The key themes and stand out sessions from Europe's most influential retail event - Why everyone was talking about Amazon - Practicology
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
The key themes and stand out sessions from
Europe’s most influential retail event
Why everyone What Casper and Visual discovery,
was talking Dollar Shave Club do China, corporate
about Amazon differently culture, AI & more
October 2017
[Shoptalk Europe Report]
All about Amazon
Whether to partner with or compete against Amazon was the question on many minds in the
audience at Shoptalk Europe. Speakers shared their differing experiences.
Its growing domination in the US showcase the latest products and insight from its website. Many
and UK particularly, meant that experiences to remain relevant. customers were looking at one
Amazon was top of mind for both best-selling style of bag that was
retailers and consumer brands He discussed the “spiral of store not offered in leather, and then
attending the show. closures” that some retailers moving on to look at leather bags.
face, but said Hudson’s Bay Tumi created a limited run on a
Amazon’s growing share of Company is taking option two: leather version of its Calais bag
Western consumers’ wallets, its “Play to win with great stores and to see if it would sell, and “it
increasing influence as a shopping internet… In Germany we are not is now a $2 million business in
search engine, the development pulling back, we are investing, its own right.”
of its paid ad platform, the introducing global brands not seen
Prime subscription model and the before in Germany and investing in Sale product is often also
purchase of Whole Foods were all ecommerce and fulfilment.” exclusively available on Tumi’s
developments that formed part of own site, and the brand gives
the Shoptalk conversation. access to a VIP online Sale one
After-sales service day early to customers signed up
In a keynote session to a Premium luggage brand Tumi’s to its email marketing programme.
packed audience, Hudson’s Bay Chief Digital Officer Charlie Cole
Company CEO Jerry Storch was said that its after-sales service Monogramming of its products is
clear that trying to replicate allows it to differentiate from another online service offered
Amazon’s offer is not a long- Amazon, so it’s crucial to collect by Tumi that gives customers a
term strategy: “Trying to copy the right data. This can allow you compelling reason to buy direct.
the Amazon home delivery model is to develop a direct relationship Cole says the service lifts
bankrupting the industry.” with the customer even if they conversion by 5% to 10% during the
originally bought your product holiday season.
The Canadian-headquartered from Amazon. “Warranty data is
business is opening department crucial, but retailers often Tumi’s Charlie Cole was clear:
stores in continental Europe, and ignore it because they are in the “Don’t try to out-Amazon, Amazon.”
believes that a differentiated business of selling, not serving.”
store experience supporting a
range of multichannel journeys is “If you are a brand that sells on Amazon Prime Now
the way to compete; particularly Amazon the place you can win is The event saw Amazon present on
journeys where the store acts as after-sales service,” he said, and the main stage on the development
the fulfilment channel, rather added that if a product breaks: of its Prime Now proposition.
than expensive home delivery. “Amazon is not in that business. The speed and customer-obsession
We have to care about the customer that underpinned the development
Storch said that stores matter as for longer than 30 days.” highlighted how differently Amazon
they have the potential to offer thinks and behaves compared to
efficiency, service, impulse and Tumi has also created limited traditional retail businesses.
entertainment; but stores must edition product, based on customer
Tweets
Amazon took Prime By 2023, 50% consumers @julia_b0sch of “84% of customers are
Now from concept will be millennials... @OUTFITTERY doesn’t in our CRM” @Harrods
to reality in 111 and millennials believe Amazon will own Michael ward on their
days. They don’t want an experience! fashion. Online searches impressive customer
just fail fast - they #Shoptalkeurope are an agony of choice view & loyalty at
innovate fast too. @infoseceditor and require you to start #Shoptalkeurope
#shoptalkeurope from zero every time. @charlottefroe
@mattgunn #ShopTalkEurope
@julievargasad
www.practicology.com 1
[Shoptalk Europe Report]
Amazon Prime Now Director allowed the business to learn He thinks Tesco can improve on
Mariangela Marseglia explained a lot about same-day last-mile this too, saying that the average
that the development of the delivery (DIA already offers a distance from store to customer in
service began with the creation more traditional online shopping central London is half a mile, so
of a draft press release, that set service that works well for larger it should be possible to deliver
out the customer experience Amazon weekly and bulk orders). more quickly than an hour from the
would like to deliver with the order being placed, “but for now
service. From here the proposition DIA has many neighbourhood stores, we are stopping at one hour.”
was reverse engineered in just and Falcón said that about 70%
111 days before it launched to of the Spanish population comes The reason for these launches is
a select number of zipcodes in into its stores every year. For clear (aside from competing with
Manhattan, New York. him, offering products through Amazon). Letts said: “We live in
Amazon Prime Now is about the unplanned, planned world.”
