Top 10 Predictions for Retail in 2024 with Ben Miller, ShopTalk

[00:00:00] This episode was intended to be published about a month ago when we recorded it.

[00:00:05] Life has a way of changing your plans sometimes.

[00:00:09] Just after we recorded, my father went into the hospital and his condition worsened.

[00:00:13] Until unfortunately he passed away shortly thereafter.

[00:00:17] Since then I have been taking time off with family.

[00:00:21] My father was a source of inspiration in our family always urging us to reach further,

[00:00:25] go farther, and do more.

[00:00:27] In our lives, it's something we hope is true with this podcast too.

[00:00:30] Especially this episode or Casey and I are grateful to be joined by ShopTalk, VP of Content,

[00:00:36] Ben Miller, to share our top predictions for retail in 2024.

[00:00:40] If you're at ShopTalk this week and the 10 sessions or have hallway conversations that

[00:00:45] touch on any of these topics as we expect that you will, let us know.

[00:00:49] We love your feedback.

[00:00:51] And so this episode and the season, with full heart where we will dive deeper into AI,

[00:00:58] retomedia and the human side of retail.

[00:01:01] And hopefully help you, our audience reach further and go farther in your retail business.

[00:01:07] This episode and season are dedicated to my dad.

[00:01:10] I hope you're listening and enjoy.

[00:01:13] This one's for you.

[00:01:41] Hello and welcome to the first episode of season four of The Retail Razor Show.

[00:01:46] I'm your host, Ricardo Belmar.

[00:01:48] And I'm your co-host, Casey Golden.

[00:01:50] Welcome to Retail's favorite podcast where we cut through the clutter to give you sharp

[00:01:54] insights on the retail industry and commerce technology.

[00:01:58] It's the show for product junkies, supply chain technologists, and everyone else in retail

[00:02:02] and retail tech alike.

[00:02:04] Case here are you excited?

[00:02:05] I'm excited it's the start of a new season.

[00:02:07] Very excited to see what's in store for us.

[00:02:10] Pun intended.

[00:02:11] I don't know if I can top that one.

[00:02:13] So how about I just kick us off here and get started with this episode?

[00:02:16] Go for it, Ricardo.

[00:02:17] It has been our tradition now for two years to kick off the calendar year with our thoughts

[00:02:22] on predictions for the retail industry.

[00:02:25] This would be our third time doing that.

[00:02:27] And well some listeners may think we're a bit late in the year now to be doing this.

[00:02:31] I mean, yeah, I know it's February but we have a good reason for this.

[00:02:35] Yes.

[00:02:36] January is for strategy, not executing.

[00:02:38] Not only are we going to share our predictions, but we're joined by a special guest to kick

[00:02:42] off the season.

[00:02:43] Great friend of the show.

[00:02:45] VP of original content and strategy at ShopTalk and grocery shop.

[00:02:50] None other than Ben Miller.

[00:02:51] I think this has been's third time on the show and wow, I don't think I'm overselling

[00:02:55] it when I say this maybe our best predictions episode yet.

[00:03:00] I'm getting ahead of yourself for Ricardo but he is a hard act to follow.

[00:03:04] So it's only fair for him to kick off the season and set the bar.

[00:03:08] Let's go right to our discussion with Ben Miller and share our retail predictions for

[00:03:12] 2024.

[00:03:13] I can't think of a better way to kick off season four and with our friend Ben Miller,

[00:03:23] VP of original content and strategy at ShopTalk and grocery shop.

[00:03:27] Ben's here to help us deliver some truly amazing 2024 predictions today.

[00:03:32] Welcome to the first episode of season four, Ben.

[00:03:35] Thanks for helping us kick off the new season.

[00:03:38] Hey, thanks very much KC Ricardo.

[00:03:40] Absolutely pleasure to be here and really look forward to this conversation.

[00:03:43] What you're no stranger to the show for sure our listeners have certainly enjoyed our ShopTalk

[00:03:47] and grocery shop recap episodes with you in Christina we've been on before.

[00:03:52] So we're turning things around a bit though this time right and rather than recapping

[00:03:55] things we're going to start predicting things for the year together and see how this plays

[00:03:59] out later on.

[00:04:00] Okay, so in preparation for today's show we've come up with 10 compelling predictions.

[00:04:06] And I think it's safe to say that each one comes with strong opinions and we're keeping

[00:04:10] score.

[00:04:11] That's for sure.

[00:04:13] Will retailers make brave moves this year and help me redeem myself?

[00:04:18] I'm invested competitive and maybe the most anxious so let's jump in.

[00:04:23] Let's do it on to our first prediction.

[00:04:25] Ben why don't you kick us off?

[00:04:27] Okay, I think we are poised at a really fascinating time in the retail market.

[00:04:32] So there's lots to talk about and my my first prediction is that we're going to see an

[00:04:37] acceleration in some of these being called the the teamification of retail.

[00:04:43] And what would I mean by well firstly I'm going to give credit to our good friend Jordan

[00:04:47] Berkett tomorrow retail who is coined that phrase that I've stolen but I'm going to

[00:04:52] kind of expand it hopefully put my own spin on it.

[00:04:56] I mean, there's two elements.

[00:04:58] One is the business model of team who and she had this this manufacture to consumers

[00:05:04] has been coined.

[00:05:06] If small batches producing it kind of an agile way to bringing that so that agile methodology

[00:05:11] into production and then imported by air much quicker than historic models direct from

[00:05:18] the factory to be able to reflect, fashion change brands test sizes test cut change and

[00:05:26] move again at a low of price point then has previously been being able.

[00:05:30] So look I think there's significant fashion significant impact across the apparel business

[00:05:36] of that model and I expect to see more of it this year but I think decide I'd really

[00:05:41] like to lean on to is how team who is engaging with its customers and how it's driving

[00:05:48] demand on his platform because that's got refrues for all of retail.

[00:05:53] So we're talking about a shop, we're calling Nick generation demands creation.

[00:05:59] There's really understanding the tools and tactics that team who and others are using to

[00:06:05] excite at excite shoppers.

[00:06:06] So do you have any give me some great examples?

