The Fashion Retailer

While I was writing how technology is impacting the retail business (book to be published in the coming 2-3 months), a young entrepreneur from Danemark contacted me through LinkedIn asking for advice. Morten presented me what Zliide could offer to omnichannel players when it´s time to rethink stores and customer experience. I didn´t hesitate to include it and share his experience. These are a few words with him…

Morten Mogelmose (MM): Morten Mogelmose is the co-founder and CEO of Zliide. A danish based retail tech startup. He is 24 and founded the company after returning from London. The company is based out Denmark and has raised money from some of the leading VC’s in the Nordics and has been awarded as one of the most promising startups in the Nordics by MasterCard.

The Fashion Retailer (TFR): What is Zliide?

MM: So, at Zliide we build a single platform that enables customer to get the most convenient experience in fashion retail, ensuring the best experience in-store and online.

We do this through the Zliide tag, which is basically a security tag that replaces the current tag on items in-store. This tag is though very different as it is digital, and customers can interact with it by a click, and then all the information of the item will be displayed on the customers phone, like descriptions, pictures videos etc. and if the customer wants the item, they simply pay wherever they are in the store through their phone, and the tag will then unlock automatically and the customers can remove it from the item. The tag also enables data collection from the store, just like e-commerce.

Further, when the customer leaves the store, they can see all the items in the store, as the tag will display live inventory at all time on the customers’ phone. They can then purchase anything directly from the store, and if they live in the same city as the store, the order will be delivered the same day.

We are currently testing 3-hour delivery in 4 major cities in Denmark, with great success.

TFR: What is the entrepreneur story that inspired the launch of the company?

MM: The idea came after a trip to Oxford Circus in London. I was in a really nice store, where it was obvious a lot of money had been spent by the brand to make it a nice visual experience. But for me it stopped pretty quickly, I couldn’t find store staff to give me more information on the shirt I was looking at, and when I went to pay, I had to wait in line for 5 minutes, just to hand out my money. I thought to myself, there is no way this experience is going to hold up in the near future, otherwise I might just go to Amazon and save the trouble.

So, I just observed that, when the security tag was removed by store staff, the item could leave the store. So why not combine that with a payment and a digital experience? So, when I returned to Denmark, I found some people to help built out the mvp and then it took off from there.

TFR: The Fashion Retailer commented about the social impact, and the short to mid term strategy to face Covid-19 by fashion retail companies. Stores will have to reinvent their purpose as many customers won´t feel safe trying clothes on or waiting time in lines. Customer experience is central to digital transformation and even more during the Covid-19 context where online and offline are merging.

What is your vision for the future of retail? How has the customer journey changed?

MM: I hope we will start to see retail adapting to best of breath technology that has a direct impact on the customer experience. In past years the talk of omnichannel has been a hot topic in the industry, but I don’t believe that many customers will say they had a vastly better experience because of the current implemented initiatives. I believe and hope we will start seeing retailers starting to invest in technology that has direct impact on the customer, and not as much on back office optimization.

As the customer journey can start anywhere today and is hard to control, I think it will be about how to retain customers afterwards and connect their whole journey. And this is where technology and infrastructure can be beautiful for retailers in areas of last mile delivery, try-before-you-buy, self-checkout and so forth. In creating this retention, a key will also be data collection, especially from the physical store, as this is currently an almost completely untapped market, mainly due to the lack of adaption to technology. But retailers with physical stores will have a massive advantage over platforms if they manage to collect data from their stores like online.

TFR: What are the retail challenges Zliide is solving?

MM: So, we are only focused on fashion retail. But here we are trying to solve 3 major problems.

The first is the customer experience. Here we basically want to enable the customer to walk into a store with headphones on, get what they want and walk out, but also to give them the same features they are used to from online – just in-store, such as wishlist, product information, recommendation etc. And while customers, who simply don’t want to talk to anybody, are able to check-out without interaction with staff, those who want personal service are able to get it, as staff has more time to do so.

We believe a digital service is the best service a store can provide. The second problem is data collection. This is a biproduct of the digital experience, when customers engage with products and use the features like they do online, we collect data that create value from day one, but also build a foundation for a more competitive future.

