S2E9 - Top 10 Predictions for 2023

It’s a new year, and after wrapping up another NRF Big Show, we felt it was time to share our Top 10 Predictions for retail and retail tech in 2023! What will retailers focus on this year? How will consumer shopping and buying habits change? From the evolution of retail media networks and loyalty programs, to web3, the metaverse, and ChatGPT, what technologies make the cut and deserve your attention? Hosts Ricardo and Casey cut through the clutter and give you their top 10 trends for 2023 in this episode. See if their predictions match yours and let us know on LinkedIn!

Plus, our new segment, Retail Razor Data Blades returns, with another special data insight from Georgina Nelson, CEO of TruRating, learned from their 100,000’s of point-of-sale customer survey polls. In this episode learn how aligning with consumer values still plays a critical role in consumer buying decisions!

News alert #1: The Retail Razor Show was a finalist for The Retail Voice Award at the Vendors in Partnership Award ceremony during the NRF Big Show 2023!

News alert #2! We’ve moved up to #18 on the Feedspot Top 60 Best Retail podcasts list - please consider giving us a 5-star review in Apple Podcasts! With your help, we’ll move our way up the Top 20! Leave us a review & be mentioned in future episodes! https://blog.feedspot.com/retail_podcasts/

Meet your hosts, helping you cut through the clutter in retail & retail tech:

Ricardo Belmar, a RETHINK Retail Top Retail Influencer for 2023, 2022 & 2021, RIS News Top Movers and Shakers in Retail for 2021, a Top 12 ecommerce influencer, advisory council member at George Mason University’s Center for Retail Transformation, and director partner marketing advisor for retail & consumer goods at Microsoft.

Casey Golden, CEO of Luxlock, and a RETHINK Retail Top Retail Influencer for 2023. Obsessed with the customer relationship between the brand and the consumer. After a career on the fashion and supply chain technology side of the business, now slaying franken-stacks and building retail tech!

Includes music provided by imunobeats.com, featuring E-Motive, Overclocked, and Tech Lore, from the album Beat Hype, written by Hestron Mimms, published by Imuno. 

The Retail Razor Show

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Host → Ricardo Belmar,

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Co-host → Casey Golden,

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Read my comments on RetailWire - https://bit.ly/RWCasey

TRANSCRIPT

S1E9 Top 10 Predictions for 2023

[00:00:00] Ricardo Belmar:

[00:00:20] Show Intro

[00:00:20] Ricardo Belmar: Hello and welcome to season two, episode nine of The Retail Razor Show. I'm your host, Ricardo Belmar.

[00:00:26] Casey Golden: And I'm your co-host, Casey Golden. Welcome retail show listeners to retail's favorite podcast for product junkies, commerce technologists, and everyone else in retail and retail tech alike.

[00:00:38] Ricardo Belmar: Well, Casey, this is the moment many of our fans have been waiting for.

[00:00:43] It's time for our top 10 retail predictions for 2023, and as a huge bonus, we are recording live and in person in New York City right after the end of the N R F big show. We're literally sitting face-to-face and we never get to do that for this show.

[00:00:59] Casey Golden: never, I [00:01:00] mean, we're always sitting face to face from the shoulders up, 

[00:01:02] Ricardo Belmar: and a little square on a screen, but,

[00:01:06] Casey Golden: I can't think of a better way to wrap up NRF than sharing our hot takes live.

[00:01:10] Ricardo Belmar: Absolutely. We don't often get to do this live and in person.

[00:01:13] Retail Razor Data Blades - "How aligning with consumer values still plays a critical role"

[00:01:13] Ricardo Belmar: But first, it's time for the newest segment of our show Retail Razor Data Blades, where we talk real world numbers and slice through measurable consumer insights. It's a bit like, show me the math so I understand where this data's coming from and bringing us that slicing and dicing of data is Georgina Nelson, CEO of TruRating.

[00:01:30] TruRating is changing the way retailers track how customers feel against how they spend with an innovative multi-channel feedback solution with an average of 80% response rate from consumers. Georgina will share with us some key data points and offer a bit of insight into what's behind those numbers based on their extensive customer survey data at the point of sale.

[00:01:48] Casey Golden: Welcome, Georgina.

[00:01:50] Georgina Nelson: Thank you so much for having me!

[00:01:52] Casey Golden: So today's Retail Razor Data Blade segment is "how aligning with customer values still plays [00:02:00] a critical role".

