Retail Changemakers Come Together
By: Rob Smolarski
The Shoptalk conference is an annual event focused on innovation and trends in the retail and e-commerce space. Some of the main themes of past Shoptalk conferences have included digital transformation, customer experience, and emerging technologies.
Shoptalk is where thousands of retail changemakers come together every year, and we consider it the most “productive” conference focused on commerce– united by keynote speakers, and panel discussions, there are ample networking opportunities for industry professionals.
This year it featured 275 senior-level speakers, industry leaders, and innovators from companies ranging from established retailers and brands to innovative new startups and prolific investors. OMG estimates that over 10,000 people attended the four-day event.
While this year didn’t generate the same energy as in 2022 – coined “Retail’s big comeback,” alluding to the first large-scale in-person industry conference post-pandemic– there was still plenty of thought leadership, big-name keynote speakers, and broad themes that will probably set the trend for the rest of the year.
We will cover our 3 must-have key themes from Shoptalk 2023 and what clients should be thinking about:
- Data-Driven Measurement Growth
- Evolution of Physical & Digital Retail
- Generative AI and What it Means
Retail Media Networks: Data management is becoming more complex as businesses collect and store more significant amounts of data and as the types of data sources increase in variety, which includes everything from structured data like customer information and sales data to unstructured data like social media posts and customer reviews. This growth in data, particularly in Retail Media, has led to a need for more sophisticated data management systems that can handle the volume, velocity, and variety of data. Brands continue to think about Retail Media Network (RMN) data around three concerns, as shared by Joe Laszlo, VP of Content, Shoptalk, “data quality, creative/ message, and audiences.” Retailer 1st party data continues to be highly valued because brands leverage this high-performing audience data on other channels like social & CTV.
New Approaches to Data Monetization: Retailers are increasingly turning to data monetization to generate additional revenue streams to offset rising business costs– fueling the explosion of RMNs and creating the need for platforms that provide data-driven measurement. For example, Walmart Connect had a significant presence at Shoptalk. In addition, they’ve invested considerably in their WMC platform, Luminate, and Commerce Technologies. All of which have a price tag for partner brands.
Additionally, retailers are starting to partner with 3rd party platforms from an entire industry that has sprung up. We sat down with Rachel Tipograph, CEO, Mikmak, and she called it out; “brands invest in commerce platforms that are making $100’s of millions from data aggregation of Amazon.com data”. The new theme was the continued investment in retail media; the news was an investment in platforms to provide advanced closed-loop measurement, and the next is the need for the right talent, who are currently sitting in data science & IT to move from support to leadership roles.
Empowering the Right Talent: With the increase in data complexity, data scientists are required to have a broader range of skills, including data engineering, data governance, and leadership, which means that support for data scientists needs to change to provide them with the tools and resources they need to effectively manage, analyze and tell the right story with the data. This includes advanced analytics tools and findings from the folks with the skills to be the voice at the table. Within this topic were several callouts from top commentators about the future role of marketers. For example, Morgan Flatley of McDonald’s stated in an interview,” Take IT teams out of corporate and embed them into brand teams,” and “Marketers are now growth drivers.” The convergence of IT and Marketing should be top of mind for all brands.
- Evolution of Physical and Digital Retail
Seamless Store Experience: The evolution of physical and digital retail mergers is driven by changes in consumer behavior and technological advancements. This theme carried over from Shoptalk 22′ and into 23′, except it went from the growth of Click & Collect brought on by the pandemic to stores value prop moving back to convenience + entertainment. In addition, Tech went from the increase in mobile payment and automated retail to digital experiences designed to complement the physical store experiences.
Nadina Guglielmetti, GM, Vitamin Shoppe, called this out, commenting that ‘online predictive analytics attributes to 1.5x lift on basket size when the purchase happens in store’ and Dave Kimbell, CEO of ULTA Beauty, stated that shoppers spend 2x more when they engage in both digital and physical stores.
New Tech, Data, and Apps: The merging of physical and digital retail has allowed retailers to create a more seamless shopping experience for customers while also providing new opportunities for revenue growth. Retailers are equipping store associates with mobile POS systems that allow them to ring up sales from anywhere in the store. Some retailers are experimenting with AR and VR to enhance the in-store experience for customers. For example, Walmart showcased its “Try it On” app feature. This AR tech was presented at Shoptalk 22′ by Fit Match, and the retail giant invested and launched it a year later. In the same vein, retailers are launching more apps for store associates and customers to use in real-time for product information and gather 1p data.
Creator Content for Brands & Stores: Retailers are empowering store associates to create content so that retail stores can unlock authentic and creative ideas that resonate with local communities. Store associates are often more familiar with the local culture, trends, and customers than corporate marketing teams and can create content that speaks directly to their audience. McDonald’s CMO Morgan Flatley called this out and emphasized the importance of loosening brand safety guidelines while giving associates creative freedom.
She stated, “We would stress over the weight of a line in creative.” She continued, “Now it’s about creatives who craft authentic and less curated content.” With the explosive growth of TikTok and another short video format on social, brands who want to play will have to take an entirely different approach regarding brand safety.
- Generative AI and What it Means for Brands, Retailers, & Partners
“The shiny thing at this Shoptalk is generative AI; it’s seeing real investment, unlike the metaverse.”
Generative AI Hype and Reality: The word “commerce” was on about 40% of the booth signage at Shoptalk, while “generative AI” was the talked-about topic in the other 40% of sessions. It generated significant buzz and with good reason. Many presenters expounded upon the ability to create unique and personalized content at scale, from product descriptions to social media posts and even entire ad campaigns, without the need for human input for brands and retailers alike. With extensive and immediately recognizable benefits for companies that need to create a large amount of content quickly, generative AI can automate the process—saving production time and resources.
Furthermore, AI can be used to personalize content based on individual customer preferences and behaviors. By analyzing data from customer interactions and using machine learning algorithms, brands can create content tailored to each customer’s specific needs and interests.
This match between commerce content and context leads to higher engagement and conversion rates for businesses. The investments in this space are where the rubber meets the road, and it’s real. I chatted with folks from the startup Sitation, “Funding to generative AI startups has soared.”
However, it’s also important to understand the limitations of Generative AI. Krystina Gustafson, SVP of Content, Shoptalk, pointed out, “Searches for Chatgpt have outpaced the metaverse at its peak. Unfortunately, brands and retailers have not cracked the code on that, so it’s important to consider a crawl, walk, run with AI. While it can create new and unique content, it still relies on existing data and patterns to generate that content. This means that if the data is biased or incomplete, the Generative AI may produce biased or incomplete content. Additionally, Generative AI is incapable of truly creative thinking and may need help with tasks that require a high degree of nuance or context. Nadina Guglielmetti summed up what I heard a lot of leaders alluded to, “we are starting small with AI and are focused on getting Web 2.0 right, first”.
Head of Global Commerce &
Retail Media at OMD Global