[00:06:09] Yeah, if you've been for any time on the team of platform, you've seen drops, you'll

[00:06:12] have seen limited time deals that's expanding between manufacturers doing collaborations

[00:06:19] learning from that starting to bring that and then into digital marketing a team who is

[00:06:25] full of gamification.

[00:06:27] There is a consumer base we're getting used to this who are expecting it as part of

[00:06:31] their shopping and we're starting to see that appear in more and more places so they'll

[00:06:36] look just as a really interesting example just last month, we saw a demo from Instacart

[00:06:42] of how they're going to put some gamification onto the screens on paper cards when you're

[00:06:48] shopping at a physical grocery store.

[00:06:49] So this connection between things that people have tried on an app and to actually appear

[00:06:54] in physical retail, that's what we mean, that's our interpretation of teamification

[00:06:59] and we expect to see that really accelerating in 2024.

[00:07:03] Yeah, I have to agree with this one and I think it goes even maybe a few, even beyond

[00:07:08] that, because I think to your point on how this is being applied in store, particularly

[00:07:13] like the Instacart example right in the influence it's having on other retail brands trying

[00:07:18] to compensate for what I think brands are perceiving as they're losing customers to this low-cost

[00:07:24] high value kind of scenario that the team who's creating would even say like even beyond

[00:07:29] a pair of right and almost every product category that they sell.

[00:07:32] I don't know how many ads I run into that are encouraging me to engage with the app

[00:07:38] with here's 100% off.

[00:07:39] I mean, talk about buying customers here right?

[00:07:43] It's so inexpensive that the risk to try and buy something is so low.

[00:07:50] Yeah.

[00:07:51] And then you're hooked.

[00:07:52] I'll lose five bucks and I'll see if I get something good.

[00:07:55] And then there's just incredible deals and it's like taking that every day low price concept

[00:08:01] to an extreme right?

[00:08:02] Yeah, this will be interesting to watch this year and maybe it's re-enracked or it may

[00:08:06] cost you to an app.

[00:08:07] Exactly, yeah.

[00:08:08] I think it might be the most interesting thing to watch with this is how other retailers react

[00:08:13] and plus I would not expect Timo to sit still on this.

[00:08:17] I would expect them to go further.

[00:08:19] No, right now if you go into Google, lose those customers.

[00:08:24] Right now if you like go and use Google Shopping, Timo has taken over the whole entire Google

[00:08:28] Shopping pages.

[00:08:29] Yeah, really hard to see things that are not Timo.

[00:08:33] So I think it's going to be, no, I don't think there's any retailer that is not going

[00:08:37] to be watching us.

[00:08:39] And I think we'll lead us on to further conversations we'll be having less about the team of business

[00:08:44] model but just the amount they're currently spending on digital marketing is phenomenal

[00:08:49] for us to do this.

[00:08:51] Yes.

[00:08:52] My mind too sort of accelerates this divide between luxury brands on one end that can rely

[00:08:58] on the brand promise versus low cost value brands on the other end that they're kind

[00:09:03] of pulling to an extreme and where does that leave everyone in the middle?

[00:09:07] Yeah.

[00:09:08] Well, I'll get to come and talk about brands the moment but at the heart of our thinking

[00:09:11] about brands is product quality and I think that's going to be the challenge but we'll

[00:09:15] guess from back on to that one.

[00:09:18] All right, moving into number two, the evolution of retail media will drive the digitization

[00:09:24] of physical stores.

[00:09:26] Minors will come from those who drive these customer service use cases to gain customer

[00:09:32] adoption.

[00:09:33] I mean, the physical stores have been the black box.

[00:09:37] This really has a measurement and cross network management that will benefit as what Andrew

[00:09:44] Lipson says measurement makes markets.

[00:09:48] The digitization of physical stores will enable new measurement capabilities for our

[00:09:53] brands and allow retailers to monetize that foot traffic volume in stores.

[00:09:58] So it has a strong potential to disrupt the online marketplace ROI or retail media ad

[00:10:06] placement.

[00:10:07] I think we'll see more in physical locations and it leveraged.

[00:10:12] Yeah, I can't see I completely agree with you on this one.

[00:10:17] If you if we step back and think about retail media has predominantly been an online thing

[00:10:22] because retail media was created by Amazon, which is an online player.

[00:10:26] Great.

[00:10:27] Now every other retailer has woken up to the beautiful margins.

[00:10:30] If you're a grocer making two percent margins and you've seen his media business over here

[00:10:33] on 20% margins of course you're going to want to know that but if you're that grocer,

[00:10:38] 80% of your footfall is still in physical stores.

[00:10:41] It's just how you take those principles or close to your attribution and using digital assets

[00:10:47] and bring them into your physical store.

[00:10:48] We can do that if you call some physical hoarder and the store to drive it.

[00:10:52] And finally, you've got some margins that are going to fund it.

[00:10:55] So yeah, for me, I completely agree.

[00:10:58] It's only it can only go one way and that is that we'll see more digitization of physical

[00:11:03] stores and it's going to be driven by retail and the humanly.

[00:11:05] Yeah, I agree on this one too.

[00:11:07] I mean, I know big surprise that we're all really, really big on the retail media business

[00:11:11] given that we are.

[00:11:12] But all of our previous conversations but yeah, I go back and say before we ever had

[00:11:18] the phrase retail media networks in stores and I worked with organizations trying to deliver

[00:11:23] digital signage products into physical stores.

[00:11:27] And I have to tell everyone, I think the mistake a lot of the signage providers made early

[00:11:31] on is not having come up with this phrasing of concept of a retail media network pitched

[00:11:36] to the marketing people.

[00:11:37] I always remind everyone when I was in that market and trying to market those solutions

[00:11:42] we were pitching them to IT people which was looking back at was a mistake because I

[00:11:47] can't drive content.

[00:11:48] Right?

[00:11:49] So this was about content and working with brands and that's not owned by IT.

[00:11:53] But so what that does tell me though is that a lot of this required the technology to catch

[00:11:57] up.

[00:11:58] And I think we're there.

[00:11:59] We've got signage capabilities in any conceivable format you want to apply in the store.

[00:12:04] We used to be limited by the size of TV screens to do this and that's no longer a limitation.

[00:12:08] You can buy, there's panels available in any shape size format you want at this point.