[00:02:01] Georgina Nelson: So, yeah, to that point, we wanted to really find out what was driving consumers loyalty behavior. As you know, as a time when retailers are, are feeling the, the pinch of inflation as of their shoppers. You know, we can often get to this race to the bottom where prices are slashed in desperation to, to try and win that customer loyalty.

[00:02:25] And so we, we asked some simple questions as to what was driving that loyal behavior. Interestingly, we found just over smidgen, over 50%, so 51% of consumers said they were influenced by their loyalty card and by money off vouchers. , but a staggering 77% said what actually drives their behavior and their loyalty is whether their retailers' values resonate with them and they affiliated with it.

[00:02:56] And so I think in this modern time of loyalty, [00:03:00] you know, that sends a really clear message for retailers to understand what values do their customers really affiliate with and how can they market those to them and ensure that that's understood and really build that, build that bond with their consumer base.

[00:03:17] Casey Golden: Yeah, really backs up the, you know, communicate your brand and your values. Stop talking about price.

[00:03:24] Georgina Nelson: Yeah. Yeah, exactly. And you know, even just recently, we've still seen that over 75% of US consumers. They do want to buy ecologically sound products. They do want to buy organic when those choices are available. And so it's really to retailers, you know, don't scrimp on these initiatives just because times might be toughed because consumers are still are looking for those.

[00:03:50] And looking for that stance in values to make their choices.

[00:03:54] Casey Golden: Yep.

[00:03:55] Ricardo Belmar: Georgina, it seems like for this to really be [00:04:00] beneficial for the retailers that are going to, like your data, is suggesting that they need to lean into this and, and not stop investing. They'd have to really understand how to communicate that to their customers to, to make it really worthwhile and beneficial.

[00:04:14] Georgina Nelson: Yeah, I, you know, I think strategies need to be, it's not like a blanket one, one email, one shot in the dark. We really need to have a nuanced understanding of the customer base and what drives that loyalty. And then that needs to be communicated across a website, across product placements, across brand messaging.

[00:04:36] And I think what's important is that, you know, all customers are not alike. You know, there's gonna be a mix. And what we see is that mix is more, you know, is obviously very prevalent at a store level. In terms of each store is a snowflake with different customer segmentation and really beginning to understand that at a store level, how you know, and testing and asking [00:05:00] customers now how have your, you know, have they understood the green initiatives which you are pushing?

[00:05:07] Do they understand the drive on organic produce in, you know, understanding that awareness and then being able to tailor. Better coms and better marketing is absolutely key. And and we recommend doing that at a granular store level.

[00:05:23] Casey Golden: I couldn't agree more. Well, that does it for another edition of Retail Razor Blades.

[00:05:28] Georgina Nelson: Does this mean I get to keep the segment intro music every time? I'm on the show.

[00:05:34] Ricardo Belmar: I, I think we can arrange that

[00:05:36] Georgina Nelson: Thank you so much both.

[00:05:38] Casey Golden: Absolute pleasure.

[00:05:39] So now let's get right to those predictions. Ricardo, what would you say there are any underlining themes that we'll see across our 10 predictions?

[00:05:53] Ricardo Belmar: Yeah, I think there are at least two big themes. One would be the impact of the economy, of course, [00:06:00] that's having on retailer investments and consumer shopping habits, and I think the second is frankly, gen Z.

[00:06:05] We'll see how Gen Z's shopping and buying habits are gonna have a bigger impact this year than they have in past years.

[00:06:11] Prediction #1 - Private Label take over

[00:06:11] Casey Golden: Let's dive into number one. Private label is taking over our shelves. You all know that I love a good brand and I'm a label of label lover, but a lot of products have become brand neutral with the help of the homogenization of marketplaces, like Wayfair and Amazon marketing convenience over the brands that they carry. Many private label brands are actually in our cupboards without even knowing it.

[00:06:41] Margin is king, especially during these uncertain economic environments. Retailers need the most control over the product assortment and the bottom line. Finding a lot of Gen Z doesn't have the brand loyalty in CPG that a lot of other generations do. 

