SHOPTALK 2023
LAS VEGAS : MARCH 26-29, 2023
THE THEATER OF RETAIL
2023 JULY ISSUE
Written by: Terri Fisher
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From the Desk of the Publisher
The contributor of this article, Terri, has been a retail veteran, and with her extensive experience as the role of the buying and merchandising, she has a very experienced experience that she can share with the industry, especially in the intimate apparel. Terri visited the conference regularly for three years before the pandemic. She did the online conference on one occasion to try to stay turn to the retail industry.
This time it was held from March 26-29 at Mandalay Bay, Las Vegas. Some said that it was the “retailers reunion” and prior to the conference there were already 275+ speakers would take part, attendees from 48 countries have registered, 80-plus retailers and brands planned to send their executives to attend, and 200 representatives for the media would join, not counting sponsors and exhibitors who would be there. The turnout for the attendees ought to be over 10,000 to make this the biggest event for the retail industry.
Please read the reports that Terri made for the keynote speakers and the individual sessions. It is so heartwarming to hear that brick-and-mortar stores are coming back from Terri.
Shoptalk convenes thousands of retail changemakers every year to create the future of retail. This was my third time attending, and first time since the Covid lockdowns. It certainly did not disappoint! The Shoptalk agenda covers the latest technologies, trends and business models, as well as the rapid transformation of how consumers discover, shop and buy-across all retail verticals. Shoptalk’s agenda features zero pay-to-play content, leading the retail industry narrative and promising insights and perspectives not found anywhere else.
Shoptalk’s 275+ senior-level speakers are industry leaders and innovators from companies ranging from established retailers and brands to innovative new startups and prolific investors. Shoptalk 2023 also featured brand new Shoptalk Original Content, including independent research and data, along with the Shoptalk Retail Zeitgeist, a framework for understanding the most important forces, challenges and opportunities in retail today, developed in-house by the Shoptalk team.
There were 61 countries represented at the conference. For the first time, Shoptalk coordinated over 50,000 one-on-one meet-ups, each meeting 15 minutes long, happening simultaneously with both parties agreeing to a meet-up. Just like speed-dating but only for retail connections! There were 700+ technology advisers, 80 different sessions with over 50 hours of content. Innovation and new technologies are what it is all about. The conference attempted to answer the following fundamental questions:
- What does a best-in-class shopper engagement look like?
- What emerging channels will deliver growth for my business?
- How do I deliver an outstanding store experience?
- What tech investments will boost my revenue and profitability?
- What organizational changes will help me win?
I will go through with you, my readers, each presentation that I felt would benefit you and your companies. There were so many excellent presentations that I ask you to read all the way through.
There were 4 key buzzwords that I heard over and over and over: AI, Sustainability, Authenticity, and Brick-and-Mortar stores are back! The conference was EVERYTHING AI!
Keynote #1: Bill Ready opened the floor, Bill is the CEO of Pinterest. Bill is also a director on the company’s board, positions he has held since June of 2022. Previously he was the president of commerce and payments at Google; chief operating officer at Pay Pal and the CEO of Venmo. Bill’s session was entitled ”Rediscovering the Joy of Shopping”. He was interviewed by Sara Eisen a CNBC Journalist.
For the next 20 years, Bill believes e-commerce will represent the “joy of shopping!” In the past consumers did window-shopping on social media but the store was closed! Soon users will be able to take action. Pinterest is already utilizing this technology on a site called Shuffles for Gen Z consumers which are also the fastest growing users on Pinterest. Pinterest will have shoppable collages of product as they believe consumers will go to Pinterest to shop. It starts with inspiration, then consideration, then ACTION! Retailers will be able to bring their catalogs to life on Pinterest. There are over 450 million active users on Pinterest and your products can get in front of these shoppers. It will connect customers to retailers. The users are now the curators, not just AI. If you want to know what did Taylor Swift wear in her second set last night at a concert, Pinterest will be able to show you the outfit and options for each product she wore. How fun!
Keynote #2: Imran Khan, the co-founder and CEO of Verishop, an e-commerce platform that champions independent and emerging brands. Additionally, he is the founder and CEO of Proem Asset Management, an investment firm that focuses on the technology space.