[00:12:14] And now electronic shelf labels are also connecting into this retail media capability which means

[00:12:19] you've got almost any piece of real estate in the store can be transformed into retail

[00:12:23] media.

[00:12:24] And when you layer in technologies like computer vision to help measure these things and

[00:12:28] IOT sensors and devices to know where people are in the store we used to rely of course

[00:12:33] on just Wi-Fi for that but we have all these other capabilities now that can be connected

[00:12:37] together and we're starting to see retailers do that so I yeah no surprise I'm 100%

[00:12:43] behind this one as well that it all the building blocks are there to make that work.

[00:12:48] And so that's also a natural lead into our next prediction number three which again big

[00:12:54] surprise we have two retail media predictions and that's that it's not just physical stores

[00:12:59] that are going to make this evolve and grow bigger but I think we also now are going

[00:13:03] to see connections to streaming TV connected TV all of these other mediums that are in combination

[00:13:10] really going to disrupt advertising as a whole where now we can say that spending on

[00:13:16] RMS is likely to overtake TV spend this year because you're going to have the combination

[00:13:21] of what so in case you mentioned before the measurement right capability to measure these

[00:13:25] things the tracking you add in the idea where we're losing third party cookies.

[00:13:30] You're not going to be able to rely on anymore it's all about that first party data and

[00:13:33] who can you partner with that has another set of first party data that you can combine

[00:13:38] to offer advertisers the best possible targeting.

[00:13:41] So I knew I would predict that we'll see we started seeing this but expect more combinations

[00:13:48] with connected TV providers the TV set manufacturers themselves are all layering in advertising capability

[00:13:54] in their smart TVs plus all of the streaming TV providers now have kind of come full circle

[00:13:59] and where the original promise I think of streaming TV was you don't have to watch ads

[00:14:03] on linear TV anymore but now we're they're all introducing advertising again because it's

[00:14:07] an ideal platform to measure this.

[00:14:10] Even on paid programs right used to be able to get rid of the commercials and I'm seeing

[00:14:13] like hey Amazon video just introduced hands right so now if you want to get if you don't

[00:14:18] want to add on out on your Amazon Prime subscription it's an add on cost to get rid of

[00:14:22] that every streaming TV providers creating adjusting their tiering structure to accommodate

[00:14:27] ads and then you think about combining that with retail media networks you've got a pretty

[00:14:32] interesting data set.

[00:14:34] And as we record this just yesterday there's news starting to circulate that Walmart are

[00:14:39] having a look at Visio to buy bring that hardware into the portfolio so I think it's incredibly

[00:14:47] hot.

[00:14:48] Yeah.

[00:14:49] And just from shop talks perspective we I think we're really cognizant 75% of retail media

[00:14:57] spends still goes for Amazon give a take.

[00:15:00] So where they move that determines a lot.

[00:15:02] So we've given a main state keynote this year to clean allbury to show coming next month

[00:15:07] Colleen is the SVP for ad products and tech at Amazon so we're going to kind of hear

[00:15:13] exactly from her what's coming next and I think one of the challenges we want to put

[00:15:17] is he's Amazon now advertising business has got a retail arm.

[00:15:21] Is it a retail business to sell some out space because I think it's a really interesting

[00:15:25] conversation.

[00:15:26] And I think that's a pretty telling statement right because we used to say is Amazon

[00:15:31] really a technology company with a retail side business and now with the pendulum's

[00:15:36] shifting a little bit to your point is it more of an advertising business.

[00:15:38] I think we can say we've made the same argument before about Instacart.

[00:15:41] And we're really more of an advertising.

[00:15:43] Data is pretty.

[00:15:44] Yeah, exactly.

[00:15:45] Yeah.

[00:15:46] Well if we move into prediction number four kind of continuing down the same road if you

[00:15:54] will there's another layer to this and I'm going to let's talk about TikTok specifically

[00:15:58] and maybe social commerce in general.

[00:16:01] We're talking about we just talked about retail media and disrupting advertising but can

[00:16:05] anyone disrupt retail media in some way and I would put forth our prediction number

[00:16:10] four that social commerce specifically TikTok and what we've seen with through TikTok

[00:16:15] shop last year into the holiday season that could be something that disrupts retail media

[00:16:20] and what do I mean by that meaning where where advertisers spend goes so could we also

[00:16:25] see not just RMS partnering with streaming TV and connected TV but is there a player

[00:16:30] for RMS to connect into social commerce.

[00:16:33] We see deals with TikTok.

[00:16:34] There have been a lot of I think there've been some stories out there about maybe a possible

[00:16:38] Walmart deal.

[00:16:39] How many times are we going to mention Walmart in this series of predictions?

[00:16:42] I don't know you guys are talking about Walmart and RMS.

[00:16:45] I'm like I'm going to have to bend the word RMS for our next five episodes recording.

[00:16:50] Well I think this prediction is all about return on ads bet.

[00:16:57] Where is that return ads but get it come from?

[00:17:00] We've seen it increasing in the retail media network side.

[00:17:05] I would argue TikTok is proving that there's value on social commerce with TikTok shop so

[00:17:10] will we see similar things could happen potentially where I'll say maybe Pinterest is another

[00:17:15] potential platform we could see that happen and is that going to be a disruption?

[00:17:20] Is it additive?

[00:17:21] I think that's going to be the interesting thing and I'm going to propose it if we don't

[00:17:25] see partnerships then it'll be a disruption.

[00:17:27] With these third party cookies starting to disappear I'd say right they're not going

[00:17:32] to just disappear overnight but it's going to be gradual over this year.

[00:17:37] The way TikTok shop has the products integrated and the way that they're leveraged is probably

[00:17:44] the best and easiest way for affiliates to even engage or do the work.

[00:17:51] I think that since it's easier to connect to that inventory and it's easier to connect

[00:17:58] to get paid from the connected inventory in a TikTok shop versus an Instagram shop.

[00:18:05] The audience, the intended audience is essentially going to be able to drive that content.

[00:18:12] The more content the more opportunity and the easier it is for them to generate faster

[00:18:18] and know that they're getting paid.

[00:18:20] It's not going to really matter what retail wants, the audience and then consumer at the

[00:18:24] day they have more control over saying what they like and what they don't like and making

[00:18:30] money off of it.

[00:18:32] Being in affiliate is a lot of hard work.

