Making its debut in London and building on the reputation from its much-anticipated annual showcase in Las Vegas, ShopTalk Europe last week in London’s Excel was billed as Europe’s greatest retail show.
With keynotes from leading voices across the retail and FCMG category over a packed three-day schedule, the event promised to provide a deep look into the future of online & offline shopping.
1. Working in a Fundamentally Different Way
Trend takeaway: Brands and retailers must move away from long established ways of working and organise people to focus on emerging growth opportunities, whilst crafting new partnerships to develop capabilities and agility.
Perhaps the most evident thread throughout ShopTalk Europe was the emphasis on retailer-manufacturer structure and cooperation; brands need to work together more effectively to capitalise on the rapidly evolving landscape and rising customer expectations. Whilst this point wasn’t explicitly called out, how brands and retailers’ structure themselves internally and challenge traditional ways of working was front and centre in many of the panels.
This was most apparent during a keynote from Carrefour’s Elodie Perthuisot, when speaking about the retailer’s ambition to be a digital first retail company by 2026, requiring a seismic shift in the way that they organise themselves internally. Gearing the business’ transformation around the pillars of eCommerce, digitisation of stores and data, Perthuisot gave several examples of how this is manifesting all the way down to frontline store colleagues with new digital tools. Tools like live sales, stock data, information, and other mobile solutions which don’t required them to leave the sales floor. Carrefour are on a mission to rapidly overhaul their business and are one to watch.
Both Uber and Carrefour spoke about their commitment in developing new partnerships; Uber stated that this was the cornerstone of the businesses’ growth, allowing the business to focus on their core competencies whilst sourcing capabilities from existing and new partners. Carrefour also disclosed that they’re in a testing phase with select partners to explore the Metaverse, but not just for NFTs and immersive digital storefronts, but as an avenue to recruit stronger tech talent.
Digitally-native grocer, Picnic, highlighted how owning 1st party data without the restraints of a traditional company structure has allowed them to behave differently. Chief Technology Officer Daniel Gebler gave several examples of this, the most interesting being how Picnic use interactions and signals from both digital (search) and physical (doorstep) to identify customers shopping online who might require some additional support.
During a panel on the ‘future of customer marketing’, Lego’s SVP Natali Stojovic pointed that eCommerce shouldn’t be one silo within an organisation since ‘only 6% of customers fail to touch a digital touchpoint in their purchase journey’ - emphasising why eCommerce must be vital within all teams of an organisation.
Finally, Alister Greenwood of Mondelez advocated for a small portion of budget to be set aside for test and learn, to encourage trialling platforms and opportunities such as retail media as they emerge.
2. Mass innovation in ‘Convenience’ and Final Mile
Trend takeaway: Much is spoken about convenience and the focus - particularly in grocery retailing - is speed. However, convenience means much more than this. Brands and retailers shouldn’t lose focus on providing the right assortment and giving customers great availability across all key touchpoints. Brands must think omnichannel.
With an explosion in quick commerce delivery propositions from the likes of Getir and Deliveroo, customer convenience has firmly gravitated towards speed. There is incredible innovation in this area in effectively getting products into customer’s hands.
Frans Muller, CEO of Ahold Delhaize argued that convenience was much more than just speed; customers expect and need relevance, the right assortment and strong availability. Muller spoke about how click and collect for grocery is becoming a prominent driver in the US as consumers begin to favour this over home delivery. And in the Netherlands, grocer Albert Heijn is investigating how to combine door deliveries with general merchandise retailer Bol.com to maximise customer convenience.
Daniel Lundh of Stockholm-based Lifvs, a fully automated and staff-less grocery start-up with a growing number of stores, said that convenience was every bit as much about accessibility as speed. The business has seen tremendous success with fully autonomous smaller store formats in local communities operating 24/7, effectively removing friction for customers.
Tim Steiner OBE, CEO and co-founder of Ocado Group, delivered a fascinating keynote about the group’s efforts in developing automated mega fulfilment centres, scaling up and down accordingly to fit into communities. With several ‘quick commerce’ players recently announcing job cuts, Steiner questioned their profitability in the long-term, pointing out that commercially the Ocado model of upwardly and downwardly scalable ‘big box’ warehouses for speedy fulfilment was far more efficient, sustainable, and viable. He also pointed out that the rising expectation around speed ultimately is at a cost of a smaller range and demands higher pricing.