Verishop helps small businesses to get more distribution and to be able to tell their own story through Verishop. They currently represent over 3000 companies and 5000 brands! They are independent emerging brands with revenues from $1m per year to over $50m per year. They are companies that build great product and have the ability to thrive via Verishop. Verishop also curates tech partners for these small brands, giving them enhanced buying power.
They have tried some new ideas around returns, offering a discounted price if you DON’T return it. 20% of the shoppers said yes. Their whole concept is built around livestreaming, shoppable videos and the customers post-purchase experience must be great to continue on the site. A new brand can be on Verishop in 30 minutes or less! Verishop tracks every purchase. The use of livestreaming and mini-clips have netted them with 3-4X higher conversion rates. They have created an ecosystem where everyone can thrive. Check it out on your own. I’m sure you will be impressed.
Keynote #3: Sumit Singh, CEO of CHEWY, interviewed by Phil Wahba at Fortune. A very interesting guy for sure, speaking about a company many of you probably use. Chewy went public in 2019. They are now doing $10 billion in sales and making a nice profit. Much of their growth came from the “Pandemic Puppy Boom”. During the pandemic, with nothing to do and lots of sad people, many went out and bought a pet. They are called by Chewy “Pet Parents”.
Ninety million households in the US have pets. Chewy offers personalized service in a very emotive category. They feel they are recession resistant. Their newest growth spurt they feel will come from humanization of pets, or in other words, health and longevity for your pet. For example, instead of dry tasteless kibble, pets will be eating fresh and frozen foods, just like humans do. Their business is 70% auto-order and they have a 25% market share in the pet category. They believe and I think have proven that surprise and delight mechanisms create loyalty. They know your pet’s name and your pet’s birthday.
The pet business in the US is a $120 billion business. Of that $120B, $40 billion is in pet health. There really is no affordable pet health care out there, and there are not enough veterinarians out there. Chewy has been looking to change all that with Pet Tel-a-health. They put a test of this into action in a mere 90 days during the pandemic. Think about your options when your pet eats a whole bag of peanut M&M’s on a Saturday night. Is your vet around? Can you afford a pet hospital? Chewy has the answer where you can call in the problem and have a vet fix your problem at that moment, 24/7. This is value-added for Chewy.
Pet purchases are planned, predictable, and consistent. This is also a competitive advantage. Then add in pet insurance at affordable rates and the money keeps coming into Chewy. Less than 3% of households in the US have pet insurance. Compare this to the UK where 20-30% of households have pet insurance. They might be early on in this journey but I believe they are certainly on the right track. Their culture at Chewy is one of “WOW”. It is an 11-year-old company with 25,000 team members and 15 distribution centers. Customer centricity is key along with focus and discipline.
Keynote #4: Dave Kimbell, CEO Ulta – This presentation was titled the “Re-emergence of physical retail”. Their sales have been very strong and they are gaining market share. They see 2-3000 new brands every season and only end up purchasing from 5% of them. Their competitive advantage is that they cover all price points, from “masstige to prestige”. The category has been resilient and the definition of beauty has greatly expanded towards WELLNESS. Ulta has 1355 stores and an additional 350 mini-stores inside of Target stores. They have invested heavily in AI. They believe in personalization, loyalty and innovation. The trends in beauty are currently on both sides of the spectrum: big, bold looks and more natural looks.
As the nation’s largest beauty retailer, Ulta Beauty brings to life the possibilities that lie within each person. To be the most loved beauty destination and most admired retailer and employer, Dave leads with creativity, data and guest-centricity, driving strategic growth, progressive innovation and memorable experiences. Dave became the CEO after serving in executive roles with the company since February 2014. In his role he leads the company and its 40,000 associates through the lens of inclusivity and deeply values the perspectives of his diverse team.
Keynote #5: Joanne Crevoiserat, CEO of Tapestry, Inc., a New York-based house of modern luxury lifestyle brands including Coach, Kate Spade, and Stuart Weitzman. The company is 90% direct-to-consumer and runs on a balance of magic and agility, with a focus on innovation. They see trends as they happen. Currently leaning from comfort and casual to more social occasion as the pandemic ends. They develop products that last and are versatile. They strive to elevate their brands and do very little promote. They develop emotional connections with their customers which leads to higher LTV (life time value). They believe their brands must be authentic and self-expression needs to be supported. They utilize social influencers, celebrities, sports stars, etc. to push their brands. They believe though that their associates are their biggest advocates.