Crude prototyping of the order increasing share of wallet for
picking technology provided existing customers, and increasing He explained that consumers have
feedback on system design, before visibility for its growing become used to taking their phone
testing in real stores to get portfolio of private label brands. out to order a cab as they step
feedback and iterate the user on to the street. They don’t plan
interface. A new delivery app was He added that the partnership or think about their needs far
also created to allow couriers was in no way an indicator in advance, and so “The biggest
to be as efficient as possible in that stores are becoming less challenge is how to satisfy latent
point-to-point delivery. important for the business. DIA attention deficit disorder. The
believes its small grocery stores closer you are to the customer,
Marseglia described Manhattan as have an increasing place as the better you can satisfy the
an “urban jungle”; if it worked demographic and consumer behaviour attention deficit disorder.”
there it would work anywhere. changes mean customers shop more
frequently with smaller average For Dixons Carphone’s Group CEO
Amazon Prime Now has arrived order values. Seb James the critical problem
in more than 50 cities in nine the industry must solve is what
countries. In July this year it Falcón concluded that Amazon’s the future role of a stores-based
arrived in Singapore, the first acquisition of Whole Foods backs omnichannel retailer should be.
city where the Prime Now app up the argument over the future
launched where there was not a role of the store. In his fireside chat, James said
supporting localised version of that his business needs to be
the main Amazon website. able to serve pause-and-resume
Future role of stores shoppers, as the average customer
And Amazon’s ambitions extend The UK’s largest retailer, journey for a new mobile phone
beyond simple store orders. In supermarket chain Tesco, agreed takes 90 days. He wants customer
20 US cities and London, Prime that stores are crucial to the journeys that have begun online to
members can order from restaurants delivery of new services and more seamlessly resume once they
and receive food in under one propositions. arrive at a store.
hour; in direct competition with
Deliveroo and Uber Eats. Tesco Managing Director Online There is no one-size-fits-all
Adrian Letts said that his answer to whether retailers or
Spanish convenience and grocery stores support an “unrivalled brands should embrace Amazon,
chain DIA is offering its products distribution network”, and allowed differentiate or do both, but
through Amazon Prime Now in Madrid it to launch services such as it’s clear that consumer-focused
and Barcelona. DIA Chief Corporate same-day click and collect to 99% businesses cannot afford to put
Officer Amando Sánchez Falcón said of the UK population, and one-hour their heads in the sand over the
that partnering with Amazon has delivery in central London. potential threat.
Tweets
@CharlieCole 80% of @depop’s 7 “Artificial Intelligence The theme of
of @tumitravel million community are Dominates The #Retail #shoptalkeurope was AI,
monogramming is 55% of under 25. A whole Conversation At “I say embrace it. And
business during holiday different kind of #Shoptalkeurope” then go build something
season #personalization retail with its own writes @rachel_arthur great” via @rjpittman of
lift conversion 5% unique challenges. at @Forbes @ebay
#shoptalkeurope #Shoptalkeurope @PaulMilner9 @PrimaryVC
@natalaz @philipbentonEMI
www.practicology.com 2
[Shoptalk Europe Report]
Cracking China
Both Chinese businesses and European retailers who benefit from tourist spend highlighted
how large the opportunity is for Western brands who can engage Chinese consumers.