[00:06:58] Ricardo Belmar: yeah, I think that's [00:07:00] probably a key one right there too. Especially after a year of inflation consumers want lower cost options, but everyone still wants high quality. Nobody wants to go down in price and then get something that's just too cheap and not good enough. But I think the big difference that you just pointed out, it's, gen Z doesn't seem to care about brand loyalty, especially not with, with CPGs, might be a slightly different story if we're talking apparel or home goods. But I think at the end of the day, unless you're buying on the high end luxury side of home goods, most people don't care what the brand name is on it. It's just whatever looks good and feels good to them. When it's apparel, it all depends on who we're talking about.

[00:07:35] Department stores for sure, probably would love to have a third of their sales or more be their own private labels, but the fact is a lot of 'em haven't traditionally been good enough for most buyers, but Gen Z doesn't seem to care.

[00:07:46] Casey Golden: No. I mean, gosh, Shein did like a billion dollars in sales 

[00:07:49] Ricardo Belmar: yeah, exactly.

[00:07:50] Exactly. So , so, so what does that say? So yeah, I think that that's a, that's definitely a, a good number one to kick off the list. 

[00:07:58] Prediction #2 - Retail Media Network evolution 

[00:07:58] Ricardo Belmar: So let me take us to number two, [00:08:00] which for me is, is a big one. And everybody knows I love talking about this topic, and that's retail media networks and how they're gonna evolve. 

[00:08:07] This year it's all gonna be about the, in-store media experience and how that gets combined with all the digital channels to really make a, a good end-to-end media experience that retailers can sell to brands. So, everyone likes to debate this a little bit because it seems like a trend and yes, we all know that Amazon has the majority of the share, but the fact is even if a retailer can get one percent, of this total media network share.

[00:08:33] Those are big numbers and, and they're big numbers that come with big margins, so it really is helpful.

[00:08:39] for a

[00:08:40] retailer, and if, if we look at some relevant context to this, I mean, you've got a lot of things that are going on that make this special. I mean, one, there's all the first party data that retailers are getting from these media networks, and that's huge.

[00:08:51] That lets them deliver really strong return on the a on advertising spend, right? Good ROAS for the brands. And one of the things we heard during nrf, that's a [00:09:00] big trend on this that I a hundred percent agree with. You know, you've got a decline in TV advertising in general. We've got cookies going away and, and we've got just in general, right, the digitization of the store.

[00:09:10] All this stuff kind of combines to make it super attractive to actually put media bys and advertising at the point at which a customer makes a buying decision. So why would this not increase?

[00:09:22] And there's even, I think more from that, I mean, you know, people also like to debate where is the, where are these dollars coming from?

[00:09:28] You know, brands look at all these media networks and as a brand say, oh, do I have to spend now on 20 different retail networks in addition to all the other ads spend? I have? Well, well, maybe they do, but the truth is right, they're gonna shift the spend a little bit. So it, the, the answer is, you know, when you ask where do the dollars come from?

[00:09:43] Well, pretty much everywhere else, it's not a retail media network. But I think probably the biggest threat is to Facebook or Meta and to Google because it's their ad dollar spend that's gonna go to these retail media networks, Amazon and everybody else.

[00:09:54] Casey Golden: 100 Percent. They're already, brands have already and been shifting these [00:10:00] budgets and not by a hundred thousand dollars, but like numbers.

[00:10:04] 875,000 for those month

[00:10:06] Ricardo Belmar: it's big numbers. It's big numbers. And when you roll in, the more advanced networks, they're gonna have tie-ins to streaming tv. They're gonna have connections into, players like Netflix, Hulu, and everybody that are gonna tie into it.

[00:10:18] And it's all comes down to audience data, right? And, and when you start applying this in-store, let's remember that 85 percent of all retail sales still happen in stores. So this isn't just an e-commerce play anymore. This is about doing what, you know, Doug Stephens and others used to talk about the store as, as theater, the store as media.

[00:10:36] Well, this is the year that we're really gonna start to see that because of these retail media networks and, and I think the last thing I'll add to it is, The end goal isn't just, I think the media network. The end goal is for the retailer to introduce a collection of B2B services. They can sell to brands or, and even to other retailers.

[00:10:54] So, sure, Walmart's the obvious first one to do it because of their size and scale. But that doesn't mean that, Best [00:11:00] Buy, couldn't do it or, or any other large enough retailer couldn't take exactly what they're doing in these services, bundle 'em up and sell 'em as a package. They're gonna have so much more first party customer data.

[00:11:11] Every brand wants access to that.