They do not think their store business is dead as customers are still longing for great experiences. These experiences must be consistent and seamless. In stores you can touch and feel the products. Direct-to-consumer vs. 3rd party retailers gives them great data with which to make future decisions. They appeal to a middle-class customer. China is very big for their business. Their brands are consistent over different countries but they make slight changes to products as needed based on particular country needs. Joanne’s advice to those of us in the audience was “brands have to work hard to stay relevant.”
Keynote #6: Jeffrey Katzenberg, Co-Founder and Former CEO, DreamWorks Animation and Founder & Managing Partner, WndrCo
WndrCo is a company that invests in companies in cyberspace. He sold DreamWorks. Jeffrey spoke about the fact that Artificial Intelligence (AI) is EVERYTHING! He said “We looked at the opportunities around AI and are genuinely excited about it…I think that everybody agrees that this may actually be the next defining moment in our tech evolution-and with that comes incredible promise. The unbridled enthusiasm we’re hearing about today is generative AI, and all of its applications around creativity, storytelling, and art.”
But what Katzenberg is really interested in is a safer, more consumer-friendly version of AI called “sanctioned AI,” which can only learn from text approved by the company AI serves.
“What sanctioned AI means is that you get to leverage all the great things that generative AI brings to the table, but in a fail-safe environment” said Puneet Mehta, founder and CEO of Netomi, an AI focused customer service platform Katzenberg has a stake in. We need to be clear about what role AI plays. Is it auto-pilot, where it helps consumers autonomously? Or is it a co-pilot helping an employee?
The best interactions between consumers and AI can and should be as good for the brand as a person-to-person interaction.
Katzenberg’s motto has always been to “exceed expectations”, expectations of your customers, your people, and every part of your life. Quality customer engagement is not only essential, it may be existential to your brand. Whether you are a travel company, retailer, or operating through e-commerce, every business today is relying more and more on this type of engagement.
Keynote #7: Foot Locker President and CEO, Mary Dillon, interviewed by Sheena Butler-Young, Senior Correspondent of The Business of Fashion.
“We are a Sneaker Culture”. Their mission is to reach global economies of scale. They call their best customers “Sneakerheads” who have a sneaker wardrobe. Mary has worked for customer-focused companies throughout her career, most recently as CEO of Ulta. She prides herself on respecting the opinion of her store teams they call “stripers” due to their referee style uniforms. They are the only retailer in the Top 10 of sneaker brands. Their philosophy is to “have some fun”. She surrounds herself with great teams which is her secret weapon.
They have functional expertise combined with enterprise thinking and collaboration skills. They hope to unlock the sneakerhead in all of us. They are in the process of re-launching the brand in 2700 stores all around the world.
Their Nike partnership has been renewed and revitalized. They have an evolving portfolio of stores, more off-mall stores that can hold bigger selections. Their off-mall stores represent over 50% penetration. They used to be totally product-led during their 50+ years in business, and are now consumer-led. E-commerce represents a 16% penetration which is low hanging fruit, a big opportunity. They need to invest more in technology, 2023 is their re-set year. They will relaunch their loyalty program. They will close approx 400 low-performing stores and open some bigger concept stores. Mary talked about their biggest opportunity: re-launching the brand. Her biggest issues? The economy and inflation.
Individual Sessions:
New Applications of AI and Machine Learning: by Patrick Duroseau, VP, Enterprise Data Management, Under Armour.
Patrick feels that ChatGPT is both revolutionary and overhyped. AI is good to solve: data management and data analytics. Be aware however that AI has bias. The biggest biases occur if sample sizes are too small. Don’t rush into this due to bias. Sometimes it is either not appropriate or can even be offensive.
The area most in need of of improvement through AI is the supply chain. 3PL’s are antiquated. Sustainability is huge in supply chain and ties into ESG missions that everyone has. Is it the art of what’s possible? Technology is a tool. Embrace it, and don’t be afraid of it. It will optimize anything you are doing. Think about this: back in the day, calculators were protested! It took a change of mindset to get past that fear and protesting. Make it work for you! So, yes, ChatGPT is revolutionary.
Building Resilience into Global Supply Chains: by James Furlong, VP, Supply Chain Management & Projects, PUMA. He was interviewed by Edward Hertzman, Founder and President, Sourcing Journal.
