This year’s Shoptalk was one of the first big retail shows to come back in real life after a two-year hiatus.
Shoptalk brings people together (over 10,000 of them) from around the world and is a key fixture in the retail calendar.
Here are some of the highlights:
There were panels focusing on retail innovation and trends from Europe, then China and finally Latin America. However, there was one common theme: personalization and humanizing the digital experience.
In Europe, IKEA is focusing on speeding up the pace of digitalization transformation driven by consumer demand. The Liverpool stores in Mexico noted that click and collect is almost ubiquitous for one simple reason: you can’t leave a package outside the door in Mexico.
It was standing room only for the China panel and we heard practically one thing only: Live streaming. By the end of 2022, the live streaming market in China is forecast to hit $4 trillion. But another fascinating trend in China is also all about humanizing the digital experience.
In Latin America, the market is shaped by consumer expectations where the subscription model is rejected, and free home delivery is the norm. As if to crystalize the fact that retail across the globe is the same but different, Mexican consumers frequently visit shopping centers. Why? Because it’s a safe place to be.
It’s not every day that you get to hear about the forces shaping retail in 2022 from three major consultancies. On this day: Bain & Company, Boston Consulting Group and NielsenIQ. Here is a summary:
Aaron Cheris from Bain & Company said that retailers who can “see” across their end-to-end value chain will drive higher revenue growth, lower costs, increase market share, see better returns on investment and deliver improved stakeholder returns. So, there are many reasons to embrace sustainability initiatives.
Next up was Lauren Weiner from Boston Consulting Group who shared her thoughts on why retailers need to become media organizations. But to do so they need to build the right platform in order to compete.
Lorelei Bergin from NielsenIQ covered the third force shaping retail this year, namely inflation. She said this is going to impact the relationship between retailers and their customers: As the latter’s behavior shifts through necessity, retailers will be scrambling – but technology will bridge the gap.
Lead with data to help retailers understand their customers and their behavioral shifts. “Digital used to be an outpost for the store – a nice little business – and now the store is a critical component of any digital strategy,” said Harvey Bierman, Chief Digital Officer at Christy Sports.
Everyone I spoke to at the conference said how delighted they were to be back in real life and this was echoed by the organizers. But, at the same time, speaker after speaker hailed the metaverse as “the next big thing” for retail. So, which one is it? Physical or virtual or can we have both?
Until we arrive at the metaverse future, there are some fundamentals we need to consider and that means consumer behavior and the role of stores.
And in a panel session it was my fellow RETHINK Retail influencer, Hitha Herzog who said that consumers want more access and that adding more channels adds to the shopping experience. Though this is a challenge for retailers, in that it is up to them to figure out how to target each individual consumer.
The discussion moved on to convenience and what shoppers are seeking, whether it be contactless payments, grab and go technology or easy checkout, and this threw up an interesting question: Can shopping ever become too convenient?
This point was echoed by Target. It shared that 95% of all e-commerce orders are fulfilled from stores, and to ease the customer experience, it is opening drive-through returns hubs where customers can take their return items without having to leave their car.
Stores and inventory
Antonio Nieves, CEO of Interior Define, refers to its stores as studios – and they don’t carry any inventory.
This was a different perspective from Macy’s chief store officer, Marc Mastronardi, who said it is looking at all their stores through the eyes of the consumer. Do they shop there? Use them as fulfilment hubs? Or use them primarily to browse and purchase online?
Whatever the answer, it serves to demonstrate that stores remain and will always remain a crucial and central part of retail businesses (pure-play aside). The emerging challenge however is digitalizing them while retaining the human connection.
And this effectiveness of stores was underlined by Interior Define who said that when they open a physical space, conversion rates go up 2/3%.
The message from Shoptalk today was that whilst we all love to shop online, we love to shop in store even more. The store is dead, long live the store.
In my next post I will discuss the top 11 takeaways from day four at Shoptalk 2022.