Shoptalk: Despite Challenges, the Future of Retail is Ripe With Opportunities for Marketers
In March, over 5,000 professionals from retailers, brands, startups, tech companies, investors, and media came together in Las Vegas for Shoptalk, the industry’s largest retail and e-commerce event. The big question on everyone’s minds was: how are modern consumers shopping, discovering, and buying, and how is emerging technology impacting that evolution?
This conversation takes on new importance as retailers continue to face big challenges including increased online competition, lower in-store traffic, and declining sales — all of which has forced retailers such as Macy’s and JCPenney (among others) to shutter stores in the last year.
As an agency that works with retail and e-commerce clients, Walrus was at Shoptalk to explore how marketing and media can both impact the transforming business of retail.
Here are three takeaways from Shoptalk for marketers focused on retail.
1. Brick-and-mortar stores cannot win the ‘convenience battle’ against online shopping; in order to stay relevant, they need to create exceptional, authentic experiences for consumers.
The retail industry is still adjusting to a shopper mindset shift that Marshall Cohen, Chief Industry Analyst at The NPD Group, labeled “pre-Recession aspirational” to “post-Recession experiential.” In an environment where “Millennials would rather build memories than build wardrobes,” how can retailers win?
According to numerous experts at Shoptalk, traditional retailers with physical stores cannot compete with the convenience and ease of online shopping. They have to go above and beyond that in order to stay relevant and appeal to next generation shoppers who crave authentic experiences they can capture on social media to make their life appear well-curated and well-lived. Retail marketers should think beyond the typical customer-brand interaction and provide new opportunities for customers to have an experience with their brand that they can’t find anywhere else.
A wave of brands has been experimenting with this. Numerous hotels have started providing unique experiences such as live concerts and cooking classes for traveling guests and locals in the area to enjoy. In retail, some Urban Outfitters stores have installed cafes and sell vinyl records, which creates a curated, bespoke environment that aligns with the brand’s DNA and appeals to their target. The Millennial desire for authentic experiences is also why Airbnb recently added an Experiences vertical, making the platform about more than just where travelers stay at a given destination, but also what they see and do while there.
2. Retailers must be precise and utilitarian in their approach to emerging tech.
As retailers grapple with understanding emerging tech and how to incorporate it into their strategies, everyone at Shoptalk agreed that the industry doesn’t need more technology — it needs useful technology.
One of the best examples of a retailer taking a smart approach to new tech is Sephora. Mary Beth Laughton, Sephora’s head of digital, shared a number of ways in which they have been leveraging technology to enhance the in-store experience for customers. The beauty retailer rolled out an artificial-intelligence-based app that helps consumers find specific color shades by simply uploading a photo. The platform, which uses facial analysis and visualization technology, also recommends actual products in Sephora’s inventory and uses augmented reality to provide a visualization of the user’s photo wearing the Sephora product — giving them an idea of how the product will look without having to rely on the consumer’s imagination.
Another example is Aldo. Mohan Ramaswamy of Work & Co described how the shoe retailer doubled its sales lift by honing in on mobile technology to amplify the best thing about shopping in a store — human interaction. They created an in-store employee app that allows customers to browse different looks and see associated products, providing inspiration for what to wear with Aldo’s products. Once a customer finds something they like, they can request to try it on via the app, which notifies in-store sales staff via a push notification. Staff can then help them, while another member — known as a runner — can find the product in the stockroom. By bridging the online with the offline, Sephora successfully created an improved in-store experience.
3. Data can be a retail marketer’s best friend, but the insights gleaned from data are infinitely more important than data itself.
“The most powerful asset any marketer has is data.” — Tami Mohney, CMO, Modell’s Sporting Goods
Just like technology, it’s not about how much data a marketer has; it’s about making the best use of the best data. Sometimes the best data exists right under your nose. Sporting goods retailer Modell’s, for example, examines customers’ purchase history to segment them into various groups for customized CRM outreach.
Target, on the other hand, went a step further and forged a data-driven collaboration with style site Who What Wear, an online destination for fashion content to inform product design.
They looked at what users had searched within Who What Wear’s search bar in the site’s entire history, and used that data to inform a new apparel and accessories line at Target. It catered specifically to the trends Who What Wear users loved. For instance, after noticing that Who What Wear had converted sales for 100 different versions of pre-knotted belts from a variety of retailers, Who What Wear incorporated its own take on the pre-knotted belt in its Target line. Not only did it become one of Target’s most successful apparel lines ever, but it also allowed Who What Wear to integrate data, commerce, and content in a way that drove business results.
These examples demonstrate that data is simply a starting point, not a means to an end. The insights gleaned from data are infinitely more important than the data itself.
Despite doom-and-gloom headlines about the future of retail, Shoptalk was evidence that a spirit of innovation and excitement is alive and well in the industry. The brands that can harness emerging technology and data to craft appealing experiences that build stronger connections with consumers will be the ones that win in the future.