This presentation covered supply chain issues such as optimizing the FIRST mile vs only the LAST mile. Utilize AI technology and automation. Use the smallest boxes possible to not ship “air” at higher costs. Minimize all costs to ship through more density. They discussed sustainability at Amazon through packaging improvements, and cutting single-use plastics in the supply chain. Automation and robotics do not necessarily mean cutting jobs. You must teach employees new systems. Puma calls it “Megatronics”. The issue James would most love to solve is the density of the last mile and the issue of seasonality in supply chain.
James spoke about predictive analytics which is really just a fancy word for “what if scenarios” which tell you where the demand is coming from regionally for distribution centers. He believes execution is lacking however and real time decision execution is key. FIFO (first in last out) is a dinosaur and now irrelevant. Focus on the supply where it happens to be at. There is complexity at every step. Dig into the details and clearly communicate to customers and retailers. Much of this is now automated and used by data scientists. He added that “money is made or lost on supply chain”. In the past, supply chain has been strictly a cut-costs issue. Now more of a growth issue. Your supply chain can be a competitive analysis and can dramatically affect your P & L.
Organizational design often gets overlooked in supply chain so companies need to re-look at roles, jobs, etc. of reporting and analytic functions that integrate with supply chain. Diversity of teams needs to be seriously looked at and acted upon. Need to mix in innovators with supply chain experts. And it goes without saying that you must have very strong relationships with factory suppliers to survive. The personal element is critical.
Facilitating Product Discovery Online and In Stores: by Christiane Pendarvis, Co-President & Chief Merchant, Savage X Fenty, and Fiona Tan, Chief Technology Officer of Wayfair, interviewed by Anne Mezzenga, Co-CEO Omni Talk.
Fiona talked about how Wayfair helps customers find products online and in stores. They are a 3rd party company so they don’t own the inventory. There were a few big companies at the conference that do this. They curate but don’t own inventory. They connect to the “endless aisle”.
For those of you in the intimates business, I am sure you have heard about Savage X Fenty by Rihanna. They have 7 stores at present. She told us that bras are the most important part of the business and that the fitting room is key. They call it the “Fit Experience”. It was probably the coolest fitting room I have seen. They do a 3-D body scan of the customer (no tape measures) that map back to the product catalog. It recommends to the customer the exact size and exact products that will fit them best.
Some snapshots of the “Fit Experience” to give an idea:
They also greatly utilize influencers and micro-influencers. Their system was built in house with the tech team at Textile. They analyzed who they were getting ROI with and found it was the influencers that delivered the highest ROI. Savage X Fenty has an “EXTRA VIP MEMBERSHIP” which is a high level of commitment by the consumer whereby they get special perks and benefits, exclusive promos and products. It is a strong loyalty driver for their 12 collections per year. Savage X Fenty celebrates fearlessness, confidence, and inclusivity. They want you to feel sexy and have fun doing it! If you want to see the stores in person, which I highly suggest, you can find them at Fashion Show Mall in Las Vegas, Houston Galleria, Culver City Mall, King of Prussia, Pa, Fashion Centre at Pentagon City, Roosevelt Field Mall, and Lenox Square in Atlanta.
Savage X Fenty is an accessories company that offers underwear, and other fashion clothes for women. In partnership with a team assembled from the industry’s elite, the label has disrupted and redefined the marketplace with its accessible price points and extensive assortment of lingerie. The company was founded by Robyn Rihanna Fenty, a music and fashion icon. YouTube has many videos of recent fashion shows by Savage X Fenty.
Agile Merchandising Strategies: by Anu Narayanan, President of Anthropologie, and she was interviewed by Hitha Herzog, Chief Research Officer H Squared Research.
Anthropologie is a lifestyle brand where everything starts with the customer. To prove this point, Anu talked about their “Getaway Shop” which is for customers to shop for vacation clothes online and in stores. This was extremely successful. They also do many shops with a party environment in order to better connect with the customer in a full 360-degree experiential environment. The shops/stores are unique with a real sense of discovery. In store they have experienced stylists and creative displays made out of mostly ordinary materials which they can then bring to social media. They have a great in-house creative team for online who brings the vibe of the store to the web.