[00:11:13] Casey Golden: I agree. And everybody's spent a lot of money over the last decade on creating their audience and all of their customer data. So this is just another monetization strategy that they can go ahead and not put it all just into the individual products that they're selling.

[00:11:29] Ricardo Belmar: That's right, that's right. And, and I'll just repeat again, one reason why I think this is such a, a major thing for the year, the margin is better than just selling products to consumers. So while it might not be, you know, it might only be a fraction of your total. Sales volume, it comes with a good margin.

[00:11:45] So it just helps the financials for the retailer. 

[00:11:48] Prediction #3 - Returns management is a top IT investment

[00:11:48] Ricardo Belmar: So speaking of things that help the financials for the retailer, let's go on to number three. And I think that's all about returns management becoming a top IT investment. [00:12:00] Particularly powered with AI-based solutions because every retailer has an issue with returns right now.

[00:12:05] It's not just because of of growing e-commerce buy, it's because it's just the new habits that consumers have had to buy more than what they need in return, what they don't after they decide. But this has caused massive logistics challenges for retailers. Huge cost impact. And it's one thing to say we just need to get consumers to not return things.

[00:12:25] But the fact is you can't just change those buying habits for, for consumers, you need to really look at it and say, well, what can I do to prevent the cause of the return in the first place? So, yes, we all know that this is hardest to do in apparel because we still have issues with fit. There's new fit tech coming around.

[00:12:43] We've seen some players in that. More and more of that is gonna be made available until that gets solved it's gonna be a real challenge to, to improve this situation in apparel. But if we look at any other product category, I think the key is retailers investing in solutions that are going to help them understand why the [00:13:00] returns are happening and then make adjustments.

[00:13:01] And it might even be in some cases, as simple as your product page description on your e-commerce isn't good enough. And people are buying it by, because without realizing it's not what they want in the first place,

[00:13:11] Casey Golden: a hundred percent better images, I'm seeing more 3D images, I'm seeing more videos available on the products. And I think that was pretty much the, one of the main topics that I heard from over the last week has all been about returns.

[00:13:26] We need to control our returns, we need to reduce our returns. And I think, you know, we still have to remember, too, every single time that package hits the doorstep and we pick it up, we get a dopamine hit, We really don't need what's in the box. We just wanted that dopamine hit. So there's, you know, there's that, too, 

[00:13:45] Ricardo Belmar: too there's, that too. 

[00:13:45] Casey Golden: some consumer buying behavior here that has caused some, a little bit of package addiction.

[00:13:50] Ricardo Belmar: Absolutely. And that has a, a huge sustainability impact. So as we see retailers lean in more into sustainability issues and control than ha controlling that [00:14:00] returns problem is a big, big part of their sustainability process.

[00:14:04] So, so that's definitely, I think gonna be a huge, again, huge area of investment is this.

[00:14:08] Casey Golden: Yeah. If you're a brand or a retailer and you have a a 35% online return rate, you're not alone

[00:14:15] that's right, 

[00:14:15] Ricardo Belmar: that's right, that's right. And, and that's, you know, at the risk of the new pun intended, but it's just not sustainable to keep having those high return rates.

[00:14:23] Casey Golden: Not unless you got a 60% conversion rate.

[00:14:26] Ricardo Belmar: Exactly. Exactly. 

[00:14:27] Prediction #4 - Store Automation for Frontline Workers 

[00:14:27] Ricardo Belmar: So I'm gonna move on to number four. Continuing this little mini theme on where the investment dollars are going and technology, let's talk about store automation and how that's going to help frontline workers and store operations. Why?

[00:14:40] Because the, that labor shortage retailers have had this past year. It's not going away. It's not going away this year. There's still an issue of you don't have the staff that you want, which means you need that store team to be more efficient in what they're doing, more productive, but you also need to retain them.

[00:14:55] And retaining them means you need to make the environment better and and more [00:15:00] interesting, more enjoyable for them. So what are you gonna invest? When you're gonna invest in technology? Is it help get rid of all those mundane tasks that everybody doesn't want to do because they're not complicated, they're just kind of routine and they're tedious.

[00:15:12] Find ways to automate and get rid of all, all

[00:15:14] Casey Golden: mine. We all wanna walk the aisles and do a price change.

[00:15:18] Ricardo Belmar: Exactly. Which, so, so things like electronic shelf labels comes into play here? I mean, that's not even a new technology, right? It's been around for a while, but because of the cost, no one's had a motivation to put it in.

