Driven by the spirit of innovation and a focus on customers, our team is made up of
designers and engineers who won’t settle for the status quo. We thrive on continuous
improvement. And of course, none of it would be possible without our fearless leader, Dr.
Nadia Shouraboura. A retail revolutionary, she has wide ranging talents and bold vision; she
holds a Ph.D. in Mathematics from Princeton University, has extensive retail and technology experience,
and was former head of Supply Chain and Fulfillment Technologies for Amazon.com.
Nadia also served on Jeff Bezos' senior leadership team responsible for overall direction and operations
Breaking All The Retail Rules
By Matt Pillar, mattpillar.com
Soviet Russia was a decidedly uninspiring place for young Nadia Shouraboura. Buying shoes meant taking anything close to her size that the Central Department Store had to offer. Style and fit weren’t on the list of purchase criteria. Choice was virtually nonexistent. The closest thing to a positive grocery experience was being rewarded with something—anything—for standing in a long line for a long time. The dismal reality of “retail” during her formative years in Russia is one reason you might consider her rise to retail tech pioneer status improbable.
In reality, it was the stark contrast between shopping in her native Russia and the retail experiences she enjoyed after immigrating to Israel and traveling the world that inspired her. Shouraboura’s mathematics and science education landed her work as a software developer working on computer aided design systems for industrial robotics. That work put her on the fast track to a full-ride at Princeton University, where she earned her PhD in mathematics. Important work in the energy sector followed, where Shouraboura made a name for herself developing software algorithms for the energy trade. Through it all, the allure of retail beckoned.
In 2004, Shouraboura joined a then-fledgling Amazon.com. It was early during her tenure at Amazon when Shouraboura made it a priority to break away from her workstation frequently to gain firsthand experience of the company’s operations. During a month long commitment to the call center—where she actually worked the phones and took customer calls—that Shouraboura had one of those moments that would define her mission for years to come. “More often than not when a customer called, it was to inquire about an order or when a backordered item would be in stock and shipped,” she says. “In the early days, we had no answer. After a month of practicing every possible way to say ‘I don’t know,’ I dedicated myself to that question.”
Her relentless pursuit of supply chain certainty led to Shouraboura’s management of software development, infrastructure, and operations for the technology that powers Amazon’s worldwide supply chain and fulfillment operations. That landed Shouraboura a coveted slot on Jeff Bezos’ elite “S Team,” where her work proved foundational to Amazon’s rollout of several product categories including books and appliances and, ultimately, apparel.
The apparel rollout preceded another defining moment for Shouraboura. “We had a lot of experience launching new categories, so we modeled our apparel rollout in similar fashion to the rest,” she explains. “Every Christmas season I would work our call centers, and I learned that the apparel rollout gave rise to a new common customer challenge. Clothes that didn’t fit had to be returned, and the e-commerce model wasn’t conducive to that. It was nearly impossible to make returns a good experience, which wasn’t good for customers, and it wasn’t good for us.”
The Pitfalls Of The Physical Store Experience
Years removed from her lackluster childhood experiences buying footwear and apparel in Soviet Russia, the apparel rollout at Amazon rekindled Shouraboura’s passion for the physical retail experience. In 2012, Shouraboura made another seemingly improbable move. Seeking to focus solely on improving the shopper’s apparel buying experience, she left Amazon. She walked away from the revolutionary e-commerce marketplace that she had so much skin in creating to pursue a vision that she’d been harboring for decades.
Shouraboura opened a store. To be more precise, she opened a brick-and-mortar store. Admittedly, she knew very little about what she was setting out to do.
Shouraboura played a central role in the early growth of Amazon. If she could quickly take new categories and concepts to scale there, how difficult could it be in a physical sales environment, where she could personally attend to shoppers’ needs?
She appointed herself sole proprietor of self-financed Hointer, a high-end Seattle men’s denim store she opened with her own money. She studied denim relentlessly. She got to know all the top designers, and she stuffed her store racks to the gills with expensive inventory. In 2012, she opened her doors in altruistic pursuit of her dream. She envisioned spending her days helping shoppers discover their styles, focusing on the fashion, and delighting her customers.
Six months later, Shouraboura was on the verge of closing up shop and cutting her losses.
“The experience was horrible,” she laments. “Instead of improving the personal experience of fashion retailing and selling lots of jeans, I spent six months chasing and folding clothes. My displays were a constant mess. The fitting rooms were a constant mess. I hated customers. I hated the whole experience.”
Rather than quit, however, Shouraboura doubled down. She decided to change the physical retail apparel experience from the inside out. Acknowledging that her life as a retail sales associate was miserable, she began to think about running a store from the associate’s perspective. “The more I thought about it, the more clear it became that if I wasn’t having a good time, neither were my customers,” she says. Ever the observant recorder of equations, she decided to change her perspective. She began by charting and analyzing the customer experience instead of her own as a storeowner. She found that ultimately, her customers weren’t trying on enough clothes, and if they weren’t likely to buy what they weren’t trying on. “My customers would pick a few items and go into the fitting room. If it didn’t fit, they’d have to get dressed and go find something else. They would only repeat this process a couple of times at most before yelling through the fitting room door for associate help to find another size.” The traditional means of delivering that assistance proved no more pleasant. There’s something decidedly uncomfortable and awkward about hands-on personal interaction between a female store associate and a man in his underwear. “They would ask me once to bring them another size, rarely twice,” recalls Shouraboura. “The reason they came to my store was to try on clothes, but it was so awkward and cumbersome, they wouldn’t try on enough.”