[00:18:34] Couple hours here, couple hours there you may not get paid for certain things.

[00:18:38] They have to use your link.

[00:18:39] You can't go back later.

[00:18:41] There's a whole bunch of stuff that makes affiliate.

[00:18:45] They're earning the money, but the ease to do this on TikTok with integrated products

[00:18:50] is the night and day.

[00:18:52] Well, Katie, I'm going to please you with my next prediction because it involves neither

[00:18:57] Walmart nor Amazon nor retail media.

[00:19:01] Thank you.

[00:19:02] Shockingly.

[00:19:03] Because I would have talked about brands and what I really want to talk about is a prediction

[00:19:08] that will continue to see heritage legacy traditional brands continue to really have a

[00:19:15] moment.

[00:19:16] What do you mean by that?

[00:19:18] What have we seen?

[00:19:19] I think we've gone through a period of a lot of excitement around there to consume

[00:19:23] the brands and we've seen some incredible brands be established and be developed and become

[00:19:30] part of our world.

[00:19:34] And what we saw is you had legacy brands that had distribution and you had these new DTC

[00:19:40] brands that had digital capabilities and with digitally native.

[00:19:45] And they were able to drive that growth through knowledge of the customer, through agility

[00:19:51] and through their conversations.

[00:19:54] What we've seen of late is actually particularly post pandemic importance of distribution.

[00:20:02] So when you still do depends what category you're in anywhere from 30 through to 90% of category

[00:20:10] sales still being physical that ability to get your product in front of customers in

[00:20:16] a physical format repeatedly is really valuable.

[00:20:19] That traditional moment, the PNG's most first moment of truth and you take it off the shelf

[00:20:23] that's still there and you can touch and feel and being harder for the many DTC brands

[00:20:30] to build physical distribution.

[00:20:32] Then it has been for some legacy brands to build digital capability.

[00:20:35] Now that is in no way underestimating some of the incredible transformations of some

[00:20:40] of these brands are going through to build up their digital capabilities, but there's

[00:20:43] been a lot more investment by legacy brands across many sectors to be able to do that.

[00:20:48] So you've now got, yeah, of course you've got whether it's you will be partners building

[00:20:52] their own stores or can be like all birds going through wholesale or bubble going through

[00:20:57] wholesale.

[00:20:58] You've got a suite of brands that are getting both the distribution and digital capabilities

[00:21:05] and that is helping a series of quite traditional brands who have become digitally savvy to be

[00:21:12] able to almost reinvent themselves to be relevant.

[00:21:16] And there's a couple of ways that we're sort of seeing brands do that, whether it is driving

[00:21:22] distribution, creating new personas and themselves online using everything from short

[00:21:29] form video through to feature films to tell new stories about their brands and reposition

[00:21:35] themselves to be relevant.

[00:21:37] And underpinning that you've got this kind of third leg which is product quality.

[00:21:41] And I think as we've said about T-book, some of these brands that are having incredible

[00:21:46] runs at the moment, whether it's your book and stock in footwear or crocs or obviously

[00:21:51] we hinted strongly towards barbeque and metapp.

[00:21:54] No, these are products that have got long, long histories of quality underneath them.

[00:21:59] And you're kind of combining that product quality with new ways to be relevant to customers

[00:22:05] and talking about them in new ways and having new direct conversations and having distribution.

[00:22:10] I think we're going to continue to see more legacy brands continue to have moments in

[00:22:15] the earhead.

[00:22:16] I think it's going to continue to be, I think this pretty much this decade is the most

[00:22:24] exciting time for heritage or legacy brands because of they didn't have to panic and move

[00:22:33] to a channel.

[00:22:35] They're essentially fat and happy.

[00:22:38] They don't have to move to a channel out of FOMO or we're going to miss out, it's going

[00:22:43] to hit our bottom line.

[00:22:44] They have a pretty secure, they've always had a pretty secure and recession proof business.

[00:22:49] And so they've really been able to just sit back and learn and watch the DNVBs build these

[00:22:57] digital presences, build these user experiences.

[00:23:01] And I think we all sat back and laughed.

[00:23:04] You can't say that the way we do retail is ancient and doesn't work and it's too expensive

[00:23:11] and then as soon as you learn retail, you're going to be in wholesale, you're going

[00:23:15] to open up stores too.

[00:23:18] And so there was this aha moment amongst many of my friends where it's just like, see

[00:23:25] you want to know actually do you mark 20?

[00:23:28] Yeah, I think if anything, this has sort of shown us the truth to the innovator's dilemma

[00:23:34] right where there's a cycle to disruption.

[00:23:38] And I think, and I'm going to suggest that almost all of us, probably include us all

[00:23:43] there because who didn't say during the peak moments of D to C success say that oh this

[00:23:48] is just going to change everything.

[00:23:50] This is a moment right?

[00:23:51] This is everything's going DTC brands that this is we're completely flipping the model.

[00:23:55] I think what we've ended up proving is we sort of compress the cycle right so disruption

[00:23:59] works in a cycle you always have established players.

[00:24:02] Someone new comes along has a new method of some sort, whether it's a new business model

[00:24:06] or a new distribution model, whatever it is, causes a disruption.

[00:24:10] But I think the ultimate lesson is always that the two things that you really need to succeed

[00:24:15] in any even against disruption is scale and agility.

[00:24:19] And if you have the scale like these heritage and legacy plans have and they're agile enough

[00:24:25] to adapt, amitations the best form of flattery right so they can learn to adapt and imitate

[00:24:30] these disruptive models that come from the much smaller lacking scale disruptors, then

[00:24:36] they've taken away the differentiation and they can absorb that differentiation.

[00:24:39] And once they've done so and they apply their scale, then they should be able to recover

[00:24:44] and continue.

[00:24:45] And I think we see evidence of this when so many DTC brands got acquired by these legacy

[00:24:51] heritage brands.

[00:24:52] Some successfully maybe some not so and that again just in my mind is a demonstration of

[00:24:56] their skill at being agile.

[00:24:58] Some brands would do it better than others.

[00:25:01] And even the best ones can have a momentary stutter, right?

[00:25:04] A lot of noise was made about Nike when they decided to pull out of a lot of their wholesale

[00:25:09] and distribution to put more effort into DTC.