[00:15:29] Now we're starting to see a lot more interest in that because it takes that job away from the store team so they don't have to deal with it and they can do more work in front of a customer. Workforce management, right? More investment in shift management. Let your employees manage their schedules.

[00:15:42] That's what every store team employee wants is flexibility in their schedule. Just give it to them. Put the tools in place, let all your store teams work with a mobile device, have the right tools on it. And then there's new things. We, we've talked on this show before about store associates leading your live streaming efforts from the store, especially in [00:16:00] smaller retailers.

[00:16:00] There are plenty of associates who are good at this and who probably already have their own livestream effort on YouTube or something on their own time. So why not take advantage of those skills, put those skills to work, which by the way, is gonna make that job more interesting.

[00:16:14] Exactly. For those story searches. Yeah.

[00:16:15] Casey Golden: it, it makes it a longer job retention because what used to be like, well, I'm gonna do this for a year. It turns into potentially five years and moving actually into your marketing department, 

[00:16:27] Ricardo Belmar: right? Which gives you a career path. And the whole goal is to make those jobs, not just jobs, but to turn it into a career path so that this is an area and a field that people want to work in now.

[00:16:38] And that's is gonna start with this, this new level of investment in these technologies this year.

[00:16:42] Casey Golden: I agree. I sure know. I expect people to know about the product when we walk up to them. Can't do that if they, they don't 

[00:16:50] Ricardo Belmar: it. Absolutely. And they gotta have access to the data and the information or, or they, they're, you can't expect them to know everything as the retailers, so you gotta put the information

[00:16:58] Casey Golden: Yeah, it's gotta be fine.

[00:16:59] Ricardo Belmar: [00:17:00] Accessible. Exactly. 

[00:17:02] Prediction #5 - BNPL explodes even more

[00:17:02] Casey Golden: B N P L. 

[00:17:04] Ricardo Belmar: Number five 

[00:17:05] Casey Golden: Explodes or implodes. We'll see. But this holiday, B N P L got a big boost mostly from Gen Z. Regulators have started to look into this in 2022, but the debt this is causing could potentially, catch up in 2023. But we're seeing that they are expanding their businesses beyond their core, buy now, pay later product by launching new revenue channels, implementing new solutions, or even making new acquisitions.

[00:17:41] To become more than just a BNPL, but to be a marketplace, to be managing customer acquisition and getting more brands and products through as a connection point, I think we'll definitely also see more sustainability and wellness for financial literacy and, and [00:18:00] financial wellness tools to increase that engagement and, you know, potentially mitigating some of the regulatory concerns.

[00:18:07] But I think we'll, we'll definitely see something here mature as a product and a, and a space in general and could be a better opportunity for more brands to actually be exposed to some new customers and customer acquisition much like a, a marketplace.

[00:18:27] Ricardo Belmar: Yeah, I think that, I think that one makes sense. And there's definitely, you know, again, that Gen Z connection o over the holidays for this one. I, I think you're right. We, we kind of predicted that last year.

[00:18:36] It didn't totally happen the way we thought it would or as quickly as we thought. So I think it's, it's fair we're kind of shifting in a little bit to this year because it, it's just inevitable at this point. I, I think the more this grows, the more attention it's gonna get, the more of the financial stability issues matter for consumers. So it's gonna get looked at. And I think to their credit, right, the BM p l providers that they know this is coming and that's why they're all [00:19:00] kind of protecting themselves at expanding beyond that core. Like you said, Casey turning into marketplaces,

[00:19:05] Casey Golden: they've changed their narratives. 

[00:19:06] Ricardo Belmar: Yeah.

[00:19:06] I mean I think at the end of the day you can kind of say buy now, pay later in of itself probably wasn't an entire business, it was a

[00:19:13] Casey Golden: It was

[00:19:13] feature. so Right. 

[00:19:14] Ricardo Belmar: gotta be part of something else and, and that's what drove a lot of those acquisitions.

[00:19:18] Casey Golden: it was a feature, not necessarily the, the

[00:19:20] Ricardo Belmar: Exactly.

[00:19:21] Casey Golden: And just coming outta holiday, we've got a, and then going into what many would associate as like a recession or an economic downturn. There's a lot of debt sitting out there. There's multiple players.