Alibaba Europe General Manager experience that a mobile app
Terry von Bibra advised that can’t serve.
the shopping revolution taking
place in China is something that He concluded: “Transformation
retailers the world over should in China has been driven by
be watching, whether they sell in ecommerce, but [in the future]
that market or not. it will be driven by the seamless
experience. It is exciting to see
“The Chinese consumer is the which of these learnings make
most demanding consumer in the their way back to the West.”
world,” he declared. He believes
that watching emerging customer Both Harrods and Value Retail
behaviour in China indicates what (which runs designer outlet
retailers and consumer brands can shopping destinations such as
expect to have to deal with in the the UK’s Bicester Village and
future in the West. Alibaba’s founder Jack Ma choosing Italy’s Fidenza Village) discussed
seafood at a HEMA store
how they benefit hugely from
He highlighted that many Chinese Suning to understand how Chinese Chinese tourist spend. Both are
consumers no longer carry a consumers want to buy consumer destinations for the majority of
wallet, as they pay for everything electronics online and offline. Chinese tourists when they come to
with their smartphone, and that the UK.
Alipay is the “world’s largest Alibaba has also bought a
digital wallet”. shopping centre operator with 18 Value Retail has also opened
malls in China, to understand how two villages in China to bring
Alibaba opened a Tao Café with it could build tools for brands the European designer outlet
no cash register, specifically to connect online and offline experience to Chinese consumers
to learn about cashless customer visits from the same customers. closer to home.
experiences.
And its grocery store HEMA allows With its 730 million internet
customers to hand-select product users, China will continue to be
Offline learning such as shrimp, which can be high on the agenda at the next
Alibaba is best known for its prepared to eat on the spot, Shoptalk event in Las Vegas in
Tmall online marketplace, but taken away or delivered to their March 2018. We look forward to
increasingly the company is home. Von Bibra is clear that hearing how more Western retailers
investing in offline propositions. there is a requirement for a are responding to the innovation
It has partnered with retailer store to fill the gaps in customer coming out of the East.
Tweets
Loved @shoptalk My takeaway Delivery mastered! 44% of executives The “mass market”
- three key from my i’view Alibaba can said a priority in of the future
takeaways 1) AI is w/ @Harrods deliver within 2017 is to improve will thrive on
the new ‘mobile’ #ShopTalkEurope 24hrs in China store experience 3 principles:
2) ‘voice’ will was how with target to @PlanetRetailRNG Trust, Influence,
replace ‘search’ disciplined in deliver anywhere @orckestra Personalization.
3) Muesli being a luxe in the world in #ShopTalkEurope @ATKearney
sells online player. American 72 hours. @oskarlauritzen @MirkoWarschun
#Shoptalkeurope counterparts, are @debweinswig #shoptalkeurope
@PhilipBentonEMI you listening? #startup @lwalendy
@philwahba #ShopTalkEurope
@julievargasad
www.practicology.com 3[Shoptalk Europe Report]
Visual discovery: see it, want it
Pinterest and Facebook both users’ searches are not normally
commented on the discovery trend – brand specific, the platform
where consumers discover products is helping them to discover
and desire them, through emerging products and brands. He added
and often highly visual online that Pinterest is the number one
platforms. organic web traffic source for lots
of brands.
Retailers and consumer brands are
being courted by both Pinterest Facebook Director of Retail,
and Facebook, keen to claim their Ecommerce & Fintech Martin Harbech
place within the non-linear spoke about the brands disrupting
shopper journeys that modern mundane product categories, such
consumers take on their way to as Worby Parker, Dollar Shave Club
making a purchase. and slipper specialist Mahabis. Mahabis slippers have been visually
discovered through platforms such as
Such brands are often discovered Instagram
Pinterest President Tim Kendall by consumers through non-
claimed that “people use Pinterest traditional marketing. and discovered by consumers by the
to plan their lives,” and that brand investing in appearing in
while Amazon or Google are great Harbech says Mahabis was both Instagram and Facebook feeds.
for helping consumers find things created and discovered by
they can describe, Pinterest consumers because the brand Retailers and more traditional
supports “visual discovery”. invested in appearing in Instagram brands need to be aware of the
and Facebook feeds. The brand’s visual discovery trend, and ensure
Kendall admitted that most content founder used search data and found that they are including visual
on the platform comes from that there was no well-known discovery elements in their top of
retailers and brands. As Pinterest slipper brand. Mahabis was created funnel marketing activity.