[00:25:13] And then as soon as their numbers started to decline a little bit we saw the pendulum

[00:25:16] swing and the media noise went the other way and said oh, then they jumped too soon on that

[00:25:21] that they go too far on that model where I would argue their business is still sound.

[00:25:26] Sometimes you have a hiccup and sometimes you have external factors that you didn't plan

[00:25:29] for, but that doesn't mean the strategy was a mistake.

[00:25:32] Yeah, I think a lot of these direct to consumer brands really did innovate digital commerce

[00:25:39] especially for more of a premium product rather glossiness of the world, the albergs,

[00:25:45] the Warby Parker.

[00:25:47] But I do think heritage will lead in digital commerce because they come, they already

[00:25:53] have these 40 to 80 to 100 years experience in physical retail and retailing in general

[00:26:02] where the technology today can adapt and be so much more flexible to bend and twist

[00:26:10] the way they want it to what they want it to mean for them.

[00:26:14] Because they have the power to dictate because they are really strong brands, they're very

[00:26:20] profitable brands.

[00:26:21] They have very strong DNA and points of view.

[00:26:24] And it's not as expensive today to shape the way digital is going to look for them as

[00:26:32] some of the brands that launch this initially and really invested and paved the way, there's

[00:26:38] a lot more expensive for them.

[00:26:39] Yeah.

[00:26:40] And there was a lot of hard learnings for them and some of them didn't have great outcomes.

[00:26:44] Yeah.

[00:26:45] And I'd love to just build on something that you said as well Ricardo is about agility

[00:26:50] which I think is key.

[00:26:52] Just having distribution is not a guarantee of success.

[00:26:55] You need to combine it in case you're saying with that unique and differentiated brand

[00:27:01] ID and brand DNA and then build stories and build engagement off that.

[00:27:06] Yeah, this week we've seen lots of the CPGs putting out quality results and the geek I am

[00:27:13] I've been kind of enjoying going for it as numbers.

[00:27:17] And we've seen that we've seen manufacturer after manufacturer talking about volume

[00:27:22] challenges.

[00:27:23] Inflations got the market and they're all volume challenges of some of these big brands

[00:27:27] in the CPG world who as the economy has got a little bit tighter and spending with whether

[00:27:34] it's student loan relief coming out or stab changes sort of it's become a bit tougher

[00:27:38] and suddenly we see which did this count we see switch to private label so it's agility

[00:27:44] that super key to be able to combine that and digital capability in driving demands with

[00:27:50] your distribution.

[00:27:51] And those that can be both 100% the one set to win.

[00:27:55] Yep, absolutely.

[00:27:58] So I want to take a moment to pat ourselves on the back that we're halfway through our

[00:28:02] predictions list and we've yet to mention AI and any of them so I have a feeling this

[00:28:08] is going to be short lived.

[00:28:10] Yeah.

[00:28:11] That being said prediction number six is all about AI and how AI is not just everywhere

[00:28:16] in retail.

[00:28:17] I think so far just what we've seen just even in this year we're only into February and

[00:28:20] it's already showing up everywhere but I think the distinction for this year is where last

[00:28:24] year maybe was more about the hype and the promise and stories of capabilities.

[00:28:29] 2024 is more about demonstrating real tangible ROI in AI investment and seeing that not

[00:28:36] just in what I'll call internal operational use cases things like around forecasting

[00:28:41] supply chain which I think we have been seeing before but more consumer facing use cases

[00:28:46] that either directly impact customer experience or really help drive top line revenue in some

[00:28:51] way that contribute to that ROI and I'm going to include in that too even things related

[00:28:56] to augmenting store associates so they may come back to that a little later but it's all

[00:28:59] these kinds of very visible use cases I think will be the new ones that we see and there's

[00:29:04] going to be tangible ROI.

[00:29:05] We've already started to see some retailers demonstrating that openly and talking about

[00:29:09] measuring a metric like we put this new AI tool into our stores and our store employees

[00:29:14] now say they're saving at least an hour a day in productivity and time that they didn't

[00:29:18] have before thanks to these new tools so those are to me are tangible ROI on this AI

[00:29:23] investment that we're going to see.

[00:29:25] Yeah.

[00:29:26] I completely agree.

[00:29:27] I think we waited the last year everyone got very, very excited about generative AI especially.

[00:29:35] There was a whole stream of caution from people who are very close to the subject and

[00:29:42] close to organizations who are developing it which just created a bit of risk and a

[00:29:47] bit of concern in organizations.

[00:29:49] So I think what we saw was that was a big deep breath taken number one to make sure

[00:29:53] that's not over as she is just a hype cycle do you think there's something real that

[00:29:57] I think we think there is.

[00:29:59] And number two is okay well if we believe that what

[00:30:03] are the guard rails what do we need to put in place for our company to protect our data

[00:30:10] to protect our employees and to protect our customers and our customers data.

[00:30:14] And how do you do that in a way that also creates a culture of experimentation and being

[00:30:18] inquisitive about this technology and the benefit it can bring.

[00:30:21] I think we started seeing our companies who've got that in place.

[00:30:25] I was going to mention Walmart but I don't want to go on the wrong side of KC but some

[00:30:28] large companies have put out some very public statements about their ethical AI pledges

[00:30:33] and how you navigate that.

[00:30:35] With those in place you then great less accelerate into use cases let's make some of this

[00:30:39] happen.

[00:30:40] I guess everybody knows what side of the line I stand on.

[00:30:46] Am I the only person that has saved my money and an eight top ramen for nine months

[00:30:52] to buy a pair of shoes?

[00:30:58] I think the question there is it just switched to a private label ramen noodle.

[00:31:02] No.

[00:31:03] Oh going back into beautiful shopping experiences.

[00:31:10] Number seven the engineered influencer evolution of frontline store teams augmented by AI

[00:31:16] potentially we have some ongoing labor shortages in many areas of retail especially on

[00:31:25] the frontline worker side retailers will likely lead very heavily into AI not just as an

[00:31:32] automation tool for stores but to augment the capabilities of each store member.

[00:31:37] Turning them into engineered influencers where customers rely on everything from product

[00:31:43] discovery curation to general support we'll see more self checkouts less staff but the

[00:31:53] staff will have more tools to really augment how much they can achieve and have to work

[00:31:58] as hard.

