IOU.io industry focus 3 of 4: Fashion
By Edward W. Mandel
While I strive to open these posts with some pithy remark, sometimes I just have to tip my hat to someone who says something better than I ever could. So I cede the opening word to an unsigned article on WWD. (Note to WWD’s editors: Whoever wrote this deserves a byline!)
“The retail industry is already on track for a record-breaking year in 2018. Unfortunately, that record is for the amount of retail square footage expected to be vacated.”
The IOU.io team salutes the scribe who goes on to quote fashion-oriented private equity investor Mortimer Singer as saying, “Taking a proactive approach to blockchain implementation presents the retail industry with an opportunity to change the narrative from retail apocalypse to retail innovation. [Adopters can then identify] relevant users who have raised their hand and are willing to engage with marketing messages, reducing the reliance on advertising with Amazon, Google, and Facebook, and instead allocating those budgets to what matters most: Shoppers.”
Strike a pose
Singer’s case in point is Shopin. This fashion ecommerce aggregator’s main value proposition is that blockchain technology provides more precise advertising vectors than the inferences made based on cookies or pixel tracking. By focusing on purchase data rather than eyeball data, then sharing each shopper’s profile — with their consent — among subscribing retailers, everyone wins. Buyers aren’t inundated with stuff they have no use for and sellers can be assured that their advertising budget is well spent.
Shopin — which interfaces with buyers as a phone app — offers an insight that would inform the entire ecommerce ecosystem, and we here at IOU are taking notes. Still, the immediate goal of Shopin CEO Eran Eyal is to zero in on the apparel market.
“To get started, shoppers are asked to participate in a fun, gamified Shopin Profile on-boarding experience where they are asked questions about their styles preferences, fashion aspirations and sizes,” Eyal tells WWD. “The more information they share with their profile, the smarter the Shopin AI-powered recommendation engine becomes, and shoppers are encouraged on an ongoing basis to enrich their profile by uploading photos of styles they see in magazines, on the street, in clothing stores online and offline.”
Blockchain offers unique styles for unique individuals, whether or not they’re players in the Game of Thrones. Credit: Benjamin Skinstad
Of course, Amazon relies heavily on purchase data. So the question then becomes, “Why blockchain, when standard Web 2.0 technology is already doing this successfully?”
Because successfully is not the same as optimally. And, unless you keep up with what is state-of-the-art optimal, you can’t continue to be successful. As you’ve read in this space before, even Amazon isn’t immune from disruption.
Frockchain
There’s lots wrong with how Amazon — and such enablers as Google and Facebook — direct their advertising. Ever buy a vacuum cleaner online then, before it’s even delivered, get bombarded by ads to buy more vacuum cleaners?
Also, these legacy Web companies still rely on inferred data to an embarrassing degree. True story: A friend of mine, an American gentleman of European descent, started up a personal relationship with a lady who happened to hail from Beijing. I don’t know any further details of their couplehood, but apparently Google knows exactly as much as I do — and as you now do. What I can tell you about my friend, having seen him in the company of several other women over time, is that he doesn’t appear to have a specific physical type that he’s attracted to. He admired this woman because she was not only objectively pretty, but because she was an intelligent, educated professional who shared many of his interests. That she was Chinese was utterly beside the point. So imagine his surprise when, suddenly, every banner ad he saw was an invitation to “Meet Hot Asian Women”.
Why did Google suspect that my friend has a kink for epicanthic folds? That’s anyone’s guess, but the explanation he subscribes to is that he exchanged frequent texts with someone whose cell phone was registered to a Chinese name, these texts occasionally included Chinese characters and, more frequently, emojis featuring hearts, hugs and kisses. Based on that, he tells me he’s glad he never looked into adopting children from overseas.
But we’re veering from the topic, so let’s get back to it (and not a moment too soon).
Blockchain offers greater functionality than standard HTML5, and that accrues to the benefit of online fashion retailers. Perhaps the most noteworthy new capability is the confluence of supply chain and marketing.
“Imagine the possibility of easily tracking a garment from the material that was used to make it, to its purchase in a store or on a website,” according to fashion retail dev-ops house CGS. “Just think what it would mean if consumers could use their smartphones to scan a tag on a jacket, pants, shoes or any other article of clothing, and instantly read the authentic story of where and how it was made. Transparency and traceability could be designed into the production and distribution of apparel. Sustainability could be proven. Customers could choose what to buy with new confidence.”
Blockchain also enables the trend toward individualism as opposed to mass-market appeal among younger buyers — not to mention a lot of us older buyers.
“An initial fashion product-tracking blockchain application could be revolutionary in a grandly democratizing way,” fashion podcaster Charles Beckwith writes in Business of Fashion. “It could be employed to create a decentralized marketplace data pool that would be used to feed many different types of new curation and interaction tools, whether online or in-store, preventing companies like Instagram and Google from having too much sway over curation in the long term.”
Ready to wear
Of course, no discussion of blockchain’s advantages in any ecommerce space would be complete without addressing security and privacy concerns, as AdWeek does here and which is probably already obvious to most readers of this blog. Ditto for the tokenization of loyalty rewards.
But that’s almost beside the point. Ultimately, apparel buyers are going to prefer vendors who don’t waste their time and sell them only what they might reasonably be expected to buy.
