NEW NORMAL The RECAP OF 2018 SHOPTALK - The Robin Report
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RECAP OF 2018 SHOPTALK
The
NEW NORMAL
where
NOTHING
IS NORMAL
ROBINREPORT THE NEW NORMAL WHERE NOTHING IS NORMAL | RECAP OF 2018 SHOPTALK
THE RECENT EVOLUTION According to Anil and Zia, the New
Normal will last much longer than
the two years of the Disruptive
impact.” The tipping
points, according
to Anil, occurred at
FROM THE TEAM THAT CREATED
ANNOUNCING:
OF RETAIL By Robin Lewis
Period. It’s here to stay for the
foreseeable future, forming our
new reality. And that’s great news
different times for the
two industries because
they each had a CT
28-31, 2018
O
for Shoptalk because it makes the different genesis—the
event even more relevant—to a Great Recession for
Just like the dramatic changes in
AS
Zia Daniiell Wigder, Chief Global Content greater number of people and for financial services and
EG
the rest of retail, the industry’s Officer, Anil Aggarwal, Founder, Chairman a greater degree of change. changes in consumer
V
S
& CEO and Simran Rekhi Aggarwal, A RIA, LA
“events calendar” has been forever behavior for retail.
Founder & President at Shoptalk
altered as Shoptalk completed its Predicting Change
third Las Vegas event in March.
In the Fall of 2015, Anil predicted What it all
THE NEW EVENT FOR CPG BRANDS &
Means
RETAILERS
& BRANDS
Over the past three years, that the stars were aligned for
Apply for
FREE
GROCERY, DRUG, CONVENIENCE, TICKETS
& TRAVEL
Shoptalk’s founder and CEO, Anil retail to move into the Disruptive Reality squares with DISCOUNT AND OTHER STORES
Period and that it would be
TICKET
Aggarwal, has built the event into Anil’s thesis as does
nothing short of a movement— followed by the New Normal. Very common sense, which
OCTOBER 28-31, 2018 ARIA, LAS VEGAS
one that’s played a critical role few others saw these changes educational content most needed
tells us that there are always
in helping lead the retail industry coming and even fewer in tradi- at each point of the evolution the
two stages in the disruption of
through its recent years of upheaval. tional retail planned for them. industry, closely tracking how the
anything: the disruption itself
In the process, the former tech CEO old and new worlds are evolving in
and then adjustment or change
and Google executive (and current How did Anil know? Where did real time and identifying the issues,
to the existing order, eliminating
partner in a billion-dollar investment he obtain the crystal ball? Before opportunities and challenges
some and elevating others. All
firm) has become known for his jumping head first into retail, that should be addressed as key
industries are facing the same
commitment to building a platform Anil was a successful consumer learning points.
‘New Normal’ which is distinct from trifecta dynamics: new forms of
payments and financial services
that empowers the retail industry "Simply put, disruptive the ‘Legacy Normal” of 2015 and competition, new consumer and
industry CEO. According to Anil,
with education.
innovation is now the
earlier.
retail is transforming in a parallel
enterprise technology waves and Groceryshop
new consumer cultures. And as So, what’s the new event,
The Robin Report attended the “In the ‘Disruptive Period’ that’s way to consumer payments
normal—everyone is each industry’s turn comes, the Groceryshop, all about I asked
latest Shoptalk event in force, and now behind us by more than and financial services, with one
doing it.” - Anil Aggarwal leaders feel the rumblings and Anil and Zia.
it was nothing short of epic. From five months, people were largely key difference—retail lags by
know major change is coming, but
its enviable lineup of executive-level blindsided when the technologies about four years. The disruption
they just don’t know how fast and “Groceryshop focuses on the
speakers and thousands of curated and trends that define the digital of payments, banking and all
powerful it will be in forcing them changes in the grocery and CPG
on-site meetings to the incredible age reached their tipping point. It financial services—generally
industries—grocery is the largest
scale with close to 8,500 attendees, The State of Retail’s felt like everything was happening referred to as “fintech”—started in
to make fundamental, as opposed
to incremental, changes to their category in retail yet is still in
Shoptalk has established an Evolution to them in 2016 and 2017, and 2012, compared to retail’s trans-
businesses. the very early stages of digital
entirely new scale and standard of that made them uncomfortable formation which began in 2016.
“At the beginning of this year, disruption. We see enormous
conferences in the retail industry. and largely reactive,” he says. “In “The factors driving the change What I observed at this year’s
literally on January 1, 2018, the opportunities in this sector that
today’s New Normal, things have are the same—the digitization Shoptalk—and each before this
With Shoptalk already preparing retail industry entered a ‘New are distinct from the evolution
settled down and people have of industries as everything from one—was that it’s the only event
for its 2019 edition, I met with Normal’ premised not on fear of of the rest of retail,“ Zia told me.
become comfortable with the mobile and generational shifts in sync with the realities of the
Anil at his midtown Manhattan the present, but on hope for the Not wanting to let the grass grow
uncomfortable, allowing them reach their greatest relevance and industry. Shoptalk creates the
office to discuss the leadership he future,” Anil told me when we met, under their feet as they prepare
to be continuously proactive
brings to retail. We were joined echoing his opening remarks at for Shoptalk 2019, Anil and Zia
instead of intermittently reactive.
by Zia Daniell Wigder, who by the Shoptalk. “That’s a world apart launched Groceryshop within two
This change in mindset is the
way, is also a major reason for from the 24-month ‘Disruptive weeks of Shoptalk and are holding
most powerful driving force for In the Fall of 2015, Anil predicted that the stars were
Shoptalk’s success. Among a wide Period’ of 2016 and 2017.” the new event this Fall on October
transformation over the coming
range of topics, we discussed the aligned for retail to move into the Disruptive Period and 28-31, at the Aria where they
According to Anil, even with the years, and it will result in change
Shoptalk view of the state of retail first launched Shoptalk in 2016.
changes we’ve already experi- that scales to every consumer use that it would be followed by the New Normal. Very few
and what’s in store for the future, You can read more about that at
enced, the greatest transformation case of the digital age. Simply put,
including the new event launched others saw these changes coming and even fewer in www.groceryshop.com.
of retail didn’t happen during the disruptive innovation is now the
by Anil and Zia called Groceryshop, normal—everyone is doing it.”