Anthro’s data strategy is a perfect balance of art and science. Personalization, another key strategy is easy in digital but difficult in stores. They leverage DTC data and create store profile customers.
Their brands are market brands, private label brands, and independent brands. They want all 3 to grow. They believe strongly in small up-and-coming brands. A good example of this is the Farm Rio brand. They help these small brands through data. It is a 2-way street. Anthro was the first to partner with Farm Rio. Farm Rio is made up of a group of creatives from Rio de Janeiro, Brazil, that believe in the existence of happiness. More than a brand, Farm Rio has created enlightened cultural movements since 1997. They believe in all colors and shapes, local culture, and powerful product. Every purchase equals one tree planted. Anu and her team immediately saw the value in this amazing product story and have been very successful with this and other small independent brands they have discovered.
Though distinct in style and spirit, Anthropologie is part of URBN, a portfolio of global consumer brands. There are 208 Anthropologie retail stores in the U.S. The state with the greatest number of locations is California, with 34 retail stores.
When asked how does technology help them stock all the skus they have, Anu replied “Tech is our friend. It helps with speed, efficiency, and profitability.” They also do a lot of style testing which allows them to be faster to market with the correct product. They also take a seasonless approach to the business.
Anu is also in charge of the wedding business at Anthro. It is a very interesting business as they do not own any stock. They take orders since brides choose their dresses in advance. This is a major advantage to them, and a profitable one! Anu was a terrific speaker with a contagious enthusiastic personality.
Navigating Brand Purpose, Politics, and Activism: by Susan Viscon, VP & Executive Director, Path Ahead Ventures, REI and Becca Dittrich, VP of Impact at Chobani, and Sali Christeson, Founder and CEO of Argent. They were interviewed by Randi Nolan, Partner, The Parker Avery Group.
This was a very important and timely presentation with 3 great presenters. Randi Nolan told us 66% of consumers consider a company’s purpose when making purchase decisions. Companies that lead with purpose make good business sense.
Argent is a women’s workwear label online and in stores. They started with a pain point of what to wear to work, an overlooked category. Their mission is to equip women for their “seat at the table” and to inspire the next generation of creators.
REI had a goal in 2020 to push racial equality. They do $4 billion in receipts each year and try to do more with founders of color. 1% of company founders are people of color although 30% of customers are people of color.
At Chobani, Becca said the “best thing Chobani makes is a difference.” She discussed how to measure results of their initiatives by prioritizing IMPACT. Their purpose is a recruitment and a retention tool. A company must be authentic in order to pull this off. Chobani “does well by doing good”. They believe in helping refugees who become their best employees. When asked how they prioritize their initiatives, Becca said 1) look at what we are good at, and 2) where can we move the needle.
At REI they have a $30 million fund called “Path Ahead” where they work with 1200 brands. They push their agenda on them, educate them and help with timelines.
At Argent they launched a campaign in 2016 called “Voting Suits You”, a play on words to get women out to vote. It was so successful they relaunched this campaign in 2020. They strongly believe in and push women’s rights through career development for women and by giving them confidence through what they are wearing. They offer workshops for women and networking opportunities.
Becca at Chobani talked about their biggest issues which are food insecurity and child hunger. They have a program called FAAR which stands for Food, Access, and Reach. They pay off school lunch debts from kids who cannot pay for food. They inspire other businesses to do the same. They are so very authentic. Their programs to help make the world a better place are incredible. She feels that successful impact is based on partnership: of money, product and time, leveraged to work together.
Susan at REI finished up by explaining their collaboration with industry leaders for bigger impact. They developed the Sustainable Apparel Coalition which lays out requirements and action. There is power in numbers!
There were so many more excellent presentations, more than I can explain in this article. Suffice it to say that retail is not dead. Brick-and-mortar stores are not dead. Innovation and technology are very much alive and there was no shortage at this convention of brilliant minds and great ideas. The customer is still king and sustainability was on everyone’s minds.
Here are the two snapshots from the Navigating Brand Purpose of Parker Avery about the companies they consult.
And also about the consumers want more business involvement on societal issues on a 6 to 1 ratio.
If you have any questions for me, please reach out to my email at terri@iappareljournal.com, I’d love to hear what’s on your minds.
In this case, what happens in Vegas does NOT stay in Vegas!
Warm regards,
Terri Fisher
Retail Correspondent