Top retailers traveled to Las Vegas for Shoptalk this week to get a peek at the latest technology, rub elbows — and, it seems, deliver a warning.
“Change or fail,” said Art Peck, president and chief executive officer of Gap Inc., which itself is in the midst of a radical transformation that will see the company split in two.
Peck was repeating the words of Gap’s late founder, Don Fisher, but the sentiment was widely shared and very applicable to retail circa 2019.
Anil Aggarwal, founder and ceo of Shoptalk, told attendees right from the start of the conference that “reinventing retail is not an option. It is an obligation, a collective obligation to consumers, whether it is physical or digital or a combination of the two.”
“Too much of retail is out of date and needs to transform,” he said. “In 10 years everyone will look back and ask, ‘Did shopping really look like that back in 2019?’”
The show’s goal, he said, was “to get the right kind of people talking about the right kinds of things in the right ways.”
The right people, it turns out, come from some of the industry’s biggest names — including Amazon, Nordstrom, Macy’s, Stitch Fix, Gap Inc., Tapestry and more — who hit the main stage and breakout rooms to talk about what’s next.
Terms like omnichannel and data have been in the retail lexicon for years, but the difference now is that some of these strategies and technologies are no longer emerging. Trends like artificial intelligence and experiential retail have gone from buzzwords to concrete, actionable strategies.
Now, implementing those strategies is the order of the day.
But not every company will take the same path forward.
Wells Fargo analyst Ike Boruchow pointed to fresh approaches from new-era companies such as Stitch Fix, Greats and Madison Reed, new business models and cultural changes from established department stores and companies.
Within those trends are a few points nearly everyone agrees on:
• Forget the hard sell, focus on experience instead.
• Retail subscription and rental models are changing consumer expectations, but don’t fear them; learn from them.
• The need for omnichannel approaches — which treat offline and online retail as a single seamless, universal channel — has gone from strategic advice to an urgent call to arms.
No one is spared from the wave of change. Boruchow noted brick-and-mortar businesses and online retailers “started in different channels and are converging toward each other slowly.” The goal is to give customers what they want, whether Instagrammable moments, personalization or brand values that resonate for consumers.
Tech continues to drive the conversation and the technologies on everyone’s lips at the show included artificial intelligence, virtual reality and visual search.
AI is no longer optional, as companies from Tapestry and Gap to Stitch Fix have dedicated data science teams driving personalization and experiential tactics. VR has been looming for quite some time, but it’s clear that most of retail is waiting for its moment to pounce.
Those who aren’t waiting are serving up some interesting test cases for the industry. Walmart, which has integrated VR headsets into its massive machinery of employee training, is launching VR experiences in its parking lots to promote DreamWorks Animation’s “How to Train Your Dragon,” while Macy’s is using VR to sell furniture. This year might be the pivot point for the tech, as Oculus ramps up to release Oculus Quest goggles to give users freedom to move without the tethers of cables.
As for search, Google and Pinterest debuted new tools for retailers that leverage visual search, at least online.
And momentum is building off-line. Google, which had a booth at Shoptalk as well as a main stage presentation, showcased how visual search can work in the real world, with its Google Lens identifying real-world subjects like apparel.
“Visual search gives us a new super power that we didn’t have before,” Adrian Tout, a strategic partnerships lead at Google, told WWD. “Understanding the world is super difficult. We’re 20 years in text search, where we’ve done a pretty good job, about four to five years for Google Assistant. But then, with Google Lens, we’re one year in.”
The challenge, he said, is not just identifying what’s in an image, computer vision is sophisticated enough to do that. “It can’t understand intent. Intent is harder,” Tout said.
In the Google booth demo, Tout scanned a mannequin wearing green pants, and the device pulled up other green pants that it thought looked similar. But it didn’t know if he was capturing the pants because of its color, its shape, or to see if he was actually looking for things that would go with it. Think of it as the next frontier in shopping by image.
And that’s just one of the many new frontiers for an industry charging headlong into the future.
A sampling of what key executives had to say as they gathered in the Las Vegas desert.
“Beauty shoppers don’t buy by price points. They curate by individual needs.” — Dave Kimbell, chief merchandising and marketing officer, Ulta Beauty
“We arm 4,500 style advisers with omnichannel tools and an entrepreneurial mind-set. They’re our secret sauce. We provide them with their own page online and encourage them to create personal relationships with customers on Instagram. Today when we hire new style advisers, we ask about their social media presence.” — Helena Foulkes, ceo, Hudson’s Bay Co.
“Yes, we have AI and machine learning and have been buzzword compliant since the beginning in 2004.” — Meyar Sheik, ceo and cofounder, personalization firm Certona
“People ask me, ‘How do you compete with Amazon and sleep at night?’ I always answer that I sleep at night like a baby. I wake up every two hours and cry.” — Jim Donald, ceo, Albertsons
“Consumers prove again and again how quickly they can shift to something new. They are doing something different every six months, so building an organization that can change that fast is the challenge for retailers today.” — Mark Rabkin, vice president of ads and business platform, Facebook
“We are transforming the way people find what they love. We leverage data to build a retail experience the way people want to shop. Do customers even look at brands? I am sure some do, but they primarily care about size and fit, which are the number-one preference.” — Chris Phillips, general manager, Stitch Fix
“We’ve focused for the last few years on omnichannel, and as a result, we’ve been recognized as the number-one omnichannel retailer in the country. Our associates are using the same technology in the store that they had 27 years ago. We need to provide them with truly 21st century technology.” — Roger Rawlins, ceo, DSW
“We believe what got us where we are today won’t get us where we’re going, and that without a strong culture, innovation is impossible.” — Celeste Burgoyne, executive vice president of the Americas, Lululemon
“We’re famous for our front windows, but macys.com is our front window now.” — Jill Ramsay, chief digital officer, Macy’s