The third problem is online. We believe marketplaces will continue to grow rapidly and capture more customer as a one stop for all brands. This is tough to compete with if you just have an ordinary e-com shop for your brand. You might have good revenue, but the profit can quickly disappear into advertising and acquisition of the customer. Here we capture the customers in the physical store and enable the brand to use our platform to sell further items after they leave the store, tapping into one-click checkout, same day delivery and collective advertising.

TFR: Leading Omnichannel retailers have already implemented RFID. Its benefits include: customer experience improvement thru connecting garments to smart windows; accurate inventories and traceability; reduce loses and alarm; prevent counterfeiting; reduce in-store administrative tasks…

Putting the Zliide security tag would increase administrative tasks in this case. If your security tags replace the standard system used by many retailers or department stores, how do you plan to integrate it to RFID tags?

MM: That is a great question. So, first and foremost we see RFID as a great solution for supply chain management and optimization of in-store operations. But we don’t believe RFID will be able to elevate the customer experience to the next level. RFID has been around and used for many years now by a lot of retailers, and I don’t think we have seen a whole new elevation of the experience or data collection that was first expected.

It is a great technology for back office optimization and to save money and make tasks easier as you also mention. But the key in the future will be to capture customers with convenience and experience. I have been in many stores with RFID and walked out with the same experience as to a store that didn’t have RFID.

Mounting the Zliide tag is the same process as mounting an RFID, but just with a hard tag instead, but we don’t focus on optimization, even though we can do inventory count by a click, change prices live and much more. We focus on how the customers has a wow-experience worth telling others about and return for.

Therefore, the vision is to co-exist with RFID as RFID has many features in supply chain that we don’t.

TFR: Companies are accelerating their digital transformation, specially in e-commerce. Online sales are increasing by double-digit, but does anyone know the current costs of reverse logistics?  

What are the e-commerce pain points in your opinion?

MM: E-commerce has also been around for some years. The increased accessibility, selection and ease of use has definitely contributed to the growth but also helped on the way of physical stores not changing in the past decade.

I believe we over the next years will see a revolution in e-commerce. On one site in how products are sold. I think China has some interesting things going on in the social and gamified field of selling. 

But the second thing that will change is fulfillment and delivery. If we look at Amazon, they are investing heavily in their delivery service, and I don’t believe we will see delivery times of 1-2 days be the standard in the future. If I can get a pizza in 30 minutes delivered to my door, why should I wait for my t-shirt that long? And the ones who provide this service, is the ones customers will return for.

So, it’s going to happen. The interesting thing here is, that retailers with a broad footprint of stores have a major advantage over the online born retailers with massive warehouses. The thing is, it will be more expensive to ship from stores in the beginning, but this will also become cheaper over time – and I believe a lot cheaper than warehouse fulfillment, as leveraging current staff and inventory will be key. But retailers should take the bet early on, and team up with companies that can help them become leaders. If successful, this is something that could be an interesting driver in the future.

TFR: Digital transformation is a big topic in retail. Many companies are investing in cloud-based solutions, specially in regards Point of Sales (POS) and Customer Relationship Management (CRM). How does Zliide connects to these systems?

MM: So, we have taken an approach of simplicity, which is something a lot of companies is of course saying. But what we aim for is pretty much to have as few integrations as possible with the brand. Thereby we have managed to create a system that on a pilot stage only have a technical set-up time of just a few hours. We realized that a lot of the systems in retail are often old and difficult to work with, so we build as much as we could on our site, to make it easier on their end.

TFR: Who owns the data? Do you plan to use the data in order to offer benchmarking services (sales by gender, category, color, price point…)?

MM: So, the brand is the owner of the data collected in the store, and we also give them access to user data in order to enrich their own data. Everything is under strict GDPR compliance which is something we care a lot about. From there, the brand can work with the data or let us work with it, so they get the most out of it. But we don’t share data between brands. We see ourself as a tech-provider so the overall goal for us is to help the individual brand in the best way we can.

TFR: What is the worst and best side of being an entrepreneur? How do you keep your team motivated consistently?

MM: I think the worst thing is that you are never satisfied. I always strive to make our product better or get better metrics for our customers, even though everything is already over the top. When you are passionate about what you are doing it’s often hard to relax and settle.

On the other hand, the best thing is without a doubt seeing customers loving our product. We recently did a survey of the customers who had used Zliide in-store to checkout and 97% where either “happy or extremely happy” with the experience, so that is without a doubt worth all the hard work.