Disruptive Period. Instead, he says, traditional retail planned for them.
which is focused on innovation
it’s happening right now—during
specific to grocery and CPG, and
a subsequent time he calls the
will be held in October, 2018.
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ROBINREPORT THE NEW NORMAL WHERE NOTHING IS NORMAL | RECAP OF 2018 SHOPTALK
offered faster delivery options. However, the industry Labs and Corrigon. All of these acquisitions helped
changes were far more profound when they retailers gain access to new technologies, business
collectively reached the tipping point than most models and talent.
retailers realized or could address through their limited
’s
initiatives, especially given the crippling debt that •R
etailers also began to select and implement
plagued many retailers after private equity buyouts. better technologies and processes. Rife with legacy
Two years of Disruptive Change therefore brought to systems, retailers also began to take advantage of
Framework for Retail
light the out-of-date nature of retail offerings. advances in retail technology. Throughout 2016 and
2017, retailers addressed a wide range of technology
shortcomings in order to emerge from the chaos
The Period of Disruptive Change intact. For example, many felt the sting of outdated
Lit a Fire Under Retailers merchandising practices and technologies. Poor
By Anil Aggarwal and inventory planning had resulted in subpar in-store
Zia Daniell Wigder During the period of Disruptive Change, outdated experiences and reduced foot traffic: shoppers left
From the outset, we expected
industry practices and legacy methods of operating frustrated when retailers were unable to keep popular
the industry to evolve through were first exposed as unsustainable and started to be merchandise in stock, while at the same time, retailers
the following three major stages: Our thesis, which was published by Deborah Weinswig addressed. The result was a seismic shift in traditional were saddled with excess unwanted inventory. During
last June in Fung Global Retail & Technology, was retailers’ business models, a series of groundbreaking the period of Disruptive Change, retailers began to
modeled on a similar progression that started four acquisitions of venture capital-backed tech and tackle core issues like stockouts and shortages, and
From a Legacy Normal that years earlier in the disruption of consumer payments direct-to-consumer startups, and dramatically invested to better leverage inventory across channels.
dominated retail for decades, and banking—a sector now widely referred to as increased exploration and implementation of new Retailers also adopted more advanced approaches to
2015 where short-term wins were fintech that we helped lead from the beginning with trends and technologies. Both the US and Europe customer insights, enabling them to understand and
& BEFORE prioritized over longer-term the creation of an event similar to Shoptalk. experienced Disruptive Change, with large retailers in link online and offline shopper behavior. And retailers
investments and innovation some parts of Europe still working through this phase. that had been operating their e-commerce sites on
was mostly incremental. clunky platforms continued to implement newer,
Consumers and Competition Changed Change within established retailers and brands during
more flexible and cost-efficient options that enabled
Faster than Retailers, Sending the Industry this time was important, but also largely reactive
them to react quickly to customer needs.
Through a period of into a Period of Disruptive Change and corrective of previous shortcomings. Innovators
Disruptive Change caused who championed new ways of doing things were
The retail industry’s Legacy Normal stage ended in the exception within their organizations, and initially
by the convergence of
2015 disorienting shifts in consumer
2015, kicking off a period of Disruptive Change that
encompassed all of 2016 and 2017. It was during this
faced internal and industry resistance based on deeply
entrenched thinking and practices. We referred to
During the period of Disruptive
TO behavior, technology and period that retailers began to realize they had not Change, outdated industry practices
2017 competition. This stage saw the sufficiently prepared for the sea change in consumer
these innovators as "Heretics" at Shoptalk in 2017.
and legacy methods of operating
correction of previous missteps behavior, preferences and expectations—especially More specifically, during this period of Disruptive
and initial implementation of when it came to younger generations. The Legacy Change: were first exposed as unsustainable
disruptive innovation. Normal years leading up to the time of Disruptive and started to be addressed.
Change had seen (1) the meteoric adoption of mobile •R
etailers questioned their own legacy business
by shoppers around the globe, (2) the rise of social models and started to address shortcomings.
To a sustained New Normal media and interest in shareable experiences, (3) the Retailers first tackled these challenges themselves.
where a mass of the industry continued migration of young, educated consumers For example, many addressed excessive growth In the New Normal, Innovation is
2018 embraces continuous disruptive to urban areas, and (4) the growing preference for in store counts through aggressive downsizing of No Longer Reactive, It’s Proactive
& BEYOND innovation to satisfy changing socially conscious, healthier and more transparent physical retail locations. Others launched new, smaller
customer expectations in a store formats to appeal to different types of shoppers A combination of factors led to a strong 2017 holiday
products and a focus on wellness. Additionally, with
digital age. and to reach consumers in dense urban areas, while sales season, including a robust US economy, an
Amazon revenues increasing and Prime memberships
optimal set of shopping days between Thanksgiving
8 rising rapidly, culminating in an estimated 80 million
households in 2017, not only had it become evident to
some used bankruptcy proceedings to help manage
their reorganizations. Retailers embraced what and Christmas, continued growth in e-commerce and
D came to be known as “experiential retail”, adding improved last-minute delivery and pickup options
We also anticipated that the sentiment the industry that shoppers were gravitating to Amazon,
enhanced offerings like classes, social gatherings, before the holidays. As we enter 2018, this has given
in retail would shift from a state of but the majority of US households had also gained
cafes and restaurants to their stores. Some of the the retail industry some much needed breathing room
comfortable during the Legacy Normal access to two-day e-commerce delivery.
most ambitious looked outside their organizations to work through its ongoing systemic challenges as
to uncomfortable in the period of well as embrace new solutions.
