7 Takeaways from Shoptalk

This week I attended my second Shoptalk conference in Las Vegas. It was the fourth installment of the “show” that brings together the leaders of the retail and e-commerce industry. After last year’s event, I predicted that the conference would begin to include more presenters and participants who serve as “commerce enablers” that provide the front-end (retailers and brands) the infrastructure to execute a streamlined omnichannel consumer experience.

And I was right! (Excuse me as a take a quick victory lap). In 2018, I had to search for carefully to connect with startups focused on supply chain/logistics and Industrial IoT, however this year there was a healthy representation of B2B startups. I met with over 10 companies in 3 days at the conference and identified another 7 or so that are addressing infrastructure use cases for large retailers or d2c brands. With this shift, the conference felt a little different from last year but remained a melting pot of decision makers from various groups in the ecosystem. Below are my 7 takeaways and common themes that emerged from my conversations with startup founders, chats with investors and attending panels.

1. Online and offline continues to collide.

Leaders of e-commerce and traditional retail companies all spoke about the convergence of the physical and digital worlds. A common theme was that retailers are still building internally or partnering with technology companies to provide each customer with a seamless user experience, where information leveraged from the e-commerce platform can increase the utility of the physical store experience and vice-versa. Digitally native brands are opening brick and mortar stores, which are now seen as a profitable distribution channel that creates lift for the surrounding location and allows for new customers to experience the brand.

2. These aren’t your Grandparent’s brands.

Venture investors and founders of digitally native brands agree that we are at an interesting point for emergent brands. The past 10 years, d2c brands leverage the mobile platforms of Facebook/Instagram to target and acquire customers but the social media platform is shifting its advertising services and online acquisition costs are increasing. There are questions in the industry about what the next platform for retail will be (AR/VR, voice, etc.), which forces emerging brands to find new channels to acquire customers — such as physical retail locations, partnerships with unlikely locations to do pop-up shops, and finding new marketplaces or social media platforms to engage with micro-communities.

3. Last mile is causing lasting changes in retail operations.

Retailers understand that their customer base expects their goods to be shipped quickly with same-day and one-day shipping, so many are testing new technology and business models that can meet this new consumer preference while exhibiting solid unit economics. Walmart and FedEx both presented autonomous vehicles (both car and rover machines) that eliminate that cost of human labor while providing the convenience of on-demanding delivery. Other retailers, like Lowe’s and Walmart, have launched same-day store pickup for online orders, which leverages the shopper to become their own delivery service. Companies with large brick and mortar footprints can use their physical store locations as micro fulfillment centers that service instore and online purchases. The mention of micro-fulfillment centers was of plenty, with retailers stressing a desire to get their product close to the consumers that want it. There were no shortage last mile delivery tech companies, like Roadie and Dropoff, that are utilizing technology and the gig economy to service retailers same-day delivery demand. I found a new sub-sector of last mile startups like Delivery Solutions and Shipsi that strive to be the middleware platform that retailers use to optimize which delivery service to use in a specific city, region, or country.

4. Missing in action.

This year there was a significant absence of frontier tech and newer digitally native brands presenting at the conference. This year I do not recall seeing any blockchain solutions or any drone delivery solutions (except for Flytrex). It also seemed to be less digitally native brands presenting on the conference floor, being replaced with more b2b commerce enablers solving targeted marketing, inventory management, shipping, and fulfillment use cases. Also, I was surprised not to see or hear more retailers mention the use of technology to enhance/address labor constraints or returns (reverse logistics). I’m confident both are issues within the stocking and fulfillment operations of retailers e-commerce business but it seemed to be treated as a problem that can be addressed in the future.

5. Investing in the future of grocery.

Grocery has the lowest e-commerce penetration but is becoming more and more of a target area for retailers to gain market share and invest in innovation. Clearly, the organizers of Shoptalk have seen the interest of grocery increase with their launch of Grocery Shop last year. A number of larger retailers spoke about testing frontier robotics solutions for the fulfillment of online grocery orders. There were also interesting startups such as CommonSense Robotics and Takeoff Technologies that had displays on how their robotics solution improves the efficiency of the operations associated with grocery fulfillment.

6. Shoptalk’s new tone.

If Shoptalk was going through its “startup” stage in its first 3 years, the 2019 edition signified a distinct shift to a “growth” stage event. I noticed it a bit, but talking to founders and investors that have attended this conference for three or four years, they felt the conference felt more like NRF in the sense that the presentations were more focused on pitches of new services and less on the concerns or challenges in this new age of retail. There was also a considerable increase in the dreaded “v” word…vendors. Despite the surface level shift, the conference still displayed it’s uncanny ability to mobilize an impressive amount of decision-makers from the world of retail, e-commerce, logistics, and venture capital. I felt I was able to get a great idea of the pulse of retail from my scheduled and serendipitous conversations.

7. Did you think I wouldn’t mention Amazon?

Amazon was a focus of many of the conference participants and subject mentioned during many of the panels. The e-commerce giant has become a stronger force over the past 12 months as a marketplace and many believe that he company will continue to grow its already 50% marketshare. However, the sense that I got from my conversations with participants at the conference was that retailers need to better understand how to compete in this “Amazon” world — which opens up more opportunities for logistics tech startups — while emerging brands should learn how to carefully collaborate with Amazon, given the large e-commerce company has not succeeded in every retail category.