More than 8,000 people attended ShopTalk in Las Vegas last week to discuss how changing trends, technologies and business models will shape the future of retail.
The show featured more than 100 sessions and 300 speakers with topics broadly culled from a list of 75 ways retail would change in the next decade, prepared by Zia Daniell Wigder, chief global content officer for ShopTalk. As relayed in the following slideshow, a key theme for food retail was preparing their organizations and their shoppers for many of those changes ahead.
See additional coverage from ShopTalk on the race to robotic pick centers; early results of Kroger’s experiment with autonomous delivery; and on Albertsons CEO's reflections on its role in the digital landscape.
Loyalty Through Execution
David Hardiman-Evans, SVP of North America for Ocado Solutions, plainly laid out the challenges to taking the grocery business online—and the need to pursue the most efficient solutions. The company’s massive robotic grocery warehouses will roll out in partnership with Kroger.
“Satisfying customers is hard,” he said. “You want your fresh food fresh. You want to shop a large assortment. You want all the items you pick delivered: You can’t order 50 items and get 45, and you certainly don’t want to miss the critical items for your dinner that night. You don’t want substitutions or out-of-stocks, and you want competitive prices. All of this means additional expense.”
Hardiman-Evans said Ocado has historically built shopper loyalty not through marketing but through execution. “We believe the best form of marketing is to constantly deliver on our promises to our customer and constantly being improving the customer proposition," he said.
Demand for fast delivery is extending to all categories of commerce, said Chris Bell, head of supply chain for the online home furnishings retailer Wayfair. According to Bell, 70% of customers buying couches online will take the first available delivery slot.
An Autonomous Ecosystem
A Friendlier FedEx
Brie Carere, EVP and chief marketing officer for FedEx, discussed how the company is standing out in a suddenly crowded delivery field in part by putting a friendlier face on its offering, including a new campaign built around the emotion of receiving the things delivered and not on the delivery itself. FedEx is also getting into robotics with the SameDay Bot, an urban delivery robot that will work with retailers and restaurants on efficient last-mile fulfillment.
AI for Pricing
Artificial intelligence and machine learning can be a valuable ally in setting prices and promotions, potentially producing “radically better results” than traditional price-regression approaches, said David Moran, co-founder and chairman of Eversight. He suggested retailers could use their own judgement when pricing the items that matter most, “but the routine decisions, a nickel here and there that are incrementally better for your system but are too hard to process? That, a computer should run.”
A Hand for Robotics
Robotic hands that can pick things up and put them down are not only cool but represent solutions to logistical and cost concerns plaguing traditional e-commerce warehouses, said Yaro Tenzer of RightHand Robotics. The technology can lead to lower costs through “lights-out” fulfillment and resulting impact on warehouse design while also supporting customer service by preparing orders faster and handling revisions and “gift with purchase” items without accompanying costs.
Knockoffs to Knockouts
Gil Phipps, VP of branding, marketing and our brands for Kroger Co., traced the evolution of private label in grocery, moving from “knockoffs to knockouts.”
“We treat our brands like brands, and our customers view them as brands,” he said. Millennial shoppers are increasingly influenced to buy products with the right message around social responsibility, he added, which has been a boon to brands such as Simple Truth.
In It Together
In the next three to four years, one of every five grocery transactions will happen online, said Nilam Garenthiran, chief customer officer of Instacart. Garenthiran urged an end to the debate of whether Instacart was a friend or foe of grocers, saying that growth indicates they need to work together to drive impulse purchases, build bigger baskets and improve margins.
“The one thing that Instacart tries to bring to the table differently vs. a grocery is deep engineering technology and data science experience which we can then marry with what grocers know really well, which is merchandising and operations,” he said.
In a general-session interview, Pinterest founder and CEO Ben Silbermann discussed the phenomenon of the online interest board and its relationship to retail, saying retailers could “bridge the gap” between the best-in-class recommendations on the site and trips to their stores. “That’s the thing that separates commerce–which is efficient, safe and reliable—with shopping, which is inspiring and emotional.”
The Value of Listening
Marvin Ellison, CEO of home improvement chain Lowe’s, said he learned to be successful in business by “learning to be myself.” His first order of business at Lowe’s was giving out his email address to all employees so he could gauge what they needed to be successful. “My mother told me I had two ears and one mouth for a reason.”
Ethics in the Tech Age
While it is vital that retailers utilize technology to understand the customer journey today, it is just as important that customers and employees also understand the benefits of doing that, said Frans Muller, CEO of Ahold Delhaize, in a general-session address.
“There are many people who find technology scary, who couldn’t understand algorithms, data privacy and what technology can do for us,” Muller said. “This is a true concern. If we are not able to take people with us … I think we’ll have great problems. … It’s a threat for the retail and technology industries.”
In its native Netherlands, Ahold Delhaize is already supporting public training for AI as part of an overt move behind ethics and sustainability that will support its growth in retail, Muller said.
The Customer Journey Online
Daniel Alegre, president of retail shopping and payments for Google, discussed how the search giant was bringing the customer journey into focus. He introduced a program of “shoppable ads” to Google Images, noting that 50% of online shoppers are inspired to buy by pictures.
“If you want to be an innovative organization and a growth organization, you have to lead the organization that way, and that’s why you’ve seen so much change at Ahold Delhaize in the past few years,” said JJ Fleeman, the retailer’s chief information officer. “But it takes time. You bump your head sometimes.”
Fleeman discussed how the newly formed Peapod Digital Labs will provide a central technology platform that also allows different brands to bring their unique customer value propositions to life.
Spreading the Word
Narayan Iyengar, SVP of digital and e-commerce for Albertsons Cos., also remarked on the challenges of imparting digital competency in a legacy organization. You have to be an evangelist but at the same time avoid “shoving it down their throats.” He said “shuffling decks” of tech and non-tech people in various departments has been effective.