“H&M will evolve from a fashion company to a data company,” and that seems to be the direction retail is headed as well. This is heavily influenced by the introduction of artificial intelligence (AI) to the sector, explained H&M’s Chief Technology Officer Alan Boehme during talks held during Shoptalk Europe in Barcelona.
His advice to the industry: data is everything these days. We need to listen to the stories data has to tell and not just limit them to just supporting the story we want to tell.
AI, the third major revolution in consumer goods retail
The three biggest technological revolutions of recent years have been the internet – the world’s most important technological revolution, one that has connected us all -, the mobile phone – a portable computer that we all carry in our pockets – and artificial intelligence (AI).
“These three innovations are changing our daily lives; how we work, how we shop and what we do and will continue to do so in the future. And that’s where we should focus our efforts, the integration of those three things and what that will mean for us,” Boehme explains.
The education would be the first step on the expert’s list of how to integrate these innovations into retail. He doesn’t hesitate to point out that the second step is to understand that companies cannot do it alone: “You have to be willing to share information with others. The only way to achieve this is to have lots of data available. And none of us retailers have that data within the four walls of our business.”
The need to educate yourself to advance
From his more than 30 years of experience in which he has been involved in the digitization of various companies, he knows: “Technology is never the problem, it is actually the easiest part. In the end, people are always the problem”.
“All support departments in companies are set up not to allow change because they’re afraid of violating a policy,” he says, citing his time at Coca Cola, a large company whose policies, often the Flow of information, including internal data, going back 150 years. Coca Cola’s main goal is to keep its recipe a secret.
“It’s becoming a culture that’s slow to change. And sometimes the best way to change them is to move things outside of the company and run small pilot projects almost in the background.” Once they bear fruit, you can start planting them before culture slows them down, says the tech expert.
It’s not just about working toward change, it’s about being willing to change.
“Every company has core values that they stay true to at all costs, but I think if you want change, you have to be willing to change,” says Boehme. As an example, he cites how the Cos brand, part of the H&M group, thought about how up-to-date inventory information could be made available online, how this would benefit workers and how it would transform how it interacted with customers. With a deadline of 60 days, they then set to work examining the technologies available on the market to formulate the most effective answers to these questions.
The supply chain offers various possibilities
“When you talk about innovation, most people think that you can do new things with data, that you have to start from scratch, but mostly the answers are already there, it’s just about innovating and connecting the missing pieces ‘ said Boehme.
This is how the H&M group came up with the idea of offering intelligent fitting rooms where customers can order items without having to leave the fitting room. The mirrors recognize products by article, size and color and also offered personalized product and styling recommendations in the pilot project at the Cos shop in Beverly Hills.
“When you come through the door, the RFID readers are embedded in the ceiling. Every product knows where it belongs when you pick it up and bring it into the fitting room. If it doesn’t fit, just touch the mirror in the dressing room and someone will bring you the right size, the right garment, and then we’ll put the old garment back exactly where it belongs,” he explains. This is how to make the most of the location technology present in every store that the company has turned into an innovative solution.
How do you make the most of customer data?
Fear of lack of privacy and security often affects trust in online commerce as people are very suspicious of the fact that data scientists are working with consumers’ data.
“At H&M, we have almost 200 million people in our loyalty program,” a number that Boehme says means you get information you can’t get anywhere else. “We need to start informing people and reassuring them when they interact with us by tearing down the walls that separate us.”
The amount of information available online today is overwhelming. All the more reason for the digitization expert to “learn to trust the machines”, the algorithms. “Let the data tell a story, their story. And don’t try, as we have up until now, to force the data to legitimize the story you want to tell.”
“We need to understand that this drastic change in business people will shape the way we need to look at the new world”
Boehme reports how a few weeks ago he spoke to a fashion company that describes itself primarily as a social media company and only secondarily as a fashion company because it works with influencers. This led him to understand this social communication as a kind of business activity.
“I think that at H&M and other brands, we need to rethink where we are, how we fit into this new world and how data will affect the future” to make further progress, Boehme said. “We’re still halfway there,” but from his experience in Silicon Valley, he knows that artificial intelligence is the future, because “there they only invest in AI”.
That’s why “we have to understand that this drastic change in business people will shape the way we have to look at the new world,” summarizes the H&M chief technology officer.
This article originally appeared on FashionUnited.es. Translated and edited by Simone Preuss.