How Is Technology The Biggest Driving Force For Innovation

Akshara Subramanian

Hi everyone and welcome to a new episode of The Retail Podcast by Vue.ai. I'm Akshara, the Head of Customer Marketing at Vue.ai. If you've tuned in, to our previous episodes you know we've been talking about topics that are currently hot in retail. We've been talking about store closures, collection drops, the supposed death of the store, experiential retail, convenience models, AI, omni-channel, the works. But today, we actually get to hear from someone who is incredibly influential in retail and someone who's been at the very core of everything that's been going on with retail in the last 15 years. We're very excited to have Cate Trotter, the Head of Trends at Insider Trends and the 26th most influential professional in global retail. Her experience in retail has been pretty amazing through her role at Insider Trends. Cate has helped some of the biggest brands in the world like Chanel, Marks and Spencers, LVMH, Galeries Lafayette, Nike to discover innovative ways of doing business. She's all about creating these amazing ecosystems for brands. Welcome Cate, we're very, very excited to have you on the podcast.

Cate Trotter

Thank you very much. Hello!

Akshara Subramanian

Fantastic. Cate, you founded two very successful businesses in your early 20s right. So can you tell us a little bit more about the companies you've founded and what was the idea behind creating Insider Trends?

Cate Trotter

Gosh! The story starts ten years ago. Maybe a bit more when I decided I wanted to become a trend scout. I was working in ethical marketing before that and I just realized that I love innovation and looked into it because I live in London. I looked to find out who there was to work for in London but there didn't seem to be that many people. I had a couple of chats with them to find out what it would be like and figured that I'd be working very long hours for not much money; I thought I might as well do that myself. So I knew web design and I decided to put a couple of websites online and see who responded. One of the first things I did was to do some competitor research. I looked at all the different trend agencies all over the world and I found that there were a couple; one in Miami and one in Tokyo delivering something called a trend tour or a retail safari and I thought that could be my thing. I launched Insider Trends which offered these different trend tools not just in retail but in two different areas. I mapped all the hotspots and all the innovation hotspots. At that point, I realized there might be an opportunity to package it up and standardize routes and again just to see who wanted it. That's why that ended up being two companies; that was 'Insider Trends' which was delivering strategic bespoke sessions for big brands and there was the second one 'Insider London' which offered standardised routes for school groups and office parties, that was a vehicle for lots of smaller ideas like we had the first street art store in London. It still has a very successful London Underground Tour that tells the story of 150 years of history over 2 hours. It's really fun. But I realized later on that essentially I'm not a manager, that's what I learned. So I sold Insider London and now I focus on Insider Trends full time.

Akshara Subramanian

Wow! That seems like a pretty long and interesting journey. Were there any challenges you had to go through as an entrepreneur?

Cate Trotter

I think one of the most relevant things I read was actually very much at the beginning where they said that running a business is like having two full-time jobs. There is running the business which is one full-time job and there's doing the work which is another and so I've always felt that I've always had these two full-time jobs but we are streamlining and managing this. I'm shifting more now into my role as Head of Trends at Insider Trends so other people are stepping into the management positions. So that is simplifying which it has taken 10 years to learn in various respects that. I would say it's been one of the biggest challenges.

Akshara Subramanian

Absolutely. So we notice that you know you conduct a lot of insightful thought-provoking workshops. How did you branch out into this space and do you choose to cater to a specific segment of retailers? What kind of problems are you looking to solve when you collaborate with a retailer?

Cate Trotter

Oh yes. I think it came from the fact that with the retail safaris and the presentations we are often observing what other leading retailers are doing and if you observe enough you start to develop your own opinions about what businesses should be doing. So we just found that observing wasn't enough. We had the expertise by that point to really help retailers develop and said that's where the workshop offer came from. We actually prefer that I think it's nice to help people with their bespoke shoes on a more focussed basis. Well, we don't choose who we work with; to be honest most of our clients come to us. We just answer the phone and they want some help or they see us speak and they would like some help. That's relatively simple. What do we choose to work with them with? I guess it's all just in response to what they need; How much time they have to work with us, how much and at what level of change they want to bring about. So it's really developed in conversation because we don't have an agenda. It has to be developed based on what each client needs.

Akshara Subramanian

That's so true. We've actually heard you say that to be a successful retailer, "Stop thinking like a retailer and start thinking like a tech company".Going forward, how should retailers change their innovation strategies?

