry giants, the messages were similar – ignore technological advancement in-store and online at your peril.

The pace of change

Martin Wild, chief innovation officer at German electronics retailer MediaMarktSaturn, began day one by telling delegates they needed to be “willing and able to transform over and over again” as consumer habits develop.

While he admitted his company had been slow to adopt e-commerce in the 1990s and 2000s, it was now keen to be at the forefront of “constantly accelerating” technological developments. Wild argued that even though some of the technology MediaMarktSaturn is working on does not directly drive sales, investment in innovation is key to staying ahead of the competition.

Dhruv Kumar, chief technology officer at beauty brand Charlotte Tilbury, cautioned that it was important to keep the pace of innovation balanced with actual consumer appetite for new technology.

“Make sure you move at a pace that challenges customer but doesn’t isolate them,” he said. “Whenever you introduce new tech you have to make sure that the indicators are moving.”

AI hype

Artificial intelligence (AI) is the term you can’t get away from at tech events, but several speakers on the first day were quick to point out its current limitations.

N Brown chief information officer Adam Warne said while the retail sector is currently preoccupied with AI, the technology was still in the machine learning phase, with any talk of robot domination at least a couple of years away.

“When you look at the practicalities, it is machine learning not AI,” he stated, noting that even more advanced tech firms are still having teething problems with automated recommendations. “Netflix has had data scientists since it began, but I still struggle to find something to watch,” he said.

Matt Harris, director at research and advisory firm Information Services Group, warned retailers not to get carried away on “marketing hype”, explaining that things like feeding weather data into supply chain management systems has been around for years.

“It’s now being marketed so much that people think ‘AI is going to solve all my problems’,” he said. “If you look at AI, the tech is at an early stage, ‘digital transformation’ is bandied around but no one really knows what it means.”

Harris added that some companies are just buying bits of tech in order to satisfy bosses and shareholders that there’s been ‘digital transformation’ in the annual report.

In terms of best practice, Google Cloud solution architect Robert Saxby stressed the importance of educating the workforce on the implications of AI and machine learning.

“As we come into an environment where AI becomes more important, we all need to have a shared understanding as to how that works,” he said, adding that as the technology becomes more complex and difficult for a novice to interrogate, organisations need people able to question machine learning.

Leadership embracing technology

More retail heavyweights were rolled out on the second day, with a broad consensus forming that for technology investments to really work, engagement and enthusiasm needs to come from the top.

Sally-Anne Newson, director of customer experience and digital products at Shop Direct, suggested that retail’s biggest challenge is the mindset shift required for staff to embrace technology.

She said that the era of decisions being dictated by the highest paid person’s opinion was over and most of her time was now spent “warding off the executive team” because her technology department is “better able to find the answers to our problems than they are”.

This was reflected in research from PwC announced at the event, which revealed that three quarters of retailers feel digital transformation requires a change in leadership mindset. The firm’s digital consulting leader Colin Light told delegates that digital transformation is radically changing the nature of senior management.

Meanwhile, Argos digital director Mark Steel admitted that his leadership team does not have all the answers in terms of digital transformation.

He observed that while tech hubs are a “nice to have”, they are not as important as having the right people in place and motivating them properly, particularly because Argos prioritises building its own technology in-house, rather than buying it from third parties.

Dropbox vice-president of customer experience Adrienne Gormley told of how the company’s employees were urged to “have a jam session and find their flow” in special music rooms within the office, with staff rewarded for “noble failure” in the pursuit of innovation. “It’s been really hard for all of us but it’s been really exciting too,” she added.

The pursuit of ‘appyness

Something not everyone agreed on during the conference was the merit of mobile apps for retailers.

Steel from Argos said his company’s mobile app “enables customers to shop on their own terms” and has let his tech teams try out innovations with its most engaged customers, such as the augmented reality tool that allows shoppers to see how furniture from the catalogue looks in their home.

Starbucks’ EMEA vice-president Martin Brok also said that in the US, 40 per cent of its in-store transactions are paid through its mobile app.

However, Kumar from Charlotte Tilbury dismissed retail apps as “a fad” that did not add to a retailer’s value.

Going direct

Kumar also opined on the growing influence of brands in terms of customer spend and loyalty, with technology allowing smaller retailers to sell directly online and punch above their weight.

While the barrier to entry was “pretty high” just a few years ago, these startups can now use social media for marketing and platforms such Amazon Web Services to break into certain sectors. “There are lots of brands with turnover of between £10m and £15m who can now bypass retailers entirely to reach customers,” he added.

Danny Cohen, general partner at tech investment group Viola Ventures, agreed that increasingly the more compelling investment case was direct-to-consumer.

“The reality is that disruption is where the excitement is, so that’s where our money is – retailers need to use tech better but the billion dollar stories come from disruptors, so that’s where we are leaning.”

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