What Fashion Retail Tech can Learn from Food Tech

Sara Ahmadi
Aug 22, 2017 · 5 min read

Bricks and Mortar stores are apparently on life support and ever since the first dot.com boom, the heady days of eBay, and more recently Amazon’s venture in Fashion, the death cries of Bricks and Mortar have become louder and louder.

Retail Tech has moved in on Marketplaces and E-Commerce, ignoring the physical store, although 90% of goods are still bought in-store. Conversely ‘Food Tech’ has forged ahead to provide online tools for offline outlets, Opentable, Grubhub and Deliveroo in the UK facilitate the digital connection, allowing more choice and convenience for customers and more revenue channels for food outlets.

What the startups in the Food Tech haven’t done is, say ‘hey you can get a burger delivered so what is the point of having an actual Shake Shack, let’s just have a main distribution center.’

Instead they have understood the importance that consumers place on the experience, on experiential retail and the sense of discovery.

Niche not distribution center

The coveted Millennium sector, the largest ever demographic that is treated as one giant monolithic, even though the oldest in the group are 37 years of age[i] and could have grandchildren! They don’t like mass-produced and marketed goods, and are being blamed for the decline in Big Beer sales[ii], Diamonds, increases in Avocado prices and the California drought with their insatiable appetite for Almonds.

This group is fueling the growth in niche restaurant takeout, resulting in the food delivery sector growing to a staggering £3.6billion in the UK last year alone[iii]. This sector is not dominated by a handful of big-players, and the majority have a bricks and Mortar presence.

Photo @thisismoney

In NYC there has been a rise in ‘ghost’ restaurants opening just to cater for online delivery demand. These outlets have a city address and are a by-product of the success of tech enabled food delivery and are dependent on tech for; discovery, delivery and the trust customers place on Grubhub/Uber Eats/Seamless.

Even the ‘Ghost’ restaurants are not mass distribution catering facilities, they are not generic factory kitchens pushing out ready meals, they are made-to-order operations.

Yes, there have been some notable failures like the closure of David Cheung’s $20 million VC funded Maple. However, it could be argued that the set meal format put customers off.

So why has this innovation been lacking in Fashion Retail? Albeit both Fashion and Food are notoriously difficult industries to crack, the sale of clothes and food have been present in one form or another for majority of modern history and is continually evolving. Why has Food Tech managed to spur growth based on physical food outlets whilst Fashtech hasn’t?

The Main Problems in Fashion Retail

1. Refusing to adapt to Consumer Expectations

Want a burrito now? There is a myriad of apps to discover a new place nearby, book a table, see the calories, order for delivery, get a recipe and get the ingredients delivered.

We are living in a digital economy; we expect to have all the information we want at our finger tips, Webroom, Showroom, price comparisons, reviews, and if this information isn’t presented at the point of decision making we move on. We want out online tools in the places we shop.

2. Choosing Vitamins over Painkillers

Food Tech continues to solve simple value propositions; want to book a table at a restaurant, want a take-out, want a happy hour deal, want home delivery, want to search for reviews, ok do this in a few clicks.

There are start-ups that argue (and have raised VC funding) that dead inventory fashion is to do with poor fitting clothes, ignoring the fact that the clothes and stores are uninspiring and quite frankly poorly designed. Others are offering in-app RFID enabled checkout, ‘Complete the look’ Sale Associate apps and so on. All are brilliant innovations but are not solving the problem in hand which is if the consumer doesn’t know the store exists, all the AI powered tools for the sales associate are pointless.

3. Department stores

Millennials want ‘Instagramable’, brag worthy experiences, they want to be able to tell their friends where they picked up a small-batch Vodka even if is at an off-price retailer. Being able to order a whole lobster with Champagne to your studio is Insta worthy, buying a cut-price Calvin Klein sports bra in Macys is not.

Department stores and Mall retailers haven’t adapted to the new reality. They are stuck in a time warp, where they were the only players in town, the only place to buy a Michael Kors bag or an Estelle Lauder Mascara. Those days are long gone and are never ever coming back, and assuming moving online will solve it all is naïve. Macys became a cut-price retailer without any of the endorphin like joy of finding a 70% designer skirt

4. Founders & Investors

Fashion Retail is considered risky. Start-up founders have been slow to tackle physical retail, many have accepted that the format is dead, & instead focused on the more glamorous investable ‘deep’ tech sides of AI, VR and AR. Now with the growth of delivery networks, logistics are in vogue and fashion is the ideal testing ground for new reality tech, more founders are coming into the sector, yet don’t appear to want to solve the basic issues.

A lot of money has been invested into marketplaces, low barriers to entry have led to a heavily saturated market.

What Foodtech has got right is right is providing customers digital tools & efficiency in the physical environment, until FashTech does this, the problems in industry are not going to be solved.

Next time, Fashion Retail’s next chapter.

Sara is founder of Shopest, a retail discovery platform that connects shoppers to retailers in real time.

[i] http://www.goldmansachs.com/our-thinking/pages/millennials/

[ii] https://www.cnbc.com/2014/11/07/why-those-elitist-millennials-hate-big-beer.html

[iii] https://www.theguardian.com/lifeandstyle/2017/mar/03/restaurant-takeaway-delivery-boom-uk-deliveroo-ubereats-food

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