On November 18th, RETHINK Retail hosted their November Small Groups Mixer, a monthly virtual event catered to all of 2022’s Top Retail Influencers (TRI). This month attendees discussed a range of topics including Immersive Commerce, Technology Innovation in Retail Leadership, Restaurant Transformation, and Automation, and Takeaways from Walmart and Target’s Q3 Earnings Report. Here, we’ll explore these topics and additional insights from the Mixer with the help of a few of our outstanding influencers!
Michael Zakkour — Immersive Commerce
First on the agenda was the “Metaverse,” which I described as confusing, open to interpretation, divisive, and does not adequately explain all the changes coming to the eCommerce, physical stores, and digital retail realms, especially what is possible in the now.
Next up was Immersive Commerce, an important part of the evolution of and integration of retail across both online and offline channels, and is a key to graduating from Omnichannel to Unified Commerce. Immersive commerce includes AR/ER/VR/Early Metaverse Worlds/Livestreaming Commerce/Composable Experiential Commerce/Spatial Worlds as it turns 2D, flat, reactive online commerce into interactive, spatial, and social shopping.
Shish offered that Immersive Commerce is a journey that brands and retailers should take in an incremental manner. There are steps to be followed—some of which include converting 2D product catalogs to 3D, creating digital people, incorporating AR/VR, crypto and token payments, social, and making immersive 3D environments.
This raised the question: where does interactive commerce end and immersive commerce begin? Livestreaming commerce, for example, straddles both.
Melissa Minkow raised a point about measurement and KPIs. “How much of this is about purchases? How much is about brand activation and experience versus “commerce,’” she asked.
According to Jeff Roster, a hybrid of this technology breeds innovation. He loves the term Immersive Commerce because he doesn’t want to fight the war over the meaning or viability of The Metaverse. It’s time for industry veterans to “think younger,” he said. This is consumer-driven change.
Brendan Witcher advised that whatever is done in the immersive commerce space has to be focused on adding value for the consumer.
And last but not least, Peter suggested that Rethink Retail produce a “Lumiscape” and “LENS” and map to Immersive Commerce. Explain what each element is and what are the adjacencies, journey, steps, and expected outcomes.
Carol Spieckerman — Takeaways from Walmart and Target Q3 Earnings
Released one day apart, the one-two punch of quarterly results from Target and Walmart are always eagerly anticipated. The Q3 2022 results released by both retailers this week exemplified the complex challenges all retailers are facing, along with important differences.
Our group’s consensus was that both retailers are built to last due to solid fundamentals and strong leadership. For the short term, less-than-desirable inventory levels, margin dips, and softness in discretionary categories plagued both, with Target taking the brunt.
Rick Watson summed it up nicely as “mix and margin” (or what Walmart referred to as “unfavorable mix shifts” in its Q2 report). In other words, low margin groceries are great, but only when it drives traffic that translates into sales in more profitable categories like apparel. On that front, Georganne Bender and Marie Driscoll cited shoddy in-store merchandising, sizing inconsistencies, and dowdy fashion choices as unforced errors that are curtailing profitability in mass retail and department stores (it’s not just inflation, folks).
Walmart’s diversification, notably its ad business, continues to provide a profit-building hedge against the product-side headwinds, as does its Sam’s business. The group noted major improvements in shopper access, experience, and convenience on the Sam’s side.
Karl Haller reinforced the advantage of both retailers having multiple revenue streams. Concerns that discounting has gone too far were universal, with Shlomo Chopp stating retailers are “in a war of attrition.” Greg Buzek riffed on additional margin-draining factors including store fulfillment (labor intensive), lack of automation (ditto), and online returns.
Labor shortages are having a ripple effect that hinders retailers’ aspirations to optimize store experience. On the tech front, the group agreed that massive tech sector layoffs from the likes of Twitter and Amazon give Walmart and Target an expanded talent pool to draw from even if some techies may not see retail in their future.
Looking ahead, Rick Watson speculated that both retailers’ failure to provide 2023 guidance might portend extended uncertainty.
Nikki Baird — Technology Innovation in Retail Leadership
Nikki Baird, VP of Strategy at unified commerce solutions provider Aptos, led a discussion around the latest in retail IT investments and decision-making; posing the question of if the pendulum is swinging back to IT leaders as advisors on tech selection with modern architecture in mind to support execution on the company’s business goals (versus a time when cloud led to retail leaders going rogue).
The group had to share the unfortunate truth of remaining setbacks, such as:
- Business cases are broken – we “know” a lot from data, but leaders aren’t good at parsing through it, and can’t figure out how to turn that data into a yes/no for strategic decision-making.
- There are still too many silos — fighting for budget dollars pits IT and other retail leadership against one other instead of working towards common goals.
- Companies don’t understand that all tech can be useful. It’s how they use it that makes it a success or failure…There’s a difference between “opening a store” and “having the right strategy for opening a store,” for example, and tech is the backbone of this execution.
Ricardo Belmar and guest Ira Gleser — Restaurant Transformation and Automation
In our restaurant transformation group, we talked about how the consumer is really driving the guest journey in this industry, having embraced digital tools and media during the pandemic to engage with their favorite restaurants.
The challenge for restaurant chains is to meet the consumer where they are and deliver a great brand experience regardless of whether their guests choose to dine in, have their order delivered, or picked up curbside.
We also talked about loyalty programs and what offers will resonate most with boomers, millennials, etc., along with the opportunity for chains to gain deeper insights into their consumers with their data and create personalized campaigns and promotional offers that will resonate with their guests and drive visit frequency and brand loyalty.View Original Article