Retailers and brands were in no way oblivious to these for innovation, acquiring fast-growing startups such
Disruptive Change, and then to a state
trends: they’d built mobile sites and apps, established as Jet.com, Dollar Shave Club, Chewy, Shipt and
of comfortable with the uncomfortable The resulting optimism and confidence has allowed
social media strategies, started to remove harmful TaskRabbit as well as numerous smaller startups with
during the New Normal. the industry to now move to its New Normal stage, the
or undesirable ingredients from their products and specific technology solutions like Outward, Body
timing of which was previously the subject of much
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ROBINREPORT THE NEW NORMAL WHERE NOTHING IS NORMAL | RECAP OF 2018 SHOPTALK
The New Normal Will Require Constant •T
here will be a far closer alignment of startups and shakeout during the period of Disruptive Change,
Improvement in Operations, Experiences, traditional businesses. Large retailers and brands change during the New Normal will continue to create
Products and Business Models will not revert to the previous vacuum largely devoid a divide between the winners and the losers. Long-
of influence from early-stage companies. While term success will be dictated not just by the nature of
The New Normal is an extended period during which retailer and brand accelerators and incubators gained a retailer’s business or the strategy and technology
innovation is no longer an “if” or “why” but “who, what, momentum in 2016-2017, the New Normal will include adopted, but also by the willingness to embrace
when and how,” in order to meet and exceed the needs partnerships between large organizations and start- constant change and a culture of iteration in every
of customers as they discover, shop and buy physical ups that go well beyond these types of programs. As aspect of the business. During this period, retailers
goods differently in a digital era. Retailers will be in a retailers look to differentiate their product offerings, are also less likely to be punished for investing in the
state of constant improvement as they look to ensure they will turn to direct-to-consumer startups with future, with early indications suggesting that investors
everything from the supply chain to the online and new, revolutionary products as key suppliers. New in larger retailers, including publicly traded companies,
in-store experience is optimized: business models rolled out by large retailers will may be willing to forego short-term profits in favor of
be powered by startup long-term gains.
•B
ackend technology improvements will create new partners. And as retailers
efficiencies—and expectations. During the New move beyond talking about The primary defining
Normal, advances in backend technologies will have a omnichannel and instead The Shoptalk-Led Narrative
profound impact on the retail experience. Shortened focus on determining the characteristic of this New and Community is Now
supply chains will mean faster access to cutting-edge Relevant to the Many,
most optimal balance of Normal is that disruptive
fashion and design. Automated warehouses digital and physical offerings Not Just the Few
combined with new pickup and delivery options in their businesses, startups innovation is no longer
speculation within Shoptalk. The period of Disruptive will reduce fulfillment times, changing consumers’ If the current relative stabilization
Change transformed the retail industry much more, definition of immediacy. The returns process will be
will play a critical role in simply reactive or of retail is sustained, the New
delivering the capabilities
but was somewhat shorter than we experienced in simplified, making it far less painful for retailers and that will enable new shop- something that a minority Normal is here to stay—although
consumer payments and banking (24 months for retail consumers alike. Artificial intelligence and machine like all major economic shifts, it’s
versus 36 months for fintech). learning will be deployed across the entire supply
ping experiences. of people advocate. impossible to know for certain
chain, optimizing the most inefficient parts of retail. •A
wide range of new con- that it’s a ongoing trend rather
The primary defining characteristic of this New Normal These changes will happen globally, with countries sumer products will cross than a short-term anomaly until
is that disruptive innovation is no longer simply reactive like China already well ahead of the US and Europe the chasm. Finally, the New Normal has also ushered it’s proven through time. The
or something that a minority of people advocate. when it comes to logistics and fulfillment innovation. in an era where mainstream consumers are seeking role and importance of Shoptalk is at its height during
Instead, it is proactively embraced by the mainstream out smaller brands with unique propositions and the New Normal: The New Normal is the time when
and a key priority throughout the ranks of retailers and •S
hoppers will quickly come to expect many of benefits. In past years, startup brands were typically most—not just few—in the industry must educate and
brands, increasingly constituting part of the everyday the experiences that are cutting edge today. The supported by a small group of early adopters—today, inform themselves about retail and e-commerce trends
work for a critical mass of the organization. Today, backend technology shifts that will take place in the new brands can rocket into the mainstream in months and technologies that are fundamentally altering their
we refer to these individuals as "Catalysts" instead of New Normal will be complemented by the adoption or years rather than decades. This New Normal businesses.
‘Heretics’ as we did in 2017. Culturally, this New Normal of new technologies that will directly impact the means greater competition for established brands
brings in a new era where innovation, not protection customer experience. With greater deployment By focusing relentlessly on the need for a fresh,
that must now be nimble enough to compete against
of the status quo, is reflected in company’s hiring and of AI, for example, search results and customer intellectually honest conversation and community,
these new rivals—it also means consumers will have
training of new leaders and broader staffing. This is service responses will increasingly be generated Shoptalk has established an entirely new standard for
more choice than ever as they make purchase deci-
not an issue of breaking down internal “silos”—it is through natural language text and voice, and will events in retail and e-commerce. We maintain complete
sions. Large brands and retailers will need to speed
about empowering individuals and teams to be nearly flawlessly match the intent and preferences control over our agenda because it forms the basis of
up new product development processes while also
agents of change. of the shopper; visual search will be widespread. the industry’s narrative, and we have never outsourced
ensuring they cater to shoppers growing accustomed
Consumers will expect personalized experiences both content development or engaged in unhealthy practices
to seemingly infinite choice.
Additionally, the New Normal heralds in a new era of online and offline, while serendipitous discovery will such as pay-to-play content. We have reconstituted
realism where hyperbolic terms like apocalypse and become more common as retailers and brands better the industry’s digital community from scratch: with
Armageddon are no longer used in describing the predict which products and experiences will delight The Divide Between Winners and no legacy stakeholders, we ensure we bring together
future of retail. And while pundits grabbed attention each individual shopper. Technologies that enable Losers Will Increase everyone that forms the relevant ecosystem—including
over the past two years by questioning whether retail shoppers to visualize products on their faces and startups, investors, equity analysts, media and more—
stores and shopping centers even had a future, the bodies, and in their homes and gardens, will become The New Normal will last much longer than the period many of whom did not previously have such a home. We
demise of physical retail was never a possible outcome the norm in categories like beauty, apparel, furniture, of Disruptive Change and result in an overall greater have also evolved the event sponsorship model to focus
of the turmoil. home improvement and more. evolution of the industry—more transformation will more on curated interactions that can help retailers and
happen because this stage is premised on hope for brands with the changes they now must make.
the future rather than fear of the present. Like the
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ROBINREPORT THE NEW NORMAL WHERE NOTHING IS NORMAL | RECAP OF 2018 SHOPTALK
WHAT’S SHAPING THE By Marie Driscoll, You can launch a brand and stimulate
RETAIL REFORMATION
Deborah Patton
Judith Russell and
action in one transaction today.
