Last week, three of our intrepid Innovation team, Mike Tattersall, Prina Shah and Liam Buswell flew to Las Vegas to attend the Retail Industry’s largest event: ShopTalk Las Vegas. In addition to hosting a roundtable on how retail and consumer brands can leverage artificial intelligence (AI), they met with hundreds of innovative brands and thought leaders and attended a myriad of ShopTalk sessions, MeetUps and fringe events. From the death of omnichannel, waste and cost to the rise of AI in retail, here are their top three takeaways:
#1: Out with Omnichannel, in with Commerce… Everywhere
Retailers are now focussing on meeting the shopper whenever and wherever they are, across the entire shopping journey. This goes against the current omnichannel approach, focussing on industry constructs like channels, and led to a lot of discussions on the store renaissance and its importance, and the emerging role of social commerce.
Michael Fiddelke, Chief Financial Officer of Target, in particular, spoke about the impact drive-up pick-up is having on entire experiences and long-term value, including in-store engagement, not just as a convenience channel, and merging online and offline experiences. For those businesses that do not offer membership or connected commerce opportunities, a challenge remains in how to recognise and provide elements of personalisation to those ‘anonymous’ customers during their in-store experiences; a challenge which several start-ups exhibiting looked to tackle.
With commerce maturity reaching new heights and consumers demanding more excitement than ever before, we noticed that many retailers have begun referring to customers as ‘guests’. This highlights the necessity for good experiences across shopping journeys, and that customers are being valued as ‘members’ of retail brands.
We also saw Chief Digital Officer roles start to transition to Chief Omnichannel Officer Roles… we’re intrigued to see what will come next, and whether these are shifts in title only, or in entire organisational structures too.
#2: The AI Retail Revolution
Artificial intelligence is completely transforming informed decision making, from forecasting, merchandising, long-term investment decisions, and Generative AI - and it was the acronym on everyone’s lips.
But AI is not just a buzzword and merely ‘hype’. The monumental role of AI in addressing current retail and brand pain points is clearly undoubtable, particularly in improving efficiency, enabling commerce everywhere and personalisation at scale.
Whilst in Las Vegas, we co-hosted a leadership breakfast roundtable with Peak AI, which was attended by Tractor Supply Company, Under Armour, Marks and Spencer, Coles Group Australia, and Abercrombie & Fitch. The session was led by award-winning AI experts, and we investigated the current and future state of machine learning and artificial intelligence. We also explored opportunities for retail and consumer brands to leverage Al during the current challenging global economic landscape.
As we’ve written about previously, AI is having a significant impact on the world around us. According to a recent report by Goldman Sachs, as reported by the BBC, AI could replace the equivalent of 300 million full-time jobs. ChatGPT made headlines again late last week when Italy banned the software citing privacy reasons. At True, we believe taking a more proactive and optimistic approach – leveraging AI’s power via customer acquisition, retention, stock management, demand forecasting and supply chain planning – could help your business thrive.
In the public sessions, we enjoyed hearing from Dave Kimbell, CEO of Ulta Beauty, on how they have been staying on top of key trends and innovations at both a product and technology level. We also heard from Samir Desai, Chief Digital and Technology Officer for Abercrombie & Fitch – one of our Innovation partners – on creating and maintaining a culture of excellence. Whilst this may feel disjointed from AI, the underlying message was clear: organisations must adapt and have ongoing mechanisms to be able to recognise and tap into significant technological opportunities given the staggering pace of acceleration.
By keeping a constant finger on the pulse, retailers will create time to experiment and learn. It encourages a culture of innovation and differentiation, rather than waiting until it’s too late, when investment decisions may become harder, and costly technological advancements become ‘meeting’ competitors, not ‘exceeding’ them.
#3: Cost-out, Waste-Out
Unsurprisingly, identifying opportunities to enable cost-savings was a key theme. From using supply chain as a strategic growth driver - leveraging learnings from the recent global supply chain issues - through to reducing customer returns (totalling $816Bn during 2022), improving in-store associate productivity, and how to drive higher ROIs from tech decisions.
Several C-suite leaders spoke about the bottom line ultimately having precedence right now, and there being a higher bar for investment-making decisions - including within investing in tech. This is an interesting tension with Key Takeaway #2 above, where some organisations are wanting to still maintain a culture of innovation, experimentation, and excellence, but in a frugal way. This extended to considerations around Retail Media spend and technologies to equip businesses to make the most cost-effective decisions.
The role of sustainability initiatives to minimise waste and encourage circular behaviours was a key point in Chip Bergh, CEO of Levi Strauss & Co’s talk. This is an element that we are taking to heart here at True and have been witnessing during our recent Retail Safari’s, with more Levi stores offering the Tailor Shop (repair services, alterations, creative reimagination) in a focal position. However, from a start-up perspective, the number of ESG focussed businesses exhibiting in the main hall felt considerably small, and ESG had less prominence across the agenda despite its underlying importance for the next decade. We will be interested to see if this will be at the same at ShopTalk Europe where our MD, Innovation & CCO, Mike Tattersall will be moderating a panel on ‘New Grocery Technologies Worth the Hype’ alongside Bruno Mourão, Head of IT Transformation and IT Strategy & Experimentation, Sonae MC and Oli Baggaley, Director Digital Strategy & e-Commerce, Ahold Delhaize.
Our overarching takeaway was that whilst the pandemic significantly accelerated retailers’ advancements in digitally transforming their online businesses out of necessity, we are very much in the midst of a mass re-imagination and invigoration of in-store experiences, that are digitally - and most importantly - customer and guest led.