Shoptalk 2019 Event Recap by J.P. Morgan Merchant Services, Marketing & Insights
Shoptalk 2019 “I Love: Learning, Collaboration, Retail, Creating the future”
The fourth year of Shoptalk did not disappoint with over 8,500 retailers, brands, and providers coming together to define the future of retail. This year’s event was the largest in conference history which made sourcing meaningful insights even more challenging in such a crowded space. Below is a summary of key themes identified at this year’s event.
- Artificial Intelligence (AI) is now and next in Retail. This year’s conference showcased a transition from concept to execution of AI in retail. Many leading merchants are actively using AI today to customize messaging to attain mathematical certainty on awareness, engagement, and conversion rates. Retailers such as GAP and Dell were two of the many on display sharing learnings from their foray into AI and particularly machine learning to drive A/B testing and personalization. Their journey into AI began with the development of a Customer Data Platforms (CDPs) which serves as the “data lake” across regions and channels to draw insights.
- The Future of retail will be a mix of physical, digital, emotional commerce. Given that shopping is primarily an emotional experience and that emotion is a key driver of ad response rate, AI is being used to optimize emotional cognition in real-time. Personalization reaches a level of perfection in 1on1 marketing. Age, gender, and location are not enough to deliver this level of personalization. Real-time behaviors are becoming the impetus to marketing touchpoint/offer to drive up emotion and purchase activity.
- No customer journey is the same. General consensus that client journeys will only get you so far given how nuances and dynamic that journey can be. Traditional “down funnel” marketing models were highlighted as inaccurate in how consumers actually discover and shop for products, often times purchasing across and upwards on today’s digital commerce platforms. Rather, retailers are focusing on the steps in the experience to develop better experiences (cart abandonment, warranty issues, system outages)
- Omnichannel Commerce (it’s just commerce): When stores close down, ecommerce volumes drop from the surrounding areas. Facts like this serve to confirm the deep relationship and power of the offline/online world and the risk associated with developing siloed channel strategies. For many new age retailers, the primary function of the physical channel is to support customer service while the digital channel leads product discovery. Those that blend the two create a personal touch that drives higher conversion and loyalty. Crate & Barrel for example, saw a 76% conversion rate for customers who used their design consultants. Additionally, traditional physical retailers are becoming more aware of the competitive advantages within their product sets and infrastructure to deliver on key customers’ needs such as impulse purchases and “fresh” goods that aren’t being replicated at scale (yet) online.
- “She” remains the target retail customer though she is becoming younger and nuanced in her needs. Retailers are testing the boundaries of their core business with additional services and experiences (i.e. traditional shoe retailer finding success in offering manicure services). Her needs vary by personal and emotional variables and AI is being deployed to dynamically shape offerings across those attributes for the first time. Given that women continue to control 85% of purchasing decisioning, retailers continue to make meeting “her” needs their top priority.
- Amazon remains the 800-pound gorilla in the eyes of retailers new and old: Nearly every session made reference to Amazon as a disrupter, partner, and threat. Retailers are aggressively looking for ways to control their future and engage their customers on a direct basis, but realize the futility of avoiding omnipresent marketplaces like Amazon, eBay, and Walmart. Striking the right balance and level of diversification remains a fundamental challenge for retailers of all sizes.
Where does a retailer start? Retail panelists agree that it starts with a new level of customer obsession and understanding, fueled by tools such as a single CDP (customer data platform) and innovative teams of data scientists and business strategists “who love data”. Panelist expressed the need to combine these two areas to ensure business objectives, driven by explicit and implicit customer needs, serve as the foundation for data models and data insights – not the other way around. Data itself only unlocks a sense of customer understanding, to succeed, an equal commitment must be made to building, testing, and refining the product mix.