Warren Shoulberg That is what customers demand.
Every industry needs a visionary or clairvoyant. These voices tend to make us uncomfortable
and slightly confused. Do we have the right strategy? Are we shaping our future or just trying
to catch up to it? We at The Robin Report believe these voices are critical to keep us honest
and challenge us to raise the bar of the entire industry. So, using Anil’s thesis as a stepping into the brand, Aerie posts photos for retail, for Ulta Beauty, for shoes are not only capturing the
of them on the Aerie homepage. our guests, for our associates. hearts and souls of ardent nextgen
stone, we have assessed the industry and identified six macro trends that are informing More people have the ability to conservationists, they are role
and framing the future of retail. While these trends were pervasive at Shoptalk, they also The brand is evolving and becom- be accepted for who they are, models for “going green” through-
ing part of its customers’ lives, they and beauty will play a critical out all levels of their organization.
transcend the conference and are bellwethers for the industry at large are the role models and they live role in that.” Online hair colorist Madison Reed
the brand, a cultural phenomenon founder Amy Errett speaks about
rallying around the simple filter of There is a movement afoot that the freedom to be “…authentically
Be Real! Today, real women are the transcends the only-me market. you, finding your voice, that you
brand ambassadors, embracing Consumers are calling the social
1| Power to the People Building a legitimate community celebrate authenticity unless you,
individuality and style for the justice shots and demanding that
are perfect just as you are. That’s
for customers is non-negotiable. your people and your headquarters empowerment and how your hair
Key Words: Expectations, Ethics, Adam Sussman, Chief Digital Offi- do.” Aerie Real is a new initiative plus-size woman to celebrate body retailers and brands put their looks is directly correlated with
Sustainability, Conscious Capi- cer at Nike says, “A finish line can (started in 2014), and according positivity. Since Jennifer’s team products where good ethics are. confidence.” Madison Reed has cut
talism, Authentic, Transparent, inspire for a moment, a community to Jennifer, the entire organization began its customer engagement Culturally we hit a tipping point out harsh chemicals in an ammo-
Trust, Personalization, Community, can inspire for a lifetime.” Nike has is walking the talk, mere everyday strategy, sales have doubled to when Barron’s published Blackrock nia-free ingredient mix as part of
3Cs-Culture/Conscious/Cause; been creating communities on the marketing is meaningless. Jen- $500 million, with digital growing CEO Laurence Fink’s annual letter its purpose-driven strategy.
Brand Building track/football/sports field since its nifer’s mandate is that an Aerie exponentially to 40 percent of total to CEOs stating, “Without a sense
brand sales. of purpose, no company, either
founding and with technology, can product must feel good. “If she
public or private can achieve its
2| T3: Tech, Touch
The consumer is the brand. Each make the sneakerhead kid in Des doesn’t feel good, how is she going
is one of a kind, a unique product, Moines feel as lucky as his peer in to feel real? You can’t just post
Authenticity and transparency are full potential. It will ultimately lose and Talk
personalized and customized, table stakes. And forget traditional the license to operate from key
New York City. photos on Instagram and expect Keywords: Machine Learning,
made affordable because of advertising or marketing. This con- stakeholders.” He called for a new
your customers to engage. You Personalization, Touch/Voice/
technology. Carolyn Everson, VP, Listening is both art and science. sumer shift is supported by Tomer model of corporate governance,
can’t. You have to live with your Visual Search, In-Store Experience,
Global Marketing Solutions at Jennifer Foyle, Global Brand Tagrin of Israel-based e-commerce where companies ask themselves:
customers.” To bring customers Geo Fencing, Storytelling,
Facebook says there are three President of Aerie AI technology provider Yotpo: “No What role do we play in the
one believes you. They believe Entertainment, Games,
most-important things: “First: put at American Eagle community? How are we managing
what customers say about you.” AR, Robotics
the customer in the center. If a explains “You can’t our impact on the environment?
company has e-commerce and create a brand Carolyn Everson of Facebook adds, Are we working to create a diverse “Four years ago, I asked myself,
stores in separate silos (without unless you listen “Digital native companies build workforce? Are we adapting to ‘How is it that in 2014, I can see
seamlessly integrating them), then to your customers; brands that consumers love and technological change? Are we something I like and not be able
they’re making it about them, not and just as import- will talk about for decades. It’s providing the retraining and op- to tap on it and get it?’ Millennials
the consumer. Then mobile second. ant, everyone, from more about reaching the consumer portunities that our employees and and GenZ get hundreds of images
Mobile is the single biggest trans- sales associates to than building the brand.” Tina our business will need to adjust to on their mobile devices each day.
formation in behavior. Third: Make headquarters, must Sharkey, Co-founder and CEO an increasingly automated world? For them, it’s a natural instinct to
your culture be about Test/Learn/ be committed to a of Brandless, agrees, “Today, it’s Are we using behavioral finance want to act on those images. It’s
Iterate/Scale—do this faster and customer-centric absolutely no longer what a brand and other tools to prepare workers intuitive. So, we built a business
faster.” She adds that the purchase strategy. You must says about itself, it’s what a friend for retirement, so that they invest about doing that, so you can shop
funnel, or the model that illustrates have your whole tells a friend.” in a way that will help them achieve the world you see.” That’s Lihi Pinto
the theoretical customer journey organization their goals?” Fryman, founder of Israel-based
Honesty is even shifting the beauty
toward purchase, is out the door. wrapped around visual search technology firm Syte.