[00:32:00] Installer knowledge swings back to the hands of in store teams versus in the hands of shoppers

[00:32:05] where we were seeing more tools that allowed the shopper to do more by themselves kind

[00:32:11] of going back to allow sales associates to do more for the customer.

[00:32:16] I just saw a video that's slightly gone viral and it's one woman working at Colts

[00:32:27] and she's in tears and she is the only cash rep in the entire store and the line is enormous

[00:32:33] and she's just asking for help.

[00:32:36] And it is difficult to find skill labor be able to put the training resources together to

[00:32:42] get this staff well trained and take some of the heavy weight of all of the ad men and

[00:32:50] everything that needs to be done off their plates to really make that more enjoyable

[00:32:55] for the people that work there and the customer because no customer wants to be in line

[00:33:00] making her cry either.

[00:33:02] You know it's not a good experience for anyone but getting that staff in there and

[00:33:07] people wanting to have those jobs because it's not necessarily so painful is difficult

[00:33:13] right now.

[00:33:14] Yeah I agree.

[00:33:15] I mean we've talked about this off and on with a number of guests on the show about how

[00:33:20] those store teams can get better tools what technology is going to make it better for

[00:33:25] them.

[00:33:26] And in fact, we've even talked about this idea of them being more like an influencer

[00:33:31] in the same way that we see them in social media where you have these people who are acting

[00:33:36] as influencers to get you to buy a product right.

[00:33:39] But every retailer has staff in their stores that know the products that they have and

[00:33:45] they're very likely if we think of the demographics of who are they hiring, there are probably people

[00:33:49] who are pretty savvy in social media themselves are inclined to leverage social commerce for

[00:33:54] their own shopping needs so why not leverage this expertise and help kind of turn your

[00:33:59] own brand into these engineered influencers using people you already have on staff.

[00:34:04] And I think the tools exist now to help make that possible.

[00:34:07] Yeah, there's heard a handful of brands recently at a conference and they were talking about

[00:34:14] two personas of associates and sales people that they're looking to hire.

[00:34:19] The one that thrives behind the camera and then the more traditional sales relationship

[00:34:26] client telling piece to be able to have both of them in stores and essentially teach

[00:34:31] each other's each other's jobs, you know, to kind of balance that out so they get the

[00:34:35] best of both worlds and can still kind of control some of that content that goes out

[00:34:40] to make sure it's on brand.

[00:34:42] But to kind of put them together and look for them both.

[00:34:45] Yeah, I think when you look at the numbers, the employment, the unemployment numbers across

[00:34:50] the US are still in a very healthy position from that perspective but the if you look at

[00:34:56] the quitch rate, so the number of people expecting to change jobs, it's significantly higher

[00:35:01] in retail than it is across the broader economy.

[00:35:04] So retail still has an attraction and retention challenge to any way that we can use technology

[00:35:09] to either make those jobs easier, more fulfilling or more varied.

[00:35:14] It's got to be advantageous to everybody in the industry.

[00:35:17] Yeah, yeah, 100%.

[00:35:19] 100%.

[00:35:20] So prediction number eight, this one might cause a little bit more of a reaction from

[00:35:24] people listening because it's going to be a little bit controversial, possibly just given

[00:35:28] some of the recent posts by a certain Facebook CEO.

[00:35:33] So I call this retailers jumping into Apple's Vision Pro platform and why am I saying this?

[00:35:40] Not from a perspective of necessarily driving sales but there have been a lot of interesting

[00:35:45] PR moments.

[00:35:46] I think J. Crew was one very tailored and customized shopping apps designed for Vision Pro to really

[00:35:53] leverage that spatial computing platform for customers to engage with anything from

[00:35:58] a basic virtual trion to just an experience of wherever I am and I have the Vision Pro,

[00:36:03] I can be in that store and see any product I want and up close and living in large as

[00:36:09] I want within that space and really leveraging the power of this spatial computing VR concept.

[00:36:16] So you might ask, well why are retailers doing this because the numbers say that at best

[00:36:20] case Apple's probably shipping a few hundred thousand of these this year by most estimates.

[00:36:25] So not exactly a large market of people for a specialty retailer and I'll keep using

[00:36:31] J. Crew as an example and they're not reaching millions of customers this way, right?

[00:36:35] They're at best going to reach a couple hundred thousand maybe.

[00:36:39] So why do it?

[00:36:40] Why deliver this technology showcase and I think that's really what the answer is.

[00:36:45] This is sort of an attempt of retailer as a brand to get a first mover advantage to really

[00:36:50] make some noise be perceived as being edgy and technology leader knowing that they're

[00:36:56] trying to grant that halo effect of people who may be watching what's happening with Vision

[00:37:00] Pro but aren't likely to invest thirty five hundred dollars in the technology in this

[00:37:04] current iteration of it.

[00:37:06] So there I believe brands that take this path and I think we're going to see more of them

[00:37:10] this year do it notwithstanding folks like Netflix saying yeah, we're going to wait and

[00:37:14] see I think we're going to see more retailers jump in both as a learning experience which

[00:37:18] I know people are going to think oh this is starting to look like the whole 2022 in

[00:37:23] the metaverse again with people jumping into create their shopping worlds but I think

[00:37:27] it's a little different than that because I think there's an expectation that Apple

[00:37:31] isn't this for a long game so that it's not this release of the product that's really

[00:37:35] going to matter much if we think back to the first iPhone.

[00:37:37] The first iPhone wasn't the massive hit.

[00:37:39] It took a few iterations for it to really become popular with the iPhone 3G, there's

[00:37:44] the 3GS, the 4 before it really started to have an impact on competitors who remembers

[00:37:49] having a blackberry right.

[00:37:50] So I think it's something very similar that there's an expectation for that and this is

[00:37:54] all about who are the retailers who are going to position themselves early so that when

[00:37:58] we reach that critical mass they've already established themselves.

[00:38:01] I think it's really interesting it's the earlier adopter phase and I think you've got to be

[00:38:09] absolutely mad as any developer to not think that a new hardware platform that I was

[00:38:14] created needs to be experimented with it needs to be looked at you've got to go with it

[00:38:18] 100% and good for J crew and some of the other organizations who are having to go with

[00:38:23] it and trying to understand because you'd be mad as it's Apple not to.