Cate Trotter

I think things may be a bit more developed since I said that, but I still think it's true; that comes from the fact that technology is the biggest driver of change in retail. But what I've realized is that there are really two camps of innovation and some retailers are more comfortable with one camp and others are more comfortable with the other side. We talk a lot about iterative vs. disruptive innovation. Iterative is focused on improving the performance within the existing paradigm and the existing paradigm is around omni-channel but even within omnichannel it still says that the store is the centre point of that omni-channel ecosystem. Retailers are looking to add technology to different parts of that model to improve performance which is perfectly valid because that's still obvious how well globally 90 per cent of sales go through stores still. So it's hugely relevant. But the other way is this disruptive style of thinking which is really about thinking digital-first. There are now a series of channels and interactions that enable brands to get to know customers better to serve them better but for a fraction of the cost of selling and interacting through stores. So essentially they should be able to serve customers better for less. That I think is more of the tech company's style of thinking that you're engaging through digital-first and then you happen to sell some product.

Akshara Subramanian

Can you give us some examples of brands that have actually done that really well?

Cate Trotter

Yeah. Nike is absolutely nailing it at the moment and it's actually also quite interesting because of course they started as a traditional brick and mortar retailer or in terms of their retailing they started out thinking about store. Through their sneakers app, they're doing some amazing things that they've released. They have sneaker drops that can only be accessed through geo-location and when you go into this, a special geo-located or marked out zone you can see these particular pairs of shoes in augmented reality and you can buy them there. So that's our whole model that doesn't rely on the store; they're turning different parks into stores. But they're able to do so or in the future they'll be able to do so for a fraction of the cost of actually running a store. They've come up with a pair of shoes that you can tap with your phone to unlock or access monthly sneaker drops. So by buying a pair of shoes it unlocks the ability to buy other pairs of shoes. The shoe itself is the shopping channel. It's not again the store. I was just reading about something where they are selling shoes every fortnight now. The game is the shopping channel, not the shop. In all these different ways they're looking at how they can interact with their customers and sell to their customers through different avenues rather than just in the store. Tommy Hilfiger is doing some interesting things. Last autumn, they came up with the Explore range which is a range of chipped clothing that can be paired with a phone. Once that happens, they can award customers points based on how often they wear the clothing and where they wear their clothes. If they travel further distances when they're wearing this clothing, they get more points and I know that example freaks a lot of people out which is understandable but that also highlights a whole new way of interacting and engaging with customers. Everyone said that the store wouldn't die because we would always need to interact and engage customers through the store. But actually, Tommy Hilfiger is showing that you can do it in a more ongoing way or daily through the product itself which to me seems far more relevant than just going into the shop. So I think we're at the very beginning of interactions like this, but to me, this is a whole new way of thinking that is totally against change, which is what retail is. That is very exciting.

Akshara Subramanian

That's so true. I'm actually thinking of one of your keynote talks where you said that brands that connect with consumers emotionally don't just sell more they can sell the same things for 20% to 200% more. That's an incredible statistic. It's the kind of thing that should start coming to brands naturally. You know in fact for us at Vue.ai, our founders are always talking about the importance of taking AI out of the labs and applying it in the real world context where you know especially in industries like retail, but it can actually impact human lives. Can you tell us a little bit about how this connection between brands the so-called emotional connection between brands and consumers can help create better retail experiences?

Cate Trotter

There are two different ways you can use technology. It can either become a barrier or you can use it to link the customer and the brand. So I think whenever I started thinking about putting the technology into their stores, we saw all sorts of iPads and big touch screens going into spaces and customers of course didn't use them. And I think that's because it kind of acts as a barrier or it adds complexity to the experience which is why they weren't very successful. But we've seen other brands add technology into this space in a way that brings the customer and the brand closer together. The quintessential example of this is where there's a tech company could Spruce Labs and they actually also run their own shop called Space. In that space, they can recognize customers as they walk into this place and as they walk in, this system can access everything the brand knows about the customer, everything they've browsed, everything they've bought, everything they've said to the brand up until that point. Then this system can ping the assistant iPad with everything they know about the customer, the assistant can look at all of this information to be to become a form but then they can put the iPad down and have a highly informed yet low tech interaction with the rest. They've got a really good video online which you should have a look at. It talks about the Spruce system but it's quite interesting to see this restore because even though it's super high tech it looks really traditional. There isn't a screen in sight. And I love the idea that you can have a high tech and high touch experience. You can have the best of both. And so it is high tech but it feels more human than ever and so that is the future I think we're moving towards.