Casper aims to be a
category killer
US-based online mattress retailer Target, and a partnership meaning
Casper wants its brand to be its product is available in 1,000
“associated with getting the best Target stores. But Krim is not
night’s sleep possible”. counting on this alone to cement
the brand in consumers’ minds. Casper has partnered with American
Airlines to increase brand awareness
Co-founder and CEO Philip Krim
talked the Shoptalk audience Casper has also become the However, the business is wise to
through the company’s strategy, as “official sleep product partner” the fact that Europe is not one
it aims to make its “universally of American Airlines, with a homogenous market. Aside from
comfortable” mattress the first range of products created for differing regulatory standards,
choice for consumers around the Economy Plus upwards. Quirky Krim pointed out that Casper has
world. outdoor advertising, particularly customised its core product for
on public transport such as the each market. Germans apparently
As it’s still a young brand, it’s New York subway, has also been prefer a firmer mattress than the
in the process of extending its deployed to build brand awareness. norm.
customer base from the early-
adopter segment (who were prepared The business launched in Europe Whether we’ll all be sleeping on
to buy a mattress online they’d a little over a year ago, and Casper’s products in 10 years’
not yet tried) to building broader sells in Germany, the UK, France, time remains to be seen, but if
brand awareness. Switzerland and Austria. In Europe Krim’s ambition is realised then
all sales are online, and so the brand will at least make your
Helpful in this aim has been customers in the region must buy shortlist the next time you are in
investment from US retail giant before they try. the market for a mattress.
www.practicology.com 4[Shoptalk Europe Report]
Culture Club
Business culture and leadership is crucial to growth in these challenging
times, according to a panel of seasoned retailers at Shoptalk Europe.
Culture comes from the top, and on Tesco’s Clubcard when it was wasn’t set up in the way that the
so Practicology’s Chairman Martin still within an incubator unit and customer is operating then I feel
Newman was delighted to be joined said that this allowed the team to we would lose out.”
by two retail leaders to discuss really get on with developing the
how their peers can ensure growth idea without distraction from the He does not believe in having an
in what are challenging trading rest of the business. ecommerce specialist on the board
conditions for many. because he considers that for
Her other piece of advice was all his directors “if you don’t
Mike Logue, CEO of UK bed retailer for CEOs to appoint a Chief understand digital then you don’t
Dreams, and Christine Cross - Transformation Officer “to support deserve the seat.”
a Non-Executive Director for change, but also to understand how
retailers including Portugal’s fast the change can go and have Finally, both Cross and Logue
Sonae, New Zealand’s Kathmandu and some cultural sensitivity.” agreed that the way retailers
UK department store Fenwick – both measure success needs to change
had plenty to say on the subject. She added that “too many people if they care about continued
are hung up on organisation growth. Cross says she’s aiming to
Logue and Cross were insistent design, and are not hung up enough change the KPIs measured by the
that the company culture must on sharing data.” She believes retailers she is involved with,
encourage a focus on the customer. structure is less important as as metrics such as store like-for-
Cross said retail CEOs don’t need long as customer and business like sales become less relevant
to be shopkeepers, but they must insight – often generated by the in the digital age. “If KPIs are
be “customerkeepers”. ecommerce team – is available segmented they will never have the
across the business. customer in mind. Everyone should
Mike Logue added that a focus on have a net promoter score (NPS).”
your customer is preferable to an
obsession with competitors: “We Removing silos Logue concluded: “If the whole
are listening to the customer, Logue has removed silos from his organisation doesn’t understand
and what they are looking for; business with ecommerce under that the customer is paying all
not just what the disruptors and a Marketing Director. “Fully- of the bills then the structure
competitors are doing. If you integrated marketing looks after won’t work. Every meeting at
just react to the next competitor everything to get customers to our Dreams starts with the customer,
you are in trouble. You will business, because the customer and 3,500 customers a week tell us
be spending money on changing is digital-first. If my business what they think.”
policies that don’t need to be
changed.”
When he joined Dreams he had never
sold a bed before, so he “went out
and listened to colleagues and
listened to customers, and that
led to the whole business needing
to transform.”