[00:38:28] Yeah, I mean I've seen a couple ads for it and there is somebody standing in front

[00:38:34] of a whole bunch of spreadsheets and docs like no thing.

[00:38:39] Yeah, yeah, no, no, no, I have 150 browser tabs open thank you very much.

[00:38:46] I work way too fast to have to use it that way.

[00:38:49] Yeah, I think it's going to be interesting.

[00:38:51] I mean we have this huge opportunity as we move further and further into essentially

[00:38:57] a new type of screen the glasses, the projection this I think is probably one of the most meaningful

[00:39:05] like steps towards probably the next thing because Apple did it and there is they are

[00:39:11] known for better user experiences and a lot better purpose or thoughtfulness on these

[00:39:18] launches.

[00:39:19] So we'll see right not super pro I'm still trying to figure out more than three things

[00:39:23] to use my Apple Watch for my favorite button is like find my phone and that's just ridiculous.

[00:39:29] Yeah, but that's a key feature.

[00:39:32] I don't know where my phone is and I can push it but I'm going to keep some like this

[00:39:37] is brilliant.

[00:39:39] I need more purpose for my watch so I've been taking suggestions everyone of what your

[00:39:44] favorite use case is for your Apple Watch because I'm still trying to adopt it and get

[00:39:50] it into my lifestyle with meaning.

[00:39:54] So talking about meaning the modern consumer.

[00:39:59] 2024 shifting a little bit from the tech but driven by tech.

[00:40:04] The modern consumer will become even more demanding this year is my prediction from

[00:40:09] the brands they shop with and the expectations that they're going to hold these brands accountable

[00:40:17] for whether or not it's convenience, ethics, sustainability, the do better right and I

[00:40:26] think consumers are in a position to hold brands accountable.

[00:40:30] I think we just saw that with the Super Bowl commercials one specific brand was immediately

[00:40:34] held accountable by millions of consumers and the risk is real and I think that this

[00:40:41] is a direct conflict with these types of sustainability initiatives and transparency saying

[00:40:50] that they want sustainable and ethical companies that pay living wages and then at the same

[00:40:55] time and that they'll pay for it but then at the same time we have sheen and the team

[00:41:01] of vacation of the United States and we have this market of well I can get all of these

[00:41:07] things and do this haul for 80% less than on Amazon or on Walmart by going on T-Moo right

[00:41:13] now because I got all of these epic coupons from spinning away off.

[00:41:17] And so I think we're going to have some consumers and we're going to see a little bit of

[00:41:22] this dichotomy of you've got the good people on your shoulder of I believe in this but

[00:41:29] I'm doing this or is it going to push everyone from how they have been shopping and

[00:41:37] put it saying that they believe and will pay for higher quality products and made in

[00:41:43] the US or something more sustainable or upcycled but not and then they get all of these products

[00:41:52] and they start keep chasing those prices down to where things are 80 90% off because

[00:41:59] of a marketing push that they actually pivot and say okay I don't want any of that stuff

[00:42:06] anymore.

[00:42:07] I'm not really happy when I receive these packages and they start doing what they believe.

[00:42:15] So I think it's going to be an interesting moment to watch these two kind of economies

[00:42:20] kind of shift because we see what the modern consumers doing and saying but it's not necessarily

[00:42:26] matching how they're spending.

[00:42:28] Yeah, and I think it is really interesting that the builder I would also give it is a prediction

[00:42:36] I think kind of circular and also recycling but reusing selling platforms for especially

[00:42:44] around fashion this whole idea of the circular economy.

[00:42:48] Whether that's been driven by sustainability or driven by drift I think it's a hard one

[00:42:56] thinking about which of case your shoulders we're sitting on but I think that might be

[00:43:01] a model that applies to both and I think we should expect to see some more developments

[00:43:07] and more platforms and retailers investing in circular solutions this year.

[00:43:13] Yeah.

[00:43:14] I think an interesting lens to look at this through is by product category because there

[00:43:18] are certain segments where consumers I think ultimately will want longer lasting products

[00:43:24] that requires less replacement.

[00:43:26] If we think about over history or certain typically this comes from price right the most

[00:43:31] expensive things that a consumer wants that used to be something like a television right so

[00:43:35] people would keep a television for 10 years because you didn't want to spend the money

[00:43:38] on and you won but now you can get $100 TVs.

[00:43:42] You for 10 years anymore.

[00:43:45] Yeah exactly because what I would only cost $100 what for right so you might as well

[00:43:48] replace it when the next new feature comes out.

[00:43:51] So I think there's a lot of potential variation by segments going to be interesting to watch

[00:43:55] here and I think that's one of the many things this teamification is disrupting is by selling

[00:44:01] things so incredibly cheap in any almost any category it kind of does away with that thought

[00:44:05] process for the consumer right things that I used to expect as a consumer I have a long

[00:44:10] life cycle with maybe isn't true anymore if there's a retailer like a team that's willing

[00:44:14] to sell it for $5 and I'm now willing to throw it away.

[00:44:17] So yeah I do think that you're right that this demand consumer demand and these things

[00:44:22] is going to somehow have to reach a conclusion there.

[00:44:25] There's going to have to be some type of conclusion and maybe that conclusion even goes into

[00:44:30] the gamification of retail ends up getting some policy changes maybe much like Vegas where

[00:44:37] you can't have the ching ching ching ching ching ching anymore.

[00:44:39] We love that so yeah maybe this some of the gamification is saying listen it's taking

[00:44:47] advantage of consumers it's going into the fact that maybe you can't have some of these

[00:44:51] gamifications and more because it is we know what works right and how to Vegas ching

[00:44:57] ching ching was like one of the biggest moments where I was like you're taking that away from

[00:45:01] my experience I was having so much fun.

[00:45:05] So boring without it.

[00:45:08] Well that I think brings us to our final prediction for this show and Ben I think maybe

[00:45:12] we've saved the best for last right?