Akshara Subramanian

Yeah, I think that's why I think it's interesting you bring up these types of experiences because we're seeing the active rise of experiential retail of late. Uhmm, you know there are apartment-style stores like Sezane, there are cereal bars for kids that supposedly make a shopper feel rejuvenated once they're done sneaker shopping. You know Macy's hosted a collaborative pop up with Story and of course, the biggest thing that everybody's been talking about in the last couple of months is the launch of Hudson Yards and they did a massive experiential launch in New York and even spaces like you know the Museum of Ice Cream and the Infinity Room, they're all big things in experiential retail today. So how do you see brands fitting this into their narrative?

Cate Trotter

So I think it's is about working out what, what making a conscious choice about what type of experience you want to offer in at each point in the customer journey. We talk a lot about the fast and the slow. There are these two ways that you can improve the customer experience and some of them is about speeding things up. Once a customer knows what they want to buy, the best thing you can do is sell that thing to them as quickly and easily as possible. And sometimes customers don't want to talk to people, they know what they want and they just want to go in and get it. And the technology of course in that space depends on that type of journey or that type of moment perfectly. That's of course sometimes customers want to have a leisure experience they want to take the time to browse they want to have a chat to people.

Akshara Subramanian

Absolutely.

Cate Trotter

So these slow experiences can be supported by technology but don't necessarily need technology. So, I think I mean in terms of people and the retail experience, I think ultimately they're going to be fewer people or fewer assistants in stores but the ones who will be there will be there to bring the brand to life to be hugely passionate and knowledgeable about the brand. But there'll be more to enhance the experience share aspects of it than to process transactions, so they’ll add a new, another dimension rather than just restocking shelves. I guess so. Yeah. Be more of a conscious choice.

Akshara Subramanian

That's so true! You know I'd love to get your views on where you think AI fits into the future of retail. Do you think it can be of tangible value to brands going forward?

Yeah I think it's hugely valuable. I think it has to be almost the most important thing for businesses to think about at this point. I was told that the businesses embracing AI are now growing 30 per cent faster than those that aren't. And it just seems like AI is the way to manage a lot of complexity, understand and essentially optimize every aspect of your business. So I can't see why businesses won't embrace this and why this isn't part of the long term future for retail and almost every business going forward.

Akshara Subramanian

You know Cate you're constantly out there doing keynotes and in-depth studies on retail trends as part of your job, right? So, what's the general opinion of AI amongst retailers. Are they afraid of it? Are they starting to see the value it can bring to the business to productivity? Talk us through that a little bit.

I think people think it's more complicated than it is, to be honest. I think they think it's some magic technology that's quite difficult to apply in their businesses and really it's just a case of making a phone call to the right people and the right businesses will make it easy for retailers to get involved in AI And I think people forget we've been using AI for years. Actually, it's not necessarily a future technology it's something that's actually been around us and just makes the world work a bit better and hopefully is what it does make the world more intelligent when it's used well.

Akshara Subramanian

And can you take us through maybe an interesting example of a business that's using A. I in a way that's been impressive to you.

Cate Trotter

Yeah so, I mean one of my favourite examples is from a company called Farmstead and they're working in the San Francisco Bay area, and from a customer's perspective, this looks like an e-commerce grocery platform where the products are from local, artisanal producers but they cost similar amounts to mass-produce products available in a supermarket. And how this is possible, how they're able to offer these better quality products at lower prices is because the system is backed by AI So, this system matches supply and demand really well. And by doing that, they can reduce waste. So I think the standard level of waste in the grocery industry is what like 35 to 40 per cent whereas with Farmstead it's 10 per cent. So lower wastage translates in part into the ability to lower costs and pass on those lower costs to their customers and I think this is brilliant. This opens up a whole new offer to customers. This isn't just about making the standard method of consumption a bit smarter. This is about enabling customers to access products from new types of producers for a lot less money. And so yes it's a whole new business model I think. And I think that's very exciting and hopefully making things a bit more sustainable as well by managing. So if the A. I can manage complexity then we don't need to send various products miles up and down the country, you can actually manage a much more complicated local delivery model maybe. So yeah. It's not just about making traditional things smarter it's about opening up far more complicated and interesting ways of doing business I think.

Akshara Subramanian

That's exactly right. You know I think data is a huge part of this. I could even give you an example of one of the use cases we're looking to solve which is using automation to create rich data and e-commerce catalogues better, and you know helping brands manage their inventory better, which generally leads to better search and discovery for shoppers on the website. All of this can help them make intelligent business decisions and I think that's kind of what we're going for.

