Four Key Trends Observed at Shoptalk Europe 2017
Euromonitor attended the inaugural edition of Shoptalk Europe, which took place in Copenhagen on 9th – 11th October. Disruption was the key theme of the conference and presenters throughout the event discussed how technology was changing the way consumers interact with retailers and how the shopping experience has evolved across the continent.
Artificial Intelligence (AI) has arrived
Although it is still an emerging technology, many future oriented retailers are already seeing the opportunities provided by AI and have started incorporating the new technology in both store based as well as in the online retailing landscape. In fact, Richard Hearn of IBM Watson predicts that by 2020, 85% of all interactions will happen without a human. Ronan Harris, Google Managing Director – UK & Ireland, demonstrated their AI based voice assistant Pixel Buds, which besides ability to give directions, access music and messages, can enable the user to get real-time translation. Google is shifting from being a mobile first company to being an AI first company. AI enables a conversational and sensory engagement for people and technology; “it should be ambient and multi-device, thoughtfully contextual and they must learn and adapt” claimed Ronan.
Chief Product Officer, RJ Pittman, from eBay, highlighted that smarter commerce is a top priority for eBay as well and AI is put as central focus point to make it happen. “The curve is steep but the opportunity is extraordinary. So we’re going to start climbing; we’re right at the precipice of a transformational inflection point”. He expects that in the coming two years there will be more AI progress than in the past 30 years combined. Many speakers at Shoptalk Europe had no doubt that AI will make a significant difference for consumers’ shopping experience and provide more efficient search opportunities. It will enable retailers to better understand customer needs and take more tailored actions with respect to different decision making processes starting from building the product range, marketing activities and ultimately engaging with the consumer.
‘All channel’ is the new ‘omnichannel’
Omnichannel was one of the hot topics during Shoptalk Europe 2017. With consumer behaviour evolving, a ‘seamless experience’ is the norm expected by consumers and retailers have to react accordingly. It is no longer enough to provide one and even multi-channel experiences, retailers have to focus more on an integrated omnichannel approach that provides a seamless experience whatever the format the customer is engaging through – whether it be a physical store, mobile app, website, social media etc. Terry von Bibra, Alibaba General Manager Europe, during his presentation said: “Consumers all over the world have one single view – they do not care about online and offline. Consumers say I have a need and I want to engage with the brand or consumer retailer, who gives me the best possible selection, price, convenience and experience to resolve in the positive way my want or need. And that is nothing to do with online and nothing to do with offline.”
It is not just about whether an online retailer should open an offline store, or vice versa, it is about creating a coherent and seamless system that will create positive consumer shopping experiences. Even though there is so much talk about the online platform, retailers should not forget that by 2021 more than 80% of sales will still come through store based channel, according to Euromonitor International data. CEO of Hudson’s Bay Company – Jerry Storch was one of those at Shoptalk who emphasised the importance of physical store and claimed that the winners will be all-channel retail brands. Many speakers highlighted the importance of retailers adapting to demanding consumers, who during their shopping trip are engaging with many different channels. However, the important message is for a retailer to be authentic and not to lose their identity by trying to appeal to a consumer group whom is not their target audience.
Keep it personal
Consumers are more willing to provide data but expect to be marketed to in a personal way – “a market of one” as eloquently put by Stephanie Phair, Chief Strategy Officer of Farfetch during an engaging panel discussion on how to reach millennials. Consumers are forever researching their next purchase, often without realising it, through the wealth of information that they have at their disposal – Seb James, Group CEO of Dixons Carphone, explained how their consumers typically will start researching 90 days before they actually make a purchase. Pinterest, a visual discovery tool founded in 2010, are a beneficiary of the pre-purchase research trend with the platform designed to help consumers ‘plan the everyday through visual discovery’. President Tim Kendall informed the audience of Shoptalk Europe how their platform is introducing new consumers to brands they had never previously heard of “it’s unlikely you would be familiar with brands of baby cribs before planning for a family, but you’d discover them all on Pinterest”.
Personalisation is now possible across a host of products; from baby cribs to trainers and even your muesli thanks to German start-up Mymuesli. Consumers want purchases which are personal to their lifestyle and interests and are willing to sacrifice their privacy for convenience. eBay spoke about a Japanese fashion house which is hiring AI scientists to predict what shoes consumers will want in the future before they know it themselves using predictive software that analyses social media data. The clear message from Shoptalk Europe is that retailers need to personalise both their marketing strategy and product offering in order to engage with savvy consumers in the future.
There was plenty of futuristic ideas presented of how stores might look in the future with the path to purchase expected to be much more wide-ranging than it is today. Alibaba are one of the trailblazers in the world of retail and have demonstrated what is possible by trialling a host of new concepts in China, ranging from stores with no cash registers (Tao Café) to hyperlocal food markets (HEMA) which allow consumers to pre-order a meal in-store and have food delivered at home in the same transaction.
Although there is a lot of buzz around online shopping and the exponential increase seen in mobile commerce sales, the shift in consumer behaviour goes beyond this, with the ‘experience more’ trend (as identified by Euromonitor International) occurring frequently in new retail concepts. Willhelm Oehl of Eight Inc (an architecture firm famous for designing the Apple retail stores) spoke of a retail space they designed for Shimano in Singapore which has no products for sale but received more visitors than the Singapore Sports Museum – attracting a brand new audience for Shimano to sell their bikes to. Martin Wild, Chief Digital Officer of MediaMarktSaturn discussed their digital transformation and how new stores in Eindhoven and Wilrijk welcome visitors with a robot which transport orders from the store to the cash register allowing consumers to try out new games via VR headsets, witness chefs demonstrate the latest appliances and even taste chocolate from a 3D printer. It is part of the push towards experience-led retail which retailers hope will provide a compelling reason for consumers to visit stores.
What will retail look like in 2018?
2018 will undoubtedly see more progress made in AI, VR/AR, robotics and more, retailers need to ensure they are in a position to adapt to fast-moving trends in order to keep pace with the demands and expectations of the ever-changing consumer.