Shoptalk ’23: Key themes and why they matter for retailers.
Apr 3, 2023
Summary:
- Shoptalk 2023 highlighted how inflation is reshaping consumer behavior, with spending splitting between cutbacks in some areas and strong demand for services and luxury.
- Luxury brands are thriving by investing in digital experiences and attracting younger shoppers like Gen Z, who buy fewer items but spend more on high-value products.
- Retailers are prioritizing technology to remove friction and do more with less, but real success depends on breaking down silos and building a strong cross-company culture.
- Personalization is critical to driving loyalty, as shown by Petco’s shift from transactional retail to a health and wellbeing partner supported by a highly engaged loyalty program.
- The key takeaways for retailers are to invest in digital, remove friction, focus on culture, and deeply understand customers to win their loyalty in retail’s new reality.
Shoptalk, the biggest event in retail and ecommerce that covers the latest technologies, trends, and business models, took place in Las Vegas once again on March 26-29, 2023.
After a whirlwind year for retailers, this year’s event had a lot of ground to cover, and the insights couldn’t have come sooner for brands struggling in tough times and navigating retail’s new reality. If you couldn’t attend, these are the biggest themes from Shoptalk ’23 and why they’ll matter for retail in the year ahead.
Amid inflation, understand what your customers value.
Unsurprisingly, inflation and its effect on retail was a big focus this year. What was surprising, though, was learning about how increased consumer spending has been trending in recent months despite high prices.
According to Michelle Meyer, Chief Economist, U.S., Mastercard, today’s economy has split consumers in two directions. On one side, interest rates are up, and home sales are down. Yet, consumers continue their spending spree, especially on services like lodging, airlines, and eating out at restaurants. The economy is bifurcated. It looks and feels different, depending on how one participates.
Luxury brands are thriving despite inflation. In another chat, Kristen Gall, President of Rakuten, said she sees the luxury industry growing by 50% by 2030 to $640B. How? Luxury brands have achieved big post-Covid growth by significantly investing in their digital experience and attracting younger customers.
Case in point: sixty percent of Gen Z shoppers are buying luxury items, thanks to the rise in digital, where they feel at home. They buy fewer items but spend more because they see it as an investment.
The bottom line is customers want value and the most bang for their buck. They’re also more likely to spend with brands whose values align with theirs, making knowing what matters most to your customers more important now than ever.
Leverage technology to do more with less and win over customers.
If the chatter about digital transformation at Shoptalk was any indication, retailers are eager to innovate and leverage the power of technology to win customer loyalty. Is that easy? No. But, wanting to learn how is what brought retailers to the event.
However, technology isn’t the hardest part. While it’s key to removing friction from the customer journey, the real challenge is getting teams to work together across the organization. To be efficient and deliver better digital experiences, organizations need a true cross-company culture, not siloed IT and marketing cultures. As H&M’s Alan Boehme, who serves as Future Tech Advisor to the CEO, commented, culture can be a great enabler or a detractor.
Once aligned on priorities and customer needs, teams can quickly pick up speed to deliver and address customer friction points.
Not surprisingly, AI/GPT was part of nearly every conversation. Many expressed hope this technology is an opportunity for retailers to understand customers better and meet their needs more quickly. How exactly remains to be determined.
Creating a personalized customer experience drives loyalty.
That said, addressing digital friction alone isn’t enough in today’s competitive retail environment. Consumers expect brands to understand their unique needs, and considering they have many options to choose from, getting it right matters.
Another important theme this year: personalization. A big key to driving customer loyalty is providing a seamless, personalized experience across channels, whether online or in-store.
A great example is Petco, the pet supply company that evolved from a transactional retailer to an interactive guide focusing on pet health and wellbeing. One way they do this is by providing personal touches for key moments along the customer journey (e.g., grooming appointment reminders). And it’s worked—90% of active Petco customers are part of Petco’s loyalty program, Vital Care.
The big takeaway here is that for loyalty programs to work, retailers need to understand customers inside out and inspire them to engage with a brand further.
Get ready for retail’s new reality.
While attending Shoptalk, one thing was clear: Retailers are passionate about delivering value for their customers. This year’s event allowed the industry to come together and learn from each other as we navigate the new retail challenges.
So, what are the biggest takeaways from Shoptalk ’23? Invest in digital, remove friction, focus on culture, and be relentless in understanding your customer. These are encouraging themes for Quantum Metric. Retail is our largest industry vertical, and we work with the world’s leading brands and retailers to identify, quantify and resolve friction points. We are committed to helping you create a culture maniacally focused on winning the hearts of your customers by discovering and optimizing your customer experience.
Interested in learning more? Request a demo today and checkout our Dashboard template library, our newest solution that helps retailers find the answers they’re after, faster.