[00:45:15] Let me get you to go I'm predicting in 2024 we finally kill off on the channel on the

[00:45:21] channel dead so what do you mean by that is just a word is just semantics we had it where

[00:45:27] did we go we shopped out last year declaring on the channel beds and I think we've spent

[00:45:32] the last few moments trying to really build on this principle because what we mean by

[00:45:36] that is the idea of thinking about your customers and your products in your route to market

[00:45:43] just in the construct also traditional retail channels is very it's got a very inside

[00:45:48] baseball isn't it it's not putting the customer at the heart of it right which is we which

[00:45:52] is why we were talking about unified commerce and by unified commerce we mean being there

[00:45:58] for your customer wherever your customer wants you and doing it in a joined up and consistent

[00:46:04] way so whether that's online and offline whether that is yeah you transacting online you

[00:46:09] buy you buying it you're actually picking it up in a store or whether it's just you're

[00:46:13] used to having a brand communication a brand story in a virtual environment when you

[00:46:18] show up in a physical store it looks and feels the same and talks you in the same turn

[00:46:22] of voice.

[00:46:23] It's having a unified and connected way and not just in that customer proposition also

[00:46:29] in you know the tech stack I think retailers are really telling us to move fast 2020

[00:46:35] 20 what we bolted things on to existing legacy systems and our tech stack is now it doesn't

[00:46:41] talk to each other and we need help because we doesn't give us inventory visibility

[00:46:44] etc etc so unified a tech stack unified structure so we're seeing more and more companies

[00:46:50] moving away from having dedicated innovation teams bringing in digital teams into core IT

[00:46:57] teams making sure e-commerce teams are baked into the core organization so your teams are

[00:47:02] structured you can't have a separate digital marketing team anymore because digital is

[00:47:07] marketing so you get you've got to bake it so you unified a structure unified a tech stack

[00:47:12] and then you can turn up for the customers in a unified way and I'm hoping that if I keep

[00:47:17] saying unified commerce enough times then nobody will ever say the word future tool again and that

[00:47:23] that that structure of the English language is over so please let's kill off on your channel

[00:47:30] let's never hear a feature tool and let's get behind you to fight commerce 100% I'm right there

[00:47:35] with you. I thought I invented the damn term like eight years ago and apparently I didn't

[00:47:42] so I will repost and repeat anything you post on unified commerce exactly right every

[00:47:51] percent yes yes I think that's how we save that one for last all right so we managed to get

[00:47:57] through 10 unique predictions for 2024 I absolutely love these a fantastic set of predictions Ben

[00:48:06] thank you so much for joining us today for this. Oh absolutely pleasure he's been a little fun

[00:48:11] and I think they're just really for us 10 she's just how much is changing at the moment in

[00:48:16] any air industry and I think you know most people get into retail because they really enjoy that

[00:48:22] fast pace of change and then they're getting to digital bit of retail because that's the most

[00:48:28] fast-changing part and the year ahead it looks set to be really exciting. Well last year we were

[00:48:35] a bit more avid and future thinking and optimistic than what brands delivered so I'm hoping this time

[00:48:44] we're not too early for some of these yeah I can definitely think that this is where we where

[00:48:49] everybody needs to have their head and where we should see the most growth. I'm very optimistic

[00:48:54] about 2024 on technology adoptions consumers and opportunities so I'm thinking that this is going

[00:49:01] to be a great year for retail where you guys stand. I'm going to agree with it I think there's

[00:49:07] good reasons to be optimistic for the year I think investments for retailers are going to be there

[00:49:13] I mean that's not to say there won't be some hiccups that there may not be some pretty divided

[00:49:18] differences so to speak between one set of brands but those who are leaders starting the year are

[00:49:23] likely to continue to through the year as leaders and I think it's really more about the ones who are

[00:49:28] not the in that group of leaders today and what are they going to do this year to try to approach

[00:49:34] them and to try to gain that status and not stay behind I think that's going to be the big thing we

[00:49:39] see this year. Yeah and for me I'm expecting to see more polarization I think the companies who

[00:49:47] embracing change and getting behind some of these who've spoken to you today are in a good

[00:49:51] position I think those who aren't there will be economic headwinds I think as a number of stimulus

[00:50:00] incentives unwined in the economy that will cause problems and I think we will see a bit

[00:50:08] of a diversification in performance I think there is there is growth and opportunity to get after

[00:50:14] there is some really interesting technologies that are going to help it but I think we will continue

[00:50:19] to see retailers and brands being selective in whether they put their investments I think there is less

[00:50:26] capital available there is less VC bunny available so I think he's going to be about selective it's

[00:50:31] going to be about returns it's going to be about profitability over growth and I think it will be

[00:50:36] with diversified but I think within that there is so much this exciting to watch and to be

[00:50:43] part of that's for sure. Well this might just be our best prediction episode today thank you

[00:50:48] for joining us Ben. Thank you that really enjoyed that and the really looking forward to seeing

[00:50:53] you both and hopefully lots of the listeners at shop talks are just as a quick reminder is kind of

[00:50:58] real fast this time next month yeah 17th to 20th in lovely as Vegas Nevada so we'll look forward

[00:51:06] to that and then just one of the most enjoyed part of the show is our meetings program

[00:51:13] it's a proprietary 50 minute meeting you can have but just to find a reminder if you're planning

[00:51:17] on coming you've got to be registered by the end of February to be able to take part in that

[00:51:23] otherwise that selection and all the algorithmism double locked in that we do look you can still buy

[00:51:28] a ticket the day before if you want to but if you want to be part of the meetings program make sure you

[00:51:33] got registered so you can be part of that before the end of February so yeah look forward to seeing

[00:51:38] you both and lots of lots of lots of listeners then wonderful so register for your shop talk

[00:51:44] and on that note Piccardo this episode is a wrap

[00:51:54] if you enjoyed our show please consider giving us a five star rating and review on Apple

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[00:52:04] tune in on youtube so you don't miss a minute a big thank you to good pods listeners for helping us

[00:52:09] stay in the top three spots of the charts i'm your co-host Casey golden please connect with

[00:52:14] us and share your feedback on twitter at kcc golden ricardo underscore palmar and at retail razor

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[00:52:25] ships to right here in box subscribe to our sub stack newsletter for full episode transcripts

[00:52:30] and bonus content i'm your host Ricardo Belmog thanks for joining us

[00:52:37] till next time keep cutting through the clutter and stay sharp this is the retail razor show