AI, 3D, VR, AR and a new CTO - you can't fault Williams-Sonoma's digital ambition

Profile picture for user slauchlan By Stuart Lauchlan March 15, 2018
Summary:
With a new CTO and big plans for more tech investment, Williams-Sonoma remains ahead on retail digital transformation.

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US home furnishing specialists Williams-Sonoma has been one of the more successful exemplars of retail digital transformation that diginomica has been tracking - and also one of the more ambitious in terms of bleeding-edge tech, such as augmented reality.

Those ambitions continue to ramp up as CEO Laura Alber wants to turn Donald Trump’s tax cut and invest half of the benefit into further tech and digital investment:

In the context of our overall performance and plans for 2018 and given the benefits of the recent tax reform…we will also accelerate our digital and supply chain investments to improve the customer experience, which we believe will result in increased sales and reduced costs.

It will also bolster customer engagement and improve the overall customer experience, which is consistent with the retailer’s history, she adds:

For more than 60 years from Chuck Williams and our first Williams-Sonoma store, we have been focused on customer experience, and his attention to the customer is deeply embedded in our culture today. Our service platform extends from online and how we talk to our customers there and all the way through the last mile.

Alber is aiming high - the objective is digital leadership, she states:

When we say digital leadership, e-commerce, that includes everything from the technology supporting a friction-free shopping experience to our investment in driving new customer acquisition and engagement online.

To expand our digital leadership we [have] accelerated our investments in technology and advertising to drive new customer acquisition, conversion and an improved shopping experience.

To highlight some key accomplishments, we enhanced the product storytelling and functional experience of our mobile sites across all of our brands. We made meaningful improvements to our sites and our e-mail personalization program to deepen customer engagement, and we leveraged our digital platform to elevate our cross-channel customer experience with the launch of buy online, pickup in store for the Williams-Sonoma brand, and more recently, for Pottery Barn Kids. We initiated the process of re-platforming The Key loyalty program with a vastly improved mobile and in-store experience.

In digital advertising, we shifted our ad spend to top-of-funnel vehicles that drive brand awareness, social media campaigns that inspire new and existing customers, and in cross-brand initiatives, such as The Key, to increase customer engagement and cross-selling opportunities across our brands.

A new CTO

The payback for this spend was a 5.5% year-on-year growth in e-commerce revenues for 2017, with the last quarter’s growth topping 8%.

Also towards the end of last year, Williams-Sonoma announced its acquisition of
Outward, a provider of 3D imaging and augmented reality platforms. Alber says this will play a big role in wider plans for 2018:

We believe Outward has the technology as well as the tech talent to help us further accelerate digital innovation and drive meaningful impact throughout the business. Over the next year, we will integrate Outward technology in all of our core brands to improve product visualization and design capabilities. This will further elevate our customer experience, increase conversion and reduce returns.

In e-commerce, we'll focus on removing conversion friction by re-platforming our mobile sites to progressive web app technology, streamlining our checkout process and implementing the next-generation of our machine learning, on-site search and personalization experience.

There’s also plans to take Williams-Sonoma tech successes and leverage them to build an ecosystem of partners and expand international reach:

We are taking advantage of a substantial opportunity in curating an online marketplace in our Pottery Barn brand. We are partnering with synergistic, high-quality vendors to significantly expand our online-only direct-ship assortments in underserved categories, trends and aesthetics. This online marketplace will give us the ability to accelerate growth without inventory cost and to test new products and price points.

In the international market, we have a tremendous opportunity to become the world's leading specialty multi-channel retailer in home furnishing and housewares. In 2017, we successfully entered South Korea and Ireland, launched our e-commerce presence in Canada and expanded our presence in existing markets. We grew our global presence by almost 40% over the past year to a total of 128 selling locations We have plans to open new West Elm locations in the U.K., both company-owned and with existing partners. We will introduce Pottery Barn Kids to the U.K. market through our John Lewis Partnership, and this increased retail presence will also drive growth in our fast growing U.K. e-commerce business.

All of this is dependent on strong technology leadership of course and to that end, William-Sonoma has picked up someone with a track-record in the retail sector to its new Chief Technology Officer. Yasir Anwar was previously Chief Technology Officer at Macy’s and prior to that, the head of platform engineering at Walmartlabs. He’s also been the head of engineering for Samsclub.com and led architecture for walmart.com. He has strong views on priorities ahead:

Our immediate focus for 2018 will be on mobile excellence; friction-free shopping; supply chain optimization, doubling down on Buy Online, Pick-Up in Store; and increased personalization and relevancy through content and visualization techniques.

That’s all fairly standard stuff in today’s retail sector, but there are more ambitious goals as well:

We plan to shift our culture from output to outcome, to use efficiencies that can be reinvested towards the business growth. We will tap into and leverage important technology trends like augmented reality, virtual reality, Artificial Intelligence and machine learning as the underpinning of everything we do in technology, cloud computing and robotics.

On the Outward acquisition, Anwar sees this as major asset to work with:

We are already at the edge of the 3D visualization technology through a recent acquisition of Outward. We work closely with our Outward team to scale and innovate and to help define industry standards around 3D visualization and its application across AR and VR and other mixed reality applications. We are exploring ways to automate and remove friction in all applicable areas of our business to become faster, nimble and more efficient by commoditizing machine learning throughout our company.

AI and machine learning are clearly topics of considerable interest, particularly around supply-chain management, as Anwar explains:

I strongly believe that the current availability of technology frameworks in the industry, especially Artificial Intelligence and [the] application of machine learning for these type of activities, which is supply chain, inventory optimization and distribution center optimization, is going to be very powerful for us.

I'm personally very passionate about powering up the machines and getting them do the work instead of a lot of manual work, which takes a lot of cost into the system. We believe we're going to drive our top line growth also by applying machine learning in supply chain world, would also deliver a lot of cost efficiencies, which can then be invested in the top line growth.

My take

As I said at the start, an ongoing exemplar of digital transformation in the retail sector - and not one where lack of ambition can be pointed to.