business, traditionally built on Allbirds may be the brass ring
You can launch a brand and the idea; it’s not Ai on the possibilities of visual
fantasy and aspiration. Mary Dillon, winner when it comes to sustain-
stimulate action in one transaction easy. You can’t search. Ben Silbermann, Co-found-
CEO of Ulta Beauty says, “We are ability. Their fashionable eco-smart
today. That is what customers expect these new er and CEO of Pinterest adds,
in a time of exciting possibilities,
demand. generations to
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ROBINREPORT THE NEW NORMAL WHERE NOTHING IS NORMAL | RECAP OF 2018 SHOPTALK
shoppers worldwide prefer physical 22 showrooms today,
only north with Echo Tech tricks and toys are tools to spaces for shopping. Walmart is they will have 35 by the
ownership growth and exalt the customer experience. Nike taking the lead among traditional end of the year. Drew
expansion of product partnered with Singapore-based retailers, as Marc Lore summed it Green, CEO of the Van-
availability. BBH to build the world’s first LED up with, “some of the great deals couver, Canada-based
track, where runners wearing in-store just don’t translate online.” menswear company,
Machine learning is also sensors can compete against an He spoke to Walmart’s ability said that this doesn’t
redefining every aspect avatar version of themselves. Adam to leverage its store fleet with mean they’re becoming
of commerce. Chatbots, Sussman, Chief Digital Officer of 1,200 pickup locations and a traditional retailer. It’s
love them or hate them, Nike says, “Technology is enabling expanding U.S. grocery delivery still got a digital voice,
are personal shopping the company to continue to service to 100 metro markets by inspiring a generation
assistants powered by achieve and scale the vision that 2018 year-end that will reach of men to evolve from
AI. What humans do its founder had.” Each day, through 40+ percent of U.S. households. RTW to MTM (made to
naturally is seamlessly its stores, apps and websites, measure) and technol-
transition from audio Nike connects with hundreds of Physical synergy with online is the ogy has played a huge
modality to visual millions of athletes in more than new reality. John Bejorik of WD but those environments are rapidly
role. They have reduced
modality and back 190 countries across six continents. Partners said, “When a store opens evolving to interesting new for-
the cost of customer acquisition
again. Not so for AI. To Nike’s customers aren’t buying in a neighborhood, the online sales mats. Nomadic retail is True&Co.’s
from $140 to $78 and have cut
“Years ago the mall was the place train AI to switch and footwear, they’re buying into their increase in that area by 52 percent mobile unit, ‘try on truck.’ Toyota
lead time in half. Now 82 percent
to shop, the place to be, the place understand visual clues is much own potential, adds Sussman. on average.” On the flip side, after is developing an autonomous
of orders ship in under two weeks.
to discover everything that was faster than text. Users want to talk seven years, online brand Indo- retail vehicle that can be a store
The results: its fourth consecutive
new. The element of visual discov- in emojis. AI needs multi-modality DSW is testing a new one-shoe- chino started to open showrooms that comes to you, a curbside
year of 50 percent year-over-year
ery is not yet sufficiently integrated understanding all at once, and stop lab store in Polaris, Ohio, with because they knew if they wanted mall in collaboration with Uber
revenue growth.
into the online world. Visual search move back and forth artfully, send new technologies: a handheld to to be a market leader in the and Amazon. Showroom models
and discovery will give people a a photo, respond in voice. AI is, navigate the store, a place to rent $7 billion men’s tailored clothing New physical retail formats are include The Apartment, Media-
better language for exploration not surprisingly, the darling of the shoes, a service to be fitted with space, they had to scale faster trending, according to Anthony Si- Markt, Bonobos and Indochino.
and discovery. This will also help startup crew. orthotics, an area to get a pedicure and reach the consumer segments mon, Managing Director of Retail at Hospitality retail is embodied the
transcend language barriers.” and have shoes repaired. Inscape who needed more service for their design firm Interior Architects. “We Shinola Hotel in Detroit, in West
Ben Silbermann of Pinterest refers is a meditation center launched by introduction to the concept. With are living in an increasingly digital Elm Hotel, Muji Hotel in Tokyo and
Universal Design theory is to AI, robot logistics and VR, “all Intermix founder Khajak Keledjian.. world that craves John Lewis hospitality suite. These
based on the concept that if you this was science fiction a few years Lululemon, not to be outdone, is analog sensation. are branded retailers where you
design buildings, products and ago, and now it’s happening, it’s testing a health and home line, with So be relevant to can sleep overnight.” Sleepovers
environments for people who are powering the future of retail.” Neil meditation space in the store. your consumers’ are trending. There are innovations
older or with disabilities, you have Ackerman, Senior Director, Global
lives, be truthful such as Casper pop-ups where
solved design problems for the Supply Chain Advanced Planning, Tech is not just bells and whistles,
to your brand, and you can go for a 30-minute nap;
population at large. Conversational Johnson & Johnson, enthuses, it can support critical infrastructure
hold experiences the Dyson demo store, and Xbox
commerce is a voice-activation “Artificial Intelligence isn’t artificial. issues. An interesting case is Philips
important to what Stay and Play, a pop-up in Australia
shopping solution for everyone. It’s real.” Be that as it may, we are Lighting, which is using LED lighting
lies ahead in the where you can spend the night on
Larry Bohn, Managing Director of at the tip of the iceberg when in stores as an indoor positioning
new retail environ- a couch playing Xbox.
General Catalyst says, “In 2010 no we consider its potential. “AI is system to get more accurate inven-
ment.” He explains,
one anticipated how fast mobile the buzziest buzzword right now. tory and prevent loss, which makes Many physical retailers are
“85 percent of
shopping would ramp, it’s the same But it’s a broad term for a lot of the physical store as data-rich as re-introducing food service into
consumers need
for voice.” Peter Cahill, founder and things, and still very nascent,” says the online store. their stores. The interaction of
the physical
CEO of Voysis says, “Voice removes Brendan Witcher, Principal Analyst retail food is important because it
environment of
huge friction in e-commerce, at Forrester. The engineers tend to 3| High Touch … Still brick and mortar, attracts more traffic, encourages
enabling shoppers to say what be more grounded, saying artificial guests to stay longer, makes it
they want. The constraint is what intelligence isn’t intelligence. Key Concept: The Brick-and- more about experience and less
is available in the format, not It’s machine learning. And even Mortar Advantage about the transaction. Urban
what customers are looking for!” more pragmatic, “AI, and data The human engagement is central to any Outfitters acquired Pizzeria Vetri
According to Cahill, the average analytics— it’s just math. Let’s Diane Hoskins, co-CEO at Gensler,
the world’s largest architecture
brick-and-mortar experience, which has to enhance the experience in
Amazon Echo owner spends $500 just call it math,” states Charlie their lifestyle stores. Restoration
more than the average Amazon Cole, Chief E-commerce Officer, and design firm, said 52 percent to be social and community-like, to attract
Hardware has already added cafes
Prime member. The trajectory is Samsonite. of shoppers still prefer brick and the new young consumer culture. and restaurants into its stores and
mortar, and 77 percent of Gen Z
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ROBINREPORT THE NEW NORMAL WHERE NOTHING IS NORMAL | RECAP OF 2018 SHOPTALK
has announced more to come. consumers don’t have a problem the Amazon invasion and their
As one of the last consumer product goods
And Tommy Bahama has its own with others picking out their prepared foods business being
branded bar and grill. food. In fact, an Oliver Wyman bombarded by the likes of Uber retailing channels to feel the full impact of the
study found that 66 percent of Eats, DoorDash, GrubHub and e-commerce onslaught, they have been behind
Finally, and the most significant U.S. consumers want to shop for their brethren—not to mention the the curve, both in feeling the e-pain and in
advantage in the physical world, groceries online, but are prevented burgeoning meal kit purveyors —su-
are the old world “sales assistants,” addressing how to adapt their business models
due to the following: permarkets see fresh food as their
trained and elevated to what we last best hope to remain relevant to the new realities of retailing.
