I’ve already had many meetings at Shoptalk but there’s one which I wanted to share before getting into today’s roundup. It was with the CEO of UK startup Nibble. It was fascinating listening to Rosie Bailey and CMO Will Gardiner talk about the business because what sets Nibble apart is that they can solve the promotion versus customer price expectation gap by using an AI powered chatbot to allow customer negotiation on an individual basis. Don’t like those trainers knocked down by 35%? No problem, how does 50% sound? Good – done deal. Just think of the potential for customer experience, inventory, margin to name a few. I wish them every success.
I’ll start today’s roundup with a question: what is different but also the same? Answer: global retail. How do I know that? Because today I took in much of the content from the ‘Retail Innovation from Around the World’ track. And of course if you drill down (or as they say here in Vegas ‘lean in’) sufficiently, there will no doubt be differences, sometimes quite significant, but generally and at a more macro level, retail around the globe is very similar.
Hearing from the likes of McKinsey and Deloitte is always a worthwhile use of anyone’s time, let’s face it, they’ve done the legwork and conducted the research, yes of course as consumers we tend to give the answers we think the interviewer wants to hear, but much can be taken from their insights.
Pockets of Spending
There’s no doubt (from the McKinsey research) that globally, all markets have been affected by Covid-19, war in Ukraine, inflation, cost-of-living crisis and the consequential shift in consumer behaviour. In the global fashion market, McKinsey shared some interesting findings.
Some of the top trends they found included global fragility, regional reality, two track spending, fluid fashion and formal wear revived. But here’s the thing, and this is why retail is so challenging to navigate: according to McKinsey, consumers are increasingly trading down, including nearly 90% of Gen Z and Millennials. However they still intend to splurge and treat themselves every so often. They referred to it as ‘pockets of spending’. And it’s those that retailers (in this scenario, fashion retailers) need to try to identify.
For me, this underlines the fact that traditional retail KPIs are hopelessly outdated and hinder businesses trying to drive growth. Because if you accept the findings, surely the most important metric today is, “how is my customer feeling?” And to answer that question, retailers need to turn to social media and identify the intent data that they would undoubtedly discover.
Global Differences, Global Similarities
Innovation is all around us, from Mexico to the US to Europe to the UAE and of course if one travels further East. It’s often said that to see what retail in Europe and the UK will look like in three years time, simply jump on a plane bound for Tokyo or Shanghai. But that doesn’t necessarily always hold true. In places such as China the market for video live streaming is huge – in the trillions of dollars, but in the UK and US it doesn’t show the same signs of adoption.
Mexican retailer Liverpool have an interesting take on innovation – they encourage their 75,000 workforce to fulfill the final mile and earn extra money in doing so. Why pay a third party courier when you can do it yourself? And Belgian AB InBev – the world’s largest brewer, can now deliver cold beer to your door in thirty minutes. Now that’s innovation I like. According to them, across Europe there are more home bars than there are bars. See what the pandemic did?
A CEO Speaks
It’s generally a truth (although by no means guaranteed) that the more senior you become, the more personable (yes I could name the exceptions too) and this was demonstrated by three great retail CEO interviews. The first was with Dave Kimbell, CEO of Ulta Beauty, the second with Chip Bergh, CEO of Levi Strauss and the third with Joanne Crevoiserat.
Having been a retailer in the health and beauty business myself, I was especially interested to hear what Dave had to say. During lockdown in the pandemic, Ulta’s customers continued to purchase fragrance, it’s just that they were wearing it for their own wellness instead of for someone else.
And discussing Ulta’s previously store-only shoppers, Kimbell revealed that once they persuade them to also shop online, sales increase 2.5 times.
Meanwhile Chip described how he went about revitalising Levi Strauss when he joined twelve years ago and it came down to three things: returning the brand to the centre of culture, connecting with youth and diversifying from the core (men’s jeans) business. The punchline however was when he was asked what makes the brand so enduring: one foot rooted in history and tradition whilst the other in innovation. Bring to mind a particular UK retailer?
And then, over the lunch break, I witnessed one of the most amazing sights I think I’ve ever seen, not just at a retail conference, but ever. It was the Shoptalk meet-up – speed dating on steroids if you will. There were people literally as far as the eye could see. Possibly only in Vegas.
And rounding off the series of CEO speaks, was Tapestry CEO Joanne Crevoiserat who discussed the emotional engagement which brands need to drive in order to truly connect with their customers. Not only that but something she said resonated, “We’re working hard to make the customer experience consistent and seamless”.
And she echoed the findings from McKinsey earlier in the day when she described the resilience of the consumer:
And my day attending keynotes and sessions was nicely rounded off by the deliciously indiscrete former chairman of Disney and co-founder of Dreamworks, Jeffrey Katzenberg when asked about AI and especially one of the key themes of the conference so far, generative AI, “for brands you cannot run the risk of allowing generative AI to say the wrong thing”. He sure leaned into that one.
And still no mention of the ‘M’ word, something which we couldn’t get away from this time last year. Can you guess what it is? Answers on a postcard, all will be revealed in the day four roundup.