First, there were mom-and-pop stores and boutiques. Then came malls and, with them, big retail chains. After that, we got the online experience — where with just a click we can access thousands of products, order them, try them on and send them back if they don’t suit us.
People still like going into stores, however. Americans do over 90 percent of their shopping in physical stores, and the launch of physical stores by online companies, including Amazon and Warby Partner, is one of the latest trends in retail, according to New York data company CB Insights. So startups worldwide are also striving to bring new technologies to stores, to help improve the buying experience and sales.
This is what 36-year-old Asaf Shapira, who served 11 years in the Israeli army as a major in a naval combat intelligence unit, intends to do with his startup, CheckOut Apps Ltd.
“We are taking the online model offline,” Shapira, the chief executive officer of the company, said in an interview from the six-person company’s shared space office on Tel Aviv’s trendy Rothschild Boulevard. Interactive mirrors and tablets are on display, as Shapira and his team are in the midst of finalizing a product they hope to try out at a clothes boutique in Tel Aviv later this month.
“If you go to the mall you don’t see technology,” he said. “There are so many startups targeting the industry, but you don’t see it in the malls. Those who understand clothes generally don’t understand technology.”
Fashion stores use traditional static displays: people walk in, look at the mannequins and racks with items displayed, ask salespeople for help and, if service is good and quick, they may buy something. Displays are generally set up the evening before or early in the morning and remain the same throughout the day, depending on what the store manager believes will most attract buyers.
“Managers set up displays based on yesterday’s information — yesterday’s data, or an illusion of an estimation of data, not real time knowledge,” said Shapira, who previously co-founded internet marketing company Web Pick in 2010.
Stores lack smart product display tools to change what they are showing according to who is viewing; there is no immediate response to demands of customers or their purchasing patterns, Shapira said.
CheckOut Apps is planning to use machine learning to enable stores to make recommendations and change their displays, by means of interactive mirrors and tablets that will be available throughout the stores.
The interactive mirrors will provide the stores the option of displaying a wide variety of continuously changing items on the side of the screens, similar to the variety of clothes you can get online.
Customers will be able to click on the items they like, stand behind a big image of the T-shirt or dress in the center of the screen and see how it looks on them. Meanwhile, salespeople will be alerted on their smartphones or watches that a particular customer has clicked on a particular item on a particular mirror, situated in a particular area of the store. The salespeople can then hurry to the customer with the item requested, and, hopefully, be more successful at clinching a sale.
The displays will also be able to pull information from the store’s online sales point about which item is the best seller that day, and then offer good display time to those hot items in the store as well.
“The world is going toward bricks and clicks — a middle way between online and offline,” Shapira said.
Dozens of startups are working on “helping retailers bridge the gap between digital and physical commerce through features ranging from shelf-stocking robots, to augmented reality displays, to WiFi based beacons that collect data on shopper behavior,” CB Insights said in a report published in May.
“Everyone is targeting only some parts of the audience. We want to reach the widest common denominator,” Shapira said. “And we have to show our customers that our system will help them increase sales — that is the bottom line.”
CheckOut Apps software — which is still being developed — aims to be able to give stores a comprehensive solution: managing the stock in the store; knowing where each item is displayed; mapping out the stores’ best-selling clothes, tracking sales; and eventually also pinpointing high value customers, or in other words the big spenders, based on previous data. Retailers today have no real-time purchasing history available, something that will be possible once the smart system is in place, Shapira said.
The company, which plans to raise funds via angel investors, will not provide the hardware — e.g., the mirrors — but will use existing screens developed by Samsung and others coming out of the industry. It will provide the software that integrates the sensors on the screens and will manage the data, Shapira said.