would describe as “brand ambas- • Service isn’t good enough to the online shopper. Competition
sadors.” The human engagement for dinner, and for the fresh food
• Too much hassle/friction
is central to any brick-and-mortar delivered quickly in the last mile,
experience, which has to be social • Product assortment isn’t big
will get fierce.
and community-like to attract the enough
new young consumer culture. • Prices are too high Whether it’s produce, meats, baked The poster child for the new model a base of about
goods or dairy, stores are trying to for grocery could indeed be Ocado. 50,000 SKUs. Half
• Delivery fees are too high
4| Grocery in the shake off the traditional slow pace UK-based Ocado is the largest its business is in
usually monitored and adminis-
online grocery retailer in the world,
Faster Lane • Food isn’t fresh enough of change in the channel. According
at $2 billion, bigger than Asda,
fresh foods. And the company is
tered through smartphones.
to Cooper Smith, Research Director profitable, Steiner said, adding that
Key concept: The laggard food Because everyone buys groceries of L2 Inc. (Gartner) “The tipping Sainsbury, and Waitrose. Ocado if U.S. retailers adhered to Ocado’s •T
he possible resurgence of QR
industry is trying to catch up every week, and everyone has a point that identifies true disruption seems to have found the secret business model, they too would be codes on products, driven by
smart phone, eventually these in any consumer goods category is sauce to make the model work. successful…and profitable. their huge popularity in the
Supermarkets are fighting to avoid barriers will be broken. The conve- when 20 percent of those products Tim Steiner, the founder and CEO,
Chinese marketplace. Other smart
superficiality. If you looked closely nience of getting product quickly are sold online. It started with said during his keynote at Shoptalk The closest American operation
label configurations will also gain
enough during Shoptalk you could and economically, delivered to your books, then moved to tech and now that because of the company’s to the Ocado model would be
in importance, giving shoppers
almost see the legacy supermarket kitchen, will win out in the end. apparel. It will take until 2025 when success, the online grocery busi- FreshDirect. Jason Ackerman,
the capability to find out more
brands circling their shopping 20 percent of grocery is sold online. ness represents 7 to 8 percent of CEO and co-founder, also a
information on the products they
carts around their territories. As People all over the world are It’s already happening in Korea the UK market versus an estimated keynote speaker at Shoptalk,
are considering purchasing.
one of the last consumer product uncomfortable about others at 20 percent.” Nielsen Group VP, 2 to 3 percent in the U.S. “And it said the company is doing about
goods retailing channels to feel picking out stuff for them. As these Retail Commercial Strategy Laurie will be at 10 percent, $100 billion, $700 million in the greater New •P
otential increases in online
the full impact of the e-commerce changes, the shift will accelerate. Rains added, “The tipping point is in four to six years,” he said. Ocado York market area, all from one sales of wine as local shipping
onslaught, they have been behind Migration to online is inevitable 20 percent and maturation is 70 is well on its way, with 1.3 billion distribution center. Calling grocery laws evolve, allowing for more
the curve, both in feeling the e-pain because it saves time, money percent. It can take 15 years to get pounds ($1.8 billion) in revenue “a defensive industry,” he says, intra-state deliveries and service.
and in addressing how to adapt and enhances food quality and to maturation.” But startups are last year and 580,000 active “fresh food is sexy,” indicating that
their business models to the new freshness. always in a hurry, and they want to customers. fresh is the differentiating factor •C
onflicting forecasts for brands,
realities of retailing. Grocery is move that grocery horizon up to to the company’s model. one speaker citing research that
With Center Aisle departments Three large automated warehous- says millennials are surprisingly
struggling to find the holy grail of five to seven years from now.
melting down in the face of es, with 600 battery-powered Several themes emerged at loyal to brands their parents
the grocery category: fast, efficient
robots that move at four meters Shoptalk as elements for successful used while another—from the
and cost-effective
per second, allow the shipping of strategies in the grocery business: Brandless startup—claiming
home delivery of
online orders of fresh an average of 1.3 million items per brands are no longer relevant
•T
hree key traits will define all
food. day. There is heavy use of machine when compared to price and ease
successful commerce going
learning in the supply chain with of purchasing.
forward: convenience, personaliza-
We are becoming 99 percent item accuracy in
tion and goodness. • Through it all, business leaders
a nation of foodies, shipping, resulting in very low
with a younger levels of food waste. remained fearless in their ability
•T
he increased use of AI in
generation creating a to be competitive with the hulking
customer service: one Shoptalk
big food culture. Men Without physical stores, the giant invading their businesses.
speaker forecast that 80% of
are just as interested company depends on massive Said one, when confronting the
customer interactions will be
as women, doubling distribution centers that serve possibility of a certain online
handled by artificial intelligence
the engagement more concentrated population juggernaut opening 10,000
machines by 2020.
potential. There is centers, charging about $2 for physical stores: “To our friends at
tremendous latent most deliveries. The centralized •L
oyalty programs, stressing Amazon, we say bring it on.”
