This story was delivered to EMARKETER "E-Commerce Briefing" subscribers. To learn more and subscribe, please click here.
Nike has a new system that allows customers to design their own sneakers in-store, according to AdWeek. The new system, called The Nike Makers' Experience, is currently available by invite-only at the company's Nike By You studio in New York. Customers put on blank Nike Presto X shoes and choose their own graphics and colors to design them.
The system then uses augmented reality (AR), object tracking, and projection systems to display the chosen design on the shoes. After that, the design is printed on the sneakers, making them available to the customer in approximately 90 minutes.
Nike has also been ramping up tech investments to speed up its manufacturing process, so it can produce smaller quantities, closer to key markets.
- It's using Grabit facilities to utilize the automation company's Stackit robots — which use static electricity to assemble shoes and work at a pace 20 times faster than an assembly worker.
- The retailer also partnered with tech platform NOVA to develop virtual prototyping of its sneakers. The platform produces 3D images and material simulations to show designers how the shoes would fit. This helps Nike reduce the tedious prototyping phase — a process that can take up to a year and several samples before a prototype is ready for production.
- Nike also uses robots to paint sneakers mid-sole, which previously required the application of tape to the shoes.
Advancements in automation technology may help retailers widen their margins. For example, Softwear Automation designed a robot that can produce as many shirts as 17 factory workers in an hour. Put to use, such technology could dramatically increase efficiency and bring down overhead costs. Additionally, automation in the manufacturing process may allow retailers to sell more items at full price. Typically, retailers have to estimate demand far in advance because of the length of time it takes to design and manufacture items, often resulting in excess stock that has to be marked down significantly to be sold. As retailers shorten manufacturing times and bring production closer to demand, they will be able to sell more items at full price, boosting the profits they make from each design.
One of retailers' top priorities is to figure out how to gain an edge over Amazon. To do this, many retailers are attempting to differentiate themselves by creating highly curated experiences that combine the personal feel of in-store shopping with the convenience of online portals.
These personalized online experiences are powered by artificial intelligence (AI). This is the technology that enables e-commerce websites to recommend products uniquely suited to shoppers, and enables people to search for products using conversational language, or just images, as though they were interacting with a person.
Using AI to personalize the customer journey could be a huge value-add to retailers. Retailers that have implemented personalization strategies see sales gains of 6-10%, a rate two to three times faster than other retailers, according to a report by Boston Consulting Group (BCG). It could also boost profitability rates 59% in the wholesale and retail industries by 2035, according to Accenture.
Stephanie Pandolph, research analyst for EMARKETER, Business Insider's premium research service, has written a detailed report on AI in e-commerce that:
- Provides an overview of the numerous applications of AI in retail, using case studies of how retailers are currently gaining an advantage using this technology. These applications include personalizing online interfaces, tailoring product recommendations, increasing the relevance of shoppers search results, and providing immediate and useful customer service.
- Examines the various challenges that retailers may face when looking to implementing AI, which typically stems from data storage systems being outdated and inflexible, as well as organizational barriers that prevent personalization strategies from being executed effectively.
- Gives two different strategies that retailers can use to successfully implement AI, and discusses the advantages and disadvantages of each strategy.
Click here to purchase the full report
Interested in learning more? Join other EMARKETER clients who receive thousands of forecasts, briefings, charts, and research reports to their inboxes. >>Become a Client