Incubator teams
Christine Cross was also keen that
retail leaders create the right
climate for innovation. Her advice
is: “Make sure you don’t punish
failure.” She added that setting
up incubator teams can help new
ideas to get off the ground in
large organisations. She worked Practicology’s Martin Newman (L) discussing leadership with Mike Logue and Christine Cross
www.practicology.com 5[Shoptalk Europe Report]
Dollar Shave Club on disruption
Disrupting the razor market and Dubin believes that surviving Here he thinks he has spotted
achieving 20% share by volume and thriving in a world with another gap in the market; content
isn’t enough of an achievement Amazon and Alibaba requires somewhere in between Esquire and
for Dollar Shave Club CEO Michael “category specificity and category Bro Bible for “real men with
Dubin. Now he’s moving on to “Act expertise”, delivering a service feelings.”
Two”, and delivering against the far and above what anyone else
desire to “help guys take care of offers. In 2018, the DSC proposition
their minds and bodies.” will launch in Europe too, and
Act two has seen the launch of Dubin will prove whether his
During his fireside chat, Dubin oralcare, as DSC executes against mix of customer focus, category
explained that his mission when he the broader minds and bodies brief, understanding and content is enough
founded the business was simple, and the business has a team of 20 to capture similar market share on
to make it cheaper and easier creating content as a value add for the other side of the Atlantic.
to buy razors and overcome the customers.
“razor fortress” that often sees
the products locked in anti-theft
Dollar Shave Club has just launched
cases in stores. oral care as its mission expands
He’s built the business on a
subscription model, but said
that the only reason for doing
this was that it enhances the
customer experience. “Guys drag
out their razor as they don’t
want to go to the store to get
a new one.”
The Dollar Shave Club (DSC)
model allows customers
to pause or cancel their
subscription easily. Dubin said
he doesn’t believe in forced
subscriptions, and will offer more
choice in how customers purchase in
the future.
AI steals the show
Just in case you weren’t already He described three phases in the Pittman concluded that the age
convinced by the possibilities evolution of AI: of artificial super intelligence
from artificial intelligence (AI), Artificial narrow intelligence might not be as far off as some
eBay’s Chief Product Officer RJ – where many applications are think. He said fashion designers
Pittman was on hand to remind the today solving point problems with in Japan are already employing
Shoptalk audience that “all of simple bots. AI to design collections,
the progress in AI in the next predicting consumer trends ahead
two years is going to lap the Artificial general intelligence of the competition.
last 30 years.” – tackle problem-solving such as
finding a pair of shoes to match a If Amazon was the most heard
He said that retailers who aren’t dress a consumer has just bought. word during the event, then AI
looking at or already using AI came a close second.
are “braindead” and pointed out Artificial super intelligence –
that the technology will soon allowing brands to create one- Developments will move
be ubiquitous, as smartphones – of-a-kind products for specific quickly, and if you don’t
including the already launched customers, predicting what they start learning about AI now
Google Pixel 2 – include an AI- will want before they know they then you are unlikely to be able
enabled chip for machine learning. want it. to keep up.
www.practicology.com 6Shoptalk 2018
The next Shoptalk event Eligible retailers and
takes place in March brands can apply for
2018 in Las Vegas, with Shoptalk’s Hosted
the aim of creating Program, and receive
a truly global forum a free ticket and travel
for the retail industry. allowance. Full details of
Established retailers and the program are available
brands, start-ups, tech on Shoptalk’s website.
companies, investors,
Sign up now to join the
media, analysts and
7,500 attendees that are
others will all come
expected at the event.
together to learn,
collaborate and evolve. www.shoptalk.com
About We are a team of retail and ecommerce experts focused
on solving the digital challenges of retailers, consumer
brands and their investors.
Practicology’s consultants offer strategy matched
by practical support; through a range of advisory,
ecommerce trading, digital marketing and training
To discuss how Practicology services.
could assist you get in touch at:
From offices in the UK, Australia, Hong Kong and
hello@practicology.com Guangzhou, we support a diverse global client list
+44 (0)20 7323 0539 that includes Nike, Pandora, Skechers and Reckitt
Benckiser.You can also read