A Petri Dish Of Retail Experimentation
Shouraboura’s solution to the physical retail experience conundrum at Hointer would raise a lot of eyebrows. Drawing on her experience designing Amazon warehouses, and her experience with robotic automation before that, she made a radical change to her store’s design and operations. She completely removed the stacks and racks of jeans from her store, save for a display model of each style and wash. The sales floor became a showroom instead of a stockroom. Inventory was arranged in orderly fashion in a micro warehouse in the back of the store, invisible to customers. Fitting rooms were equipped with two chutes—one in, one out. Using an app, shoppers punch in the style and size they want, and in fewer than 30 seconds the item is delivered to the fitting room via the “in” chute. Items that don’t fit are placed by the customer into the “out” chute for return to the micro warehouse. “Suddenly, shoppers were trying on an exponentially higher number of items,” says Shouraboura. “It wasn’t uncommon for my customers to try on thirty items in one visit.”
That facilitated a simple numbers game—the more jeans customers tried on, the more they bought.
For Every Success, Ten Failures
Shouraboura’s automated fitting room experiment at her Hointer store is one of many she’s engaged in since the 2012 launch of her business, and she’s not afraid to admit that more of them fail than succeed. That’s why she’s adamant that a retailer’s “innovation lab” should be a store, not a skunk works operation. “Ninety nine percent of the experiments I try don’t work at all,” she says. “When I hear about retailers experimenting with new ideas in a lab, I often chuckle when we’ve already failed what they’re attempting. I don’t think a lab helps. I think experiments nee to happen in a physical store, where it’s make or break. Everything looks good in a lab. Every midnight idea sounds brilliant there. Then you put it in a store, and more often than not, it doesn’t work.” Shouraboura chalks many failures up to fragility and complexity. Stores, she says, are active environments where kids play, cords get pulled, hardware and software get abused, and associates are not trained to maintain, troubleshoot, and resolve complex technology.
What does work, she says, must be scalable and inexpensive. A fitting room concept that costs $5,000 dollars per installation isn’t feasible for a department store with hundreds or thousands of locations and dozens of fitting rooms in each store.
She also cautions that lots of new technologies look fantastic, but they don’t lift sales. For that reason, she advises extremely careful, and patient, measurement of sales lift. Even with good ideas, she says, you don’t typically see an immediate impact on sales. “With a good idea and proper execution, you will see lift within a couple of months. If I receive positive feedback from customers, and it’s inexpensive and scalable and they love it, I give it some time before I expect sales to increase.”
Interestingly, Shouraboura says the best in-store technology—the stuff that does have a positive impact on sales—is commonly invisible to the consumer. “As strange as it sounds coming from a technologist, people don’t go shopping to play with technology,” she says. “They shop to experience products and interact with associates. In many cases, technology has a negative impact on sales because shoppers spend their time playing with gadgets and displays instead of trying on products. If they’re not trying on products, we’re not selling them.”
Expanding The Concept
Shouraboura’s appetite for disruption isn’t abating. As her original Hointer concept in Seattle continues to thrive, she’s busy applying variations of the model to other segments, including grocery and toys.
In traditional toy stores, Shouraboura’s dissatisfaction lies within store shelves packed with toys that are meant to be interactive, but are zip-tied into clamshell packages that limit children’s interaction with them. “In our toy store experiment, we took all the racks away and created a playground. We allow kids to come in and play, and using the same concept developed for our Hointer denim store, we leverage chutes to introduce new toys to them based on their interests.” Parents can quickly purchase the toys their children choose using their smart phone or a store-supplied “magic wand,” which adds the toy to their order upon touching it When the experience is over, the packaged items in the purchase are automatically delivered from the micro warehouse. “The concept is so popular, the store is constantly busy, even on Monday mornings, because it’s a destination.
Similarly, Shouraboura’s experience working on Amazon Fresh has shaped her vision of the grocery store of the future. “Grocery stores are crammed with shelf real estate that’s expensive from a merchandising and inventory perspective,” says Shouraboura, “but it isn’t necessary for shoppers to touch, feel, and smell a great majority of that inventory.” Consumers want to touch an apple or smell a melon, for instance, but that tactile and sensory experience isn’t necessary to the purchase of a bottle of ketchup. “Shelves upon shelves of identical items require a lot of space, yet add nothing to the consumer experience.” Instead, Shouraboura’s grocery concept, in keeping with the Hointer model, provides a showroom where one bottle of each ketchup variety is on display. Using a smart phone or a magic wand, items are quickly added to the cart and collected from the back room for checkout. “The same customer-held technology can provide suggestions and reminders and other grocery shopping applications,” she says.
Shouraboura’s ideas have garnered attention and funding from several large international retailers, and winning concepts are being licensed to other retailers. “The future of the store is much like we envisioned the future of e-commerce twenty years ago,” she says. “It started slowly, and no one accurately predicted its impact. We’re starting the same way, and we’re confident that the store of the future will look and act very differently than it does today.” Having said that, and despite her passionate commitment to brick-and-mortar retail, she’s still a fan of Amazon. “E-commerce is perfect for products where price, convenience, and selection are the primary sales drivers; product like printer cartridges, with which a shopper has no emotional connection,” she says. “But, when shopping for apparel or jewelry or toys, a photo won’t do I for the consumer because she doesn’t feel anything.” Online, she says speed will continue to be the merchant’s main focus for the next several years. “We had a comfortable 14 day fulfillment window when we started Amazon. Now, two days is a given, and we’re moving rapidly toward a day, or an hour.” The next big opportunity for stores to thrive, says Shouraboura, is experiential, and she’ll continue taking risks and working tirelessly to enable it.