And that is exactly what IOU intends to do: protect buyers’ privacy and improve their shopping experience while maximizing the vendors’ marketing reach. If the old Web could handle that best, that’s where we’d stay. But it’s blockchain technology which is moving these capabilities forward, and we don’t intend to be left behind.
Last week, we took a look at how the gaming industry could benefit from the confluence of ecommerce and blockchain technology. In coming posts, I’ll also take a look at the fashion industry and on-demand services. Today, though, let’s zero in on how the travel industry stands to benefit from the kind of approach the IOU.io team advocates.
Cleared for takeoff?
If you ask me, it’s a wonder the airline travel industry survived online this long without blockchain. Everything about it is a use case.
Let’s start with loyalty rewards programs. Ultimately, that’s what utility tokens are, or purport to be. I know a guy who, back in the Web 1.0 days, found sites that served as exchanges that enabled him to trade his Delta (“Don’t Expect Luggage To Arrive”) loyalty miles for USAir (“Unfortunately Subject to Accidents In Recurrence”). And, apparently, there were people on that site who were willing to pay dollars to accumulate either. Net-net, this guy accumulated enough loyalty points that he was able to sell them for enough money to buy a house.
I’m not making this up. I can document it if you really want to call baloney.
But this guy is a weekly business traveler. He was an IBM consultant at the time, so he was smart enough to figure out how to maximize his accumulation of Sky Miles and attentive enough to churn through AskJeeves or AltaVista until he found out where he could monetize them.
Imagine if a travel site had this as a feature that someone of average intelligence and travel experience and tech savvy could do the same thing.
Of course, hotel chains and discount aggregators have loyalty programs too, and wouldn’t it be nice to exchange Delta Sky Miles for Hilton Honors points or Hotwire nights?
There are, however, other ways airlines would benefit from adopting blockchain technology as part of their ecommerce processes. Billing and settlement planning is probably the most obvious. (So why hasn’t Hotels.com’s Captain Obvious figured this out yet?)
“The future of building a billing and settlement plan on top of a blockchain model, however, means advantages that cascade into the heart of operations throughout the travel industry,” according to Further Network’s sponsored content on travel industry intelligence site Skift. “Blockchain solutions bring the real-world, real-time potential of lower transaction costs and better profit margins to travel organizations in all verticals.”
Further Network, which is promoting the ICO of its ATON token, goes on to drill down into how that can happen.
Travel industry blogger Martijn Barten also identifies luggage tracking and traveler identification as ways in which airlines would benefit from blockchain adoption. He also identifies no less than six distributed ledger companies that are already filling these niches.
Vacancy signs
Clearly, this space is still evolving but the entire travel industry — hospitality and car rental as well as airlines — is starting to pay attention to blockchain. And some startups are emerging as leading purveyors.
The one getting the most press right now is DarexTravel, which is leveraging its DART token to provide a payment solution that mimics such aggregator sites as Expedia or Travelocity.
Vancouver-based CozyStay is basically an AirBnB clone for Chinese visitors to North America. These travelers don’t want to give out any more information about themselves than they absolutely have to for passport control, and they might wish to transact in cryptocurrency rather than greenbacks or looneys. Interestingly, I get all this from a report on CozyStay on the Business Vancouver website. As far as I can tell, CozyStay’s own site doesn’t even mention blockchain or cryptocurrency, and only obliquely mentions renters’ privacy concerns.
A more aggressive marketing campaign has been launched by LockTrip. It claims to offer at least 2% less per room at more than 100,000 hotels worldwide than you could get through any legacy travel site. All you have to do is buy LOC utility tokens, which seem to be in a tight trading range between $0.55 and $0.60.
Travel plans
The secret to a successful blockchain travel company launch has not yet been revealed, but there’s certainly going to be more than one winner.
Just take a look at how diversified the existing travel industry is. There are aggregator sites that do nothing but aggregate other aggregators. And although Uber and Lyft have almost put yellow taxis out of business in some cities, AirBnB hasn’t done the same to hotel chains — or even to independent, boutique lodgings. Of course, every time an airline’s salaries and benefits gain in proportion to its success, a new “no-frills” airline will scale up and offer the same routes with much cheaper fares. And so far, nobody in the crypto-asset community has really elbowed their way into car rentals, guided tours, intercity bus or sightseeing destination markets.
So who knows? Maybe blockchain will disrupt the existing travel industry, or maybe this’ll be one of those occasions when the legacy businesses adopt the new technology before some upstart beats them to it.
Edward W. Mandel is a strategic advisor for IOU.io , he is an Ernst and Young Entrepreneur of the Year Finalist, Blockchain Enthusiast and visionary behind many successful organizations. An avid entrepreneur, Edward has a knack for designing distinctive business models complemented with superior technology to deliver unparalleled service and profitability. Edward also has been advising and consulting for various successful Blockchain technology and ICO projects and recently launched his own BQT.io P2P Hedge Exchange helping traders connect with each other to leverage their crypto assets.
IOU is a blockchain-based peer-to-peer platform designed to unify ecommerce transaction and customer retention processes, incorporating trade-able IOUs. It is currently raising capital through ICO. The platform can be found online at IOU.io and its community on Telegram at https://t.me/IOUCommunity.