demand, and younger warehouse allows for 99 percent rewards for frequent shoppers,
accuracy of orders, he said, with
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ROBINREPORT THE NEW NORMAL WHERE NOTHING IS NORMAL | RECAP OF 2018 SHOPTALK
THE NEWEST KIDS
being squished by giant Disney, Sphero becomes part
of the Disney Accelerator Program. The concept is to
fuse physical robotic toys, digital apps, and entertain-
ment experiences to unlock the true potential of play
ON THE BLOCK
and inspire tomorrow's creators. Sphero promotes
STEM and can be used as educational tools by
teachers. Cloud-based technology enables powering
these relatively inexpensive toys which are designed
There is a steady stream of startups, new companies organic, free of toxins and gluten and preservatives as “art toys” inspiring self-expression. The educational
and assorted fresh-face wannabes who are praying and all that nasty stuff, packing is simple and clean. We program encourages hands-on computer science;
their latest and greatest business ideas make it to the can’t wait to try the tree-free toilet paper (made from students can build their own, learn to code and join the
finish line. While the vast majority of startups are from sugarcane and bamboo grass). Brandless only sells community.
the online world, a fair number are suppliers with new Brandless products and the site is the only place one
goods and services and—amazingly—the odd physical can buy them. Everthread
store startup. Interestingly, nearly all Shoptalk presen- Allbirds Everthread uses a patent-pending proprietary 2D/3D
tations were introduced, not with the creator’s resume Winc The store in New York in Soho is jammed every image-rendering software to create high resolution
or their divine inspiration, but rather with the amount (formerly Club W) weekend. The founders are charming and New Zealand customized views of products for its retailers and
of VC funding they had managed to secure to date. provenance makes a strong sustainable back story with brand clients. Say goodbye to expensive photoshoots
Wine sales are growing in
As a measuring device for business soundness and attractive sneaker-esque shoes made from wool, culled and excessive time in Photoshop. Everthread takes one
the US, taking share from
success, that says more about the state of the industry from all those Kiwi sheep, complete with sustainable rendition and generates thousands—color, fabric, size,
other spirits. It’s a $60
than any of the actual presentations themselves. farming and animal welfare standards. Sustainability is hardware—all the choices that allow for personalization
billion business, but only five
percent Direct to Consumer their ethical compass, and they are working on a new and customization. Everthread enables companies to
The Robin Report collective is a tough judge and jury,
and e-commerce. Winc is a generation of shoes made from eucalyptus fiber— market and sell new product without the accompany-
and here are a selected few startups that caught our
vineyard with DTC distribution another New Zealand staple. ing inventory investment, thereby reducing inventory
attention
(they define themselves as a vineyard so they can ship risk. At the same time, Everthread’s ability to send
Brandless interstate). They make wine exploration and discovery Sphero suppliers production ready files of custom purchases
easy, selling over 100 wines on the site at great value. unlocks the potential for an on-demand supply chain.
How improbable is it that
Only seven months old, but within 60 hours of Real-time consumer data and analytics generated by
you make educational,
launching last year on July 11, Brandless had already Appear Here app-enabled connected
customer searches/configurations enable targeted
shipped to 48 states, which they do every day now, marketing campaigns too. According to CEO and
The sharing economy plays out reframed real estate robotic toys that have an
often before noon. Brandless is “trademarked white founder Nicole Mossman, Everthread’s initial target
with pop-ups and shared spaces at Appear Here. uncanny resemblance to
space.” Reimagining what it means to be a brand. market is home décor and furnishings, but the technol-
WeWork fuses with Uber to offer concierge services the BB-8 droids in Star
Not anti-brand, generic brand, or invisible brand. Said ogy is easily applicable to apparel and accessories.
to locate and rent nontraditional retail spaces in cities Wars sagas? Instead of
founder Tina Sharkey: “Our intention is to make sense
of modern consumption. People don’t want value around the world that create commerce communities.
and price to not be related to each other. They want Serving as a marketplace, Appear Here brings together
socially responsible brands that reflect truth, trust and a community of brands, entrepreneurs and creatives
to space in the world's best cities. The pop-ups serve
transparency and build community.” The Brandless The Most Ubiquitous Buzzwords
model is better products for less money. Pretty much as innovation labs to experiment with store concepts
everything is $3. It specializes in food, home products, and design. There is a tribal vocabulary for startups, some of which are arcane, and outsiders may need translators to keep
personal care and beauty. Products are of high quality, up. But there’s got to be a limit to the repetition of key words that makes them so ubiquitous, and possibly
Perch meaningless with overuse. If the approx. 8,500 attendees at Shoptalk discovered anything, it might have been
that if something was worth saying, it was worth saying over and over and over. The Robin Report team of
You walk up to a Jo Malone display of fragrance. You
erstwhile reporters compiled a list of the most commonly used—and abused—words and phrases in retail.
lift a bottle to sample its bouquet, and voila, a screen
These are the buzzwords emblematic of the startup culture, and what was said … repeatedly.
comes to life with gorgeous animated picture of all
the floral ingredients in the bottle. Take two senses: It
In no particular order:
helps you visualize a scent! You lift a Valentino pump
off the display and a screen lights up with a history AI • Personalization • Data Sharing • Platform Sharing • Engagement • Curated
of the design craft and artisans who made the $800 Members • Transparency • Sport of Retailing • Visual Discovery • Reveal and Squeal
shoe. Perch is in-store messaging on steroids. Its touch
For Profit and for Purpose • Velocity • Use Case • CRM (hey, it’s sales) • Authentic
screen, interactive glass technology unites the physical
and figurative with a customer experience that goes Existential Questions • Existential Crisis (no doubt prompted by the questions)
beyond delight. If you’re looking for creative customer Having a Moment • Lean In • Community • Customer Journey • Frictionless
engagement, Perch delivers. Seamless Experience (that’s frictionless) • Conscious Capitalism • Relationship
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ROBINREPORT THE NEW NORMAL WHERE NOTHING IS NORMAL | RECAP OF 2018 SHOPTALK
to close the speed gap. In both businesses, we have to ask the that: How do we supply quality
scenarios customer expectations question: does a retail company fresh food that isn’t double-trans-
What the Industry may be the death knell of retail
as we know it. Corporate officers,
boards, investors and Wall Street
and its employees mirror their
customers in diversity? On top
of that, company after company
ported and double-handled so that
it can spend its life cycle in your
refrigerator, not in the store? What
Isn’t Talking About … —you’d better expand the portfolio
to cover your costs of simply doing
is responding to the times with
increased focus on initiatives for
will food shopping look like in five
years?
your retail business. women. But seriously, how many
retailers have a team of C-level Amazon Go reports customer
Whether by conscious omission or honest oversight, there are a The Retail Store leaders who are women? anxiety about leaving the store
number of issues that remain lurking around the retail and e-commerce without checking in with anyone.
