Shoptalk waits for no one, so we are back at it to recap themes and insights that stood out from the second day at the conference (our recap of the first day can be found here).
1. Sustainability: coming more and more into focus
For many years, sustainability was an abstract term for many retailers, with unclear initiatives and impacts due to lengthy time horizons (e.g., 2030 or 2040 goals) that led to a lack of clear ownership within organizations.
While more tangible initiatives are in their infancy – and some organizations have been accused of greenwashing – the emphasis on sustainability from executives at Shoptalk this year is notable. But, of course, much of this mirrors the importance that consumers are placing on sustainability in a more macro sense.
The clearest and most obvious example of this, to date, is the rise of the resale market, most notably the explosive sales growth in luxury goods, which lend themselves well to rebuying.
Patrick Duroseau, Vice President of Enterprise Data Management at Under Armour, observed how AI has tremendous potential to advance sustainability in the supply chain.
As an example, by developing AI-generated models, retailers could develop improved demand forecasting, which would lead to more efficient buying and waste reduction. Modeling could also help identify sustainable materials and reduce steps in the supply chain.
We are at the onset of what is possible related to sustainability in retail, but advancements in technology – along with strong consumer preferences – have this coming into greater focus.
2. Retention of customers…
Amid the current economic uncertainty, we’ve heard several retailers emphasize their focus on retention – and better serving their existing customers – rather than focusing on customer acquisition.
In many ways, this reflects a few different forces:
- Increased customer acquisition costs from channels, such as Facebook, Instagram and Google;
- Loss of access for some platforms to third-party sales data for closed loop measurement; and
- Reduced marketing spend from many brands and retailers.
Jennifer Wilson, SVP of Brand & Marketing at Lowe’s, talked about how brands often spend lots of money at the top of the funnel and the bottom. Still, she wants to emphasize more touchpoints with customers in the mid-funnel to drive engagement and conversion.
Dave Kimbell, CEO of Ulta Beauty, talked about how the retailer is focused on driving multichannel shopping with customers because they found that their in-store-only customers spend 2.5x more with Ulta when they start shopping online.
Customer retention – and serving customers across the different service channels offered by retailers – will be a key focus, particularly as executives evaluate investment opportunities across the business.
3. …and retention of employees
Much like the focus on retaining customers, many retailers are also focused on retaining their employees.
Amid a tight labor market that has resulted in significant wage investments, retailers remain focused on retaining team members through a variety of initiatives.
Marc Mastronardi, Chief Stores Officer at Macy’s, discussed how the company has implemented significant changes in store associate roles, such as making the Store Manager the true “CEO” of the store, with the autonomy to make complete decisions, from staffing and expenses at the store level down to changing the store hours of operation to best meet their customers’ needs.
Furthermore, the retailer is continuously investing in its tools for store associates across its two different role types – “back of house” and “front of house” – to help better serve customers and automate routine tasks.
Of course, Macy’s is just one of many retailers taking this approach, and the large-scale wage investments across many retailers – even at the expense of earnings during the current economic environment – show how dedicated many retailers are to retaining their store employee base.