The good, the bad and the ugly of Shoptalk 2018
From legacy retailers lackluster messaging to startups in the grocery space, there were lessons on every stage last week in Las Vegas, writes independent consultant Christopher Walton.
Back in January, I wrote a tough love piece on NRF’s Big Show 2018 for Retail Dive, so it's only fair to put the same titular microscopic lens on Shoptalk. This recap is about the show, yes, but also the state of the industry and the industry players who stood out — whether glowingly or ignominiously.
Cutting to the chase, Shoptalk 2018 was fantastic. It exceeded my expectations. It should be lauded. Shoptalk was exactly what the industry needed — fresh dialog — at time when it is needed most.
I left this show energized, but also uncertain of what the future holds. It is clearer now, more than ever, that we have a long road ahead, that technology is moving even faster than we realize, that no one yet has all the answers (especially me), and that the most important thing we can do is exactly what the conference urges — to "talk shop" with the aim of solving our problems together.
My sincerest hope is that the following serious and slightly comic summary will serve to highlight the energy, optimism and the "new normal" set of conflicted emotions I take with me (in a good way) after having spent four days at the best retail trade show of the year.
The good: Shoptalk itself
I was thoroughly impressed with the Shoptalk event setup and leadership team, especially Shoptalk founder and CEO, Anil Aggarwal.
Anil and his team crushed it right from the get go. His opening speech inspired me in a way I have never been inspired at a trade show before. Anil urged exactly what I have chided NRF to do repeatedly — to make the show about education and collaboration. He said something I will never forget: "You are the average of the five people you spend the most time with — find your critics. Getting uncomfortable with uncertainty and failure is essential to winning."
The show was not set up to be a cavalcade of booth envy, but to do exactly what Anil urged — to learn from and to talk to other people in the business as much as one could, almost to the point of frenzy. There were great keynotes, awesome educational track breakouts, time set aside for speed date networking, and long periods of time for breakfast and lunch to connect with old colleagues.
If Turning Leaf is the wine that helps new friends become old friends, then Shoptalk is the conference that helps old retailers become new retailers.
The new frontier of retail leadership
As our industry transforms, it is exciting to see new leaders with the intestinal fortitude to step up, own the main stage, and lead.
Two really stood out — Emily Weiss of Glossier and Chieh Huang of Boxed.
Emily, the CEO of Glossier, which just secured $52 million in its latest round of funding, rocked the main stage. Like Miranda in the Tempest, Weiss embraces the "brave new world" in front of us as well, if not better, than everybody else. "Brands are irrelevant," she said, and she’s right. Customers, from the bottom up, build brands. They are the real CEOs. This fact is scary, yes, but it is our new reality. Omnichannel retail is about giving control, rather than assuming control from the top down. Weiss is the pioneer-savant of customer-led retail. The product-led retail we grew up with is already in hospice.
If Weiss stood out for understanding her customers, Chieh Huang, the CEO of Boxed, did so for showing the attitude retail leaders need to display toward their employees in this new age. Hands down the funniest CEO in retail (seriously, dude could be a standup comedian), Chieh admirably wants to do whatever he can to temper the disruptive implications of technological change and automation. Chieh and his team pride themselves on not using automation as a pathway to labor reduction. Whenever Boxed adds automation within its fulfillment centers, it not only keeps its workforce the same size, but it also retrains and educates staff on how to use the technology, so they can be prepared and trained for the retail jobs of the future.
Fortune favors the bold. Emily and Chieh fit the bill, 100%.
The bad: Walmart’s symbolic love totem
Recode Senior Editor Jason Del Rey’s main stage interview of Walmart’s Marc Lore and Andy Dunn was like watching a train wreck. I couldn’t avert my eyes, and I didn’t want to. I half expected the keystone cops to come bursting through the stage curtains. It was brilliant.
Kudos to Del Rey for asking the tough questions that needed to be asked. He made the session the most memorable moment of the show. First, he asked Lore directly about Walmart’s fourth quarter performance, a question to which Lore’s response conjured up vivid memories of Iceman’s reaction to Maverick in Top Gun, while Maverick explained how he took Polaroids of enemy Russian aircraft while inverted. You know the part . . . cough.
It got even better from there. Two words — love totems. When discussing why Bonobos joined up with Walmart, Andy Dunn remarked that a trip to Arkansas, where he learned that Walmart carried vegan cookie dough in its stores, was the turning point for him in understanding how broad Walmart’s consumer reach actually was.
How sweet (literally). Cookie dough was the infinity band that brought Lore and Dunn together. But here’s the kicker: When questioned about the strategic value and intent of the Bonobos acquisition and others, Lore’s and Dunn’s answers held little substance beyond basic e-commerce assortment growth principles, which may be valuable, but are only short-term growth plays at best.