Cate Trotter

Yeah and there's I think actually also Tommy Hilfiger, they ran a project with some fashion students in New York and an artificial intelligence system and their designs. And one student brought everything together to use the AI to access individual’s Twitter profiles and Instagram profiles, I guess to gauge their personality a little bit and to see what kind of imagery they were into and based on what the AI learnt. It then created a personalized bomber jacket for us.

Cate Trotter

And so I think that is yeah more of a further future concept idea but that's where this is going, right. This is as you said it's really important to manage inventory better. But I think, wouldn't it be wonderful if you could just say to a company this is who I am or learn about me and then come up with a personalized recommendation for me - things can become so much more sophisticated than they are right now and hopefully more sustainable too.

Akshara Subramanian

Absolutely. Ok, Cate, you're obviously consulting with some of the biggest retailers in the world and you know I said that in your bio already. Given that you're always tracking how the industry works. What do you think brands should be paying attention to or things that they shouldn't do even?

Cate Trotter

Gosh yes. For me, this is quite a difficult question because I think it's all about each retailer taking the most relevant next couple of steps on their own journey. So it's in part about them understanding who their customers are, what their customers are likely to do or want next, and be two steps ahead of that. So it's not necessarily about just keeping up with the rest of the industry because everyone else says, it's actually about being in front of your own customers. I think people forget that sometimes. But yeah I think there's been a lot of talks recently. I mean yes I heard someone say that privacy is the theme of 2019's keynotes and I am really seeing that I talk a lot about how businesses can use data to optimize what they're doing but as soon as you talk about that, everyone gets really concerned about privacy. And I think at the heart of that issue is really retailers intentions. I think retailers or customers rather are getting upset about businesses accessing and using their data because businesses aren't using it with the customer at the forefront of their minds or the forefront of these projects. Whereas, I think I don't think it takes much for a retailer to truly decide to put the customer first thing. Okay, if we're gathering all this data how can we use it to benefit the customer. And then of course when you use it to benefit the customer you'll make more money. What's in your customer's interests is in your interests but no one's really making it really clear how they're using their customer's data or sense customers. Look if you check into this store we can serve you better and we can serve you better in these ways. They just need to I think, have a few more projects to tap into the data and make it accessible to customers. That is I think the biggest thing that people seem to be thinking about at the moment. That's the most general piece of advice I can perhaps look about.

Akshara Subramanian

Privacy is an interesting one. What are some of the other themes for retail and 2019?

Cate Trotter

Well yeah, I think the privacy thing and making sure that businesses get that right is probably going to be the big theme of what people are talking about. I think the real cutting edge brands are going to be running more digital-first and store free experiments. Whether they really take off with customers is another matter but of course, you have to experiment with all of this before it really takes off and as soon as it does take off, it's going to change everything. So it's worth experimenting with. I think that's certainly what I'm going to be tracking with the most interest.

Akshara Subramanian

Fantastic! So that almost brings us to the end of our podcast. But before I actually completely let you go I would like you to answer a very, very quick rapid-fire round that we have. And you know please tell us the first thing that comes to your mind. So what's your favourite social media to use and why?

Cate Trotter

Oh I like LinkedIn. It's where all our clients come from I guess and it's where we learn a huge amount.

Akshara Subramanian

What's an inspiring book that you've read recently?

Cate Trotter

So yeah the book I'm reading at the moment is about having strategic conversations and really gets into the heart of an issue with a client which I'm finding really helpful. But there is this one that I did read a few years back but it's still informed a huge amount of my thinking. That's a book called Abundance and that's by Peter Diamandis. I think I'm saying his name correctly and Steven Kotler and that's all about how the forces shaping today's world are based on exponential growth trajectories. And so really the world of tomorrow is going to look completely different to how it looks today and we really can rely on technology to change things at a very dramatic pace. So that is just a whole new framework for thinking about change and thinking about the world which is definitely relevant to the retail but is related to business related to everything else in our lives, I suppose.

Akshara Subramanian

Last question. As a leader, what do you ensure that you do for your teams?

Cate Trotter

Oh I support them. I guess I see my role more as just being around if they have questions and then letting them get on with them.

Akshara Subramanian

Well that brings us to the end of our podcast. I had a great time chatting with you on all things retail Cate. Thanks for joining us.

Cate Trotter

Okay! Well, thank you for this. It's been really nice having a chat about this.

Akshara Subramanian

If you'd like to join the conversation with stalwarts in retail who talk about fashion, AI, business models, sustainability, technology and luxury. Tune in to all our episodes of The Vue Podcast at Vue.ai/blog/podcast. Thank you for listening and see you soon. Bye.