The term retail is centuries old. Technology Shaping What does it mean to make a
world that fail to make it to center stage. We’ve gathered some of the The term store triggers images of Behavior purchase when you can’t see the
more obvious—if not the most important—topics that remain behind buildings filled with stuff. We need
THE TAKEAWAY the curtain in the new world of retailing. a new lexicon that embraces new While the Shoptalk agenda was
transaction?
and old-world commerce. Will the chock full of business people, Narcissism rears its ugly head. In
Shoptalk is becoming an traditional “store” even exist in creative types and techies, what an all-about-me beauty culture, we
institution for innovation and New Metrics to ty, especially as we use technology to 20 years? Not so sure. was perhaps missing was some- could be living a “mirror, mirror on
education. Through the clear Measure Success create immediacy. In New York City, body to explain what it all meant the wall” moment that puts us out
the last mile means the streets are Ethics in Algorithms in psychological terms. Because of touch with what we really look
vision of Anil Aggarwal and As old measurements like comp store populated with Instacart deliveries all of this technology is having a like. Kudos to CVS for initiating
the expertise of his team, sales, ROI and sales per square foot on bikes and skateboards, along with Built-in bias, cultural profiling,
profound impact shaping human beauty ads that are free from unre-
continue to lose their relevance in the vans and trucks. Ubers and Vias are insensitivity—these are a few
this is one conference that behavior. These paradigm shifts alistic Photoshopping. And Aerie,
new age of retailing, there has yet stressing the aging infrastructure and of the issues emerging from an
you can rely on for the shape are changing our expectations and the division of American Eagle
to emerge a new science to reflect the streets are littered with Amazon, unmonitored group of engineers
creating new realities for both the Outfitter, now known as the Body
of things to come. You have the state of the ROI art. We suggest who are creating machine learning
FreshDirect and countless other people who do this for a living and Image Positive Brand for lingerie is
random conversations with recasting the metric to ROIC, return instant-delivery vendors’ branded and robots. Data is another Wild
those who shop for the goods and involved with an organization that
on invested capital. Diane Hoskins, boxes. There’s also the issue of West. A lot of retailers and brands
the most interesting people in services the retail world offers. helps combat eating disorders.
co-CEO at Gensler, the world’s waste in conventional grocery stores hire an army of data scientists but
the sessions, at meals and the The latest data breaches of a major
largest architecture and design firm, resulting from the fact that product are they asking the right questions Speed kills. How quickly does
retailer and Facebook reinforce
receptions. You learn the latest has this to add, “For years we looked and using the right tools? Wharton anyone really need anything?
is sitting in stores and subjected to the tenuous relationships people
dreams and aspirations of new at year-over-year sales, footfall, units double-handling, over-transportation professor Peter Fader isn’t so Search on the mobile screen needs
have with the businesses that serve
per sale, brand awareness, social is a main culprit here. Is food delivery sure. “Most data scientists aren’t to show up within four seconds;
world commerce. You worry them. In the meantime, the brave
impressions, and online sales lift the solution? In both cases, we are scientists, they’re data wranglers. a text must be returned instantly.
about traditional retail in the new world of blockchain—which
per geographic market. As a result, wasting valuable resources. Sooner But the science of data science FOMO has become an established
up until a few months ago was
face of such entrepreneurial Gensler created the Experience Index is using data as a fuzzy window psychological phenomenon. An
or later the industry will need to deal solely thought of in terms of virtual
optimism. And you are grateful to identify factors that really define with this issue, inevitably pushed by to propensities, going below the online purchase? Customer expec-
currencies and fintech—is now
and build experience and quantify consumers themselves. surface of the data and using it to tations have reframed the business
that Shoptalk has taken upon exploding into the business
the impact of design on experience.” make better informed statements model to the extent that one hour
itself the ambitious and nec- consciousness and has the poten-
Using a mixed-method approach of The Cost of Customer about an individual ‘X.’ You can’t
tial to do for the supply chain what may be 59 minutes too late. Given
essary mission to help guide quantitative and qualitative data, Acquisition for Digital and do better than machine learning
the original worldwide web did the option, apparently, we prefer
a hugely challenged industry. Gensler built a model that defines the Cost of Speed to Market for classification and description;
for communications. Walmart is a not to get up out of our homes and
what it means to create an experi- putting people in buckets and take a walk. These expectations
We’re not convinced the VC forerunner utilizing blockchain: It is
Consider what customer expec- understanding why people are in
ence from the factors that create involved in a food safety pilot with are putting a significant strain on
cabal is going to save retail, tations have wrought. “I want it their buckets.” But machine learn-
experience, expectations interactions IBM that enables the chain to trace businesses who have no choice
but they are backing some now where and when I want it” has ing has its limits. Fader elaborated,
and space—a new ROI. products from the shelf back to but to fall on their knees at the
inspiring, impressive, energetic created a distorted demand, only “We don’t want to segment on
the farm in a matter of minutes. often unrealistic and superficial
The Collateral Damage exacerbated by speedy Amazon who demographics, psychographics or whims of the consumer. We at The
endeavors that make Shoptalk
of Delivery Services and still doesn’t have to show a profit behavior, we want to segment on Robin Report, going against trend,
so refreshing and relevant. Packaging in retail. Digital natives are opening propensities. We can do that.” suggest that we all slow down long
stores largely because the online Our editors call out a few examples enough to ensure the future of
One of the dirty little secrets of the cost of customer acquisition is going Do your Employees Mirror of how technology is impacting us retailing healthy by thinking through
online world is the environmental to shutter their businesses. The your Customers? in more subtle ways. solutions that are sustainable.
damage being done by the delivery legacies are scrambling to retrofit
systems. Use of excess packaging has their models and invest in software When you’re in an enormous Jason Ackerman, CEO and Founder,
emerged as standard operating prac- solutions, a new army of digital group of retail startups, you might says, “FreshDirect isn’t about home
tice. Convenience trumps sustainabili- engineers and delivery systems want to look around and notice delivery, but about how to build
who’s talking. As in so many other a better food business.” More on
16 / WWW.THEROBINREPORT.COM / 17
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