While I am still holding out hope for Walmart in the next year, the strategic depth in the answers to Del Rey’s questions was just not there. Little progress was shown in Walmart’s strategy articulation relative to what Lore presented a year prior during Shoptalk 2017. The shiny penny may be losing its luster.
Amazon lays a banh mi
I had high hopes for Amazon’s presentations this year. I even called Amazon must-see trade show theater in my 10 tips to get the most out of Shoptalk 2018. But sadly, Amazon laid a big fat banh mi sandwich on us.
Everyone in attendance was salivating like Pavlovian dogs to learn more about Amazon Go. Anil warmed us up like the opening act of a rock concert for Gianna Puerini and Dilip Kumar, Amazon’s two vice presidents on the Amazon Go initiative. But unfortunately, their Amazon Go presentation ended up being so surface level that I needed a can of lemon pledge to feel right about myself again.
The biggest takeaway from Gianna and Dilip came when they were asked what their biggest surprise was so far. "Our customers really like our banh mi sandwiches," they said in response.
There we were, waiting for valuable insight on one of the most disruptive retail platforms in recent memory, and all we came away with was pork belly and jalapenos, sandwiched amid glutinous bread with a delicious cilantro garnish.
Come on people!
If this culinary slice of wisdom tells us anything, it leads me to believe one of three things. Either (1) Amazon is deliberately being secretive and superficial, (2) Amazon Go is the biggest triple deke fake out since the Mighty Ducks ruled Minneapolis, or (3) both are happening simultaneously.
Given the vapid conversation, I am starting to wonder if Amazon Go is even working at all. Amazon said that they have no plans for Go technology in Whole Foods this year and they also refused to confirm reports of additional Go stores this year as well. Until we get confirmation from Amazon on more Go stores or more data on repeat customer usage at Go outside of Amazon employees, I will take my banh mi with the sriracha mayo on the side.
The ugly: Macy’s
Macy’s, Macy’s, Macy’s. Where do I begin?
Macy’s CEO Jeff Gennette took the main stage on Sunday. Some people thought it was great a presentation. Others thought it left much to be desired.
Point of fact — it was a great presentation, back in 2010. The presentation may even have been an improvement over where Macy’s has been recently, but low expectations shouldn’t be the barometer by which we judge success.
It seems people like and want Gennette to succeed, which is great, but we still need more substance. Saying that inspiration, value, fashion and experience will win the day, without giving us a better window into clear needle-moving tactics, just rings hollow. Macy’s mobile plans appear fraught with experience design flaws already, and their Grow 50 strategy will take too long to engender the transformational change Macy’s really needs. While there is truth to Gennette’s Shoptalk message that "Macy’s heritage isn’t going to be enough to guarantee success," his message shouldn’t be confused with a winning strategy either.
Jeff, fellow Stanford graduate, I don’t envy your role. It is hard. It may even be an impossibility. But like Anil said in his opening, find your critics. You need more help, and you need it quickly.
Ocado’s mic drop
Ocado, an online only grocery retailer from the United Kingdom "8-miled" the show, Eminem rap battle-style, giving us a glimpse into a future that is scary, really scary. You need only watch this video of Ocado’s fulfillment center automation and you will see why.
Ocado is the tipping point realization that soon the U.S. grocery business is going to go online. Ocado’s CEO Tim Steiner showed us in intricate detail how his business model works, how automation leads to unprecedented efficiencies and speed, and how the concerns that once made online grocery delivery unthinkable (e.g. lack of profit, small customer bases, generational barriers, etc.) are now all myths, busted and lying dead along the side of the road.
At this future point, retail may not even be the right word for what we do anymore, at least not to describe the core value proposition of physical "stores."
It is only a matter of time until Ocado’s innovations diffuse across the oceans and find their way into our homes. Grocery, the last remaining domino, the stalwart that has held out against e-commerce for so long, is about to fall. Our last remaining "trip driver" to stores will be gone.
Retail stores used to be about five things: Inspiration, convenience, immediate gratification, taction (i.e. touching, feeling, trying things on) and the experience of being somewhere.
E-commerce came along in the 1990s and said, "Stores, you don’t own one through three anymore. We can do it better." If Shoptalk showed me anything this year, from Ocado to voice to visual search to chatbot messaging, it isn’t long before No.4 (taction) will come under siege too, and then all that will remain is the experience and memories of being somewhere.
At this future point, retail may not even be the right word for what we do anymore, at least not to describe the core value proposition of physical "stores." When that day comes, we will all be Mad Max, struggling to make sense of what quite frankly will be a dystopian world compared to what we know today.
So, as Anil says, find your five people now. Find your critics. This world is going to require one hell of a context shift from all of us.