Showcasing how innovation in fulfilment and stores can coexist, Turkish retailer Migros presented their in-house solution in picking digital orders. Unable to commit to costly automated solutions and lacking the square footage to fit the necessary racking for mass robot picking, Migros instead developed semi-automated shopping trolleys which guide operators to the correct location for specific items where shelves would then light up to speed up the picking process.
Alibaba shared an update on the Group’s Xiaomanlv delivery robots, which has surpassed 10m packages delivered in the country. The robots can carry about 50 packages at a time and cover 100 kilometres on a single charge.
The final interesting prediction out of several of the retailer presentations that really nods to convenience was the rise of predictive commerce; understanding customer buying behaviours and preferences enough to understand the right frequency and assortment of products to ship before the customer has even had to produce an order. Whilst we have subscriptions, these tend to be capped at a certain frequency and fixed around certain products. Several retailers led with predictions that the use of AI and improved 1st party data would allow them to complete larger and more personalised orders based on a variety of data signals and insights.
3. New Ways to Buy
Trend takeaway: There is a lot of noise in the industry on the metaverse and livestreaming; clearly, more developed markets like China are seeing consumers adopt this technology and it offers enormous long-term opportunity for retailers in the UK and Europe. Brands and retailers should experiment to learn and develop their own capabilities but be conscious that many of these new routes to market and customer touchpoints will not scale for several years.
Development and accessibility to technology is giving brands new routes to market and customers a widening breadth of ways to connect with retailers.
Alibaba gave a fascinating look at the role which livestreaming is playing within its business, highlighting its effectiveness as a media channel with 60% of customers clicking through to purchase. Alibaba's Taobao channel generated over $61 billion USD in GMV last year, whilst generating 150,000 hours of content every single day.
Publicis Sapient’s Saba Arab spoke of Chatbots, a smart way to scale exceptional customer experiences in both pre and post-sale moments. Chatbots have been topical for some time now, but the experiences have often been clunky causing customer frustration rather than support. Today, we’re nearing a tipping point in machine learning and AI where the quality of customer interactions are now driving value. Expect to see greater use of Chatbots in 2022 and beyond.
Publicis Sapient colleague, AJ Dalal, ran a workshop on the Metaverse and its practical applications for brands. The thought-provoking session challenged misconceptions and the hype, delivering a resonating piece of advice to attendees - just dive in and test it. Whether it be AR in retail settings, creating digital communities or exploring NFT applications for digital variations of physical products, brands should test while the Metaverse is still in its relative infancy.
Speaking of the Metaverse, one recurring topic for brands and retailers to get to the bottom of was ownership; who should ultimately own this within the business? Over the three days at ShopTalk it’s clear that early adopters are engaging in the Metaverse for a variety of uses; from attending events and experiencing, to shopping, investing and more. As the Metaverse becomes more mainstream we’ll likely see a rise in positions needed brand side to support this growth, think CMO or Chief Metaverse Officer in the years to come.
Krystina Gustafson, SVP of Content at ShopTalk summarised the focus on the Metaverse; “even if the Metaverse doesn’t happen, the technologies used to build it surely will. That alone is a good reason to keep an eye on it”.
Alongside the above trends, it was impossible to not address challenges – and innovation opportunities – transforming retailer supply chains. With supply chains straining under severe port congestion, rising costs and customer expectation around availability, increased technology usage in store and in retailer planning can start to alleviate this.
Positively, much airtime was also given to sustainability; from quick-commerce partners reviewing their packaging, to brick and mortar players looking at their final mile vehicles and reducing food waste, there was a clear push to environmental impact from brands and retailers.
Another strong message out of ShopTalk Europe was that the physical store is far from dead, it is simply evolving. Sephora’s Sophie Moreau highlighted that their stores act as the brand’s social hubs, whilst Lego use their store footprint to delight children and bring products to life through play. Retailers must ultimately explore how they can creative better connections with customers in their physical footprints.
ShopTalk Europe was a fascinating look into the future of grocery, but as a retailer event it was somewhat disappointing not to see any significant nod to the cost-of-living crisis that families up and down the UK are currently experiencing. Yes, speedy deliveries and convenience in paying in cryptocurrency is important to some customers, but millions of families outside of our London and advertising bubble are currently struggling to put food on the table. With so many Publicis’ clients focusing on this audience, I believe it would serve us all well as retailers, brands an advertisers, to be a bit more customer centric going forward.