[00:19:34] Ricardo Belmar: Yeah. 

[00:19:35] Casey Golden: So 

[00:19:36] Ricardo Belmar: definitely, definitely.

[00:19:37] Prediction #6 - CDP explosion

[00:19:37] Ricardo Belmar: All right, Casey, bring us to number six. 

[00:19:40] Casey Golden: Well, it's 2023 and everyone's a C D P. A term that, there was a few of us that knew what A C D P was, you know, three years ago.

[00:19:49] Now its seems to be everybody is a C D P. . And at the same time, nobody knows what a CDP is.

[00:19:54] Ricardo Belmar: is. . That's right. . It's so true. That's so true.

[00:19:57] That's so true.

[00:19:58] Casey Golden: So everyone [00:20:00] is, you know, essentially brands are continuing to build their own from scratch. While the marketplace landscape creates more sophisticated products these consumer data platforms create a persistent, a more unified consumer database and make this data accessible to other systems.

[00:20:16] Really pulling in from all of these multiple sources, being able to have this, single customer profile and really be able to manage consumer data to support compliance and governmental regulation requirements. This is definitely becoming a bigger and bigger concern over privacy and security, consumer data loss and, and protection in general.

[00:20:37] It's definitely a high priority for all retailers and brands right now, and even SaaS companies that are processing consumer data. But I think here is where we'll also see a big uptake in more productized solutions coming in with different AI and ML use cases that can be powered [00:21:00] because of the efforts going into scrub all of this data and create these, single API to be able to access it.

[00:21:10] And I think it's gonna be able to drive a lot of personalization going forward.

[00:21:16] So I am very excited about this trend.

[00:21:19] Ricardo Belmar: Yeah. I, I agree. I agree. And I think you're, you're absolutely right that that , while everybody's either wants to be a CDP or claims to be a cdp, there's still a lot of confusion over exactly what is a customer data platform.

[00:21:30] When you talk to retailers and understanding what, what can you do with it? What am I gonna use it for, and what's the right solution out there for it? And there are different, different products or different needs, just like in any other category, but this is definitely one that when you look at, like you're saying, anything related to all requirements around privacy and data security.

[00:21:48] There are new regulations, variations by state, by country you know, it's just becoming really hard to manage all of this. So if you don't have the right platform underneath it all, then how are you really ever gonna comply [00:22:00]with everything? Not to mention, before you even get to how you're using all this data and your own marketing efforts to consumers

[00:22:05] Casey Golden: Exactly. Just getting it in one place is one thing. Exactly. And being able to make an edit or a change or validate.

[00:22:11] These are not simple builds.

[00:22:14] Ricardo Belmar: right? Yeah, yeah. These

[00:22:15] Casey Golden: heavy 

[00:22:16] Ricardo Belmar: builds. That's right. 

[00:22:17] Casey Golden: And this, this is gonna be involv. 40 different other software companies that are plugging 

[00:22:22] Ricardo Belmar: That's right. That's right. That's why 

[00:22:24] Casey Golden: may or may not be new.

[00:22:25] Yeah. 

[00:22:25] Ricardo Belmar: So making the right choice is, is super important. And just making sure you have a good c d p is absolutely critical. Now it's, I think this, what we're saying, I guess we're saying this is the year that it becomes table stakes as you just have to have 

[00:22:37] Casey Golden: this

[00:22:38] yes. This is not, also not a fail fast product.

[00:22:41] Ricardo Belmar: That's right. That's right. 

[00:22:44] Prediction #7 - Loyalty program evolution 

[00:22:44] Ricardo Belmar: All right, Casey, give us number seven,

[00:22:46] Casey Golden: Loyalty. Loyalty. Loyalty programs are definitely going to be evolving beyond a point system or a punch card. I've never seen loyalty take such [00:23:00] a center stage as I have in the, the last probably four months of conversations and going into 2023. Retention, retention, retention, retention.

[00:23:10] And I think that all kind of goes back to the CPM cost the lack of performance from Facebook ads, the marketing costs lower conversion rates, and really being able to engage your customer. , we're seeing more paid tiers as a new revenue source for a lot of brands to pay more for better service or, or additional perks.

[00:23:31] And there's the web three evolution for the NextGen loyalty programs. And I think this is very interesting because there are so many. How do you communicate and how do you manage these VIPs online and in-store across different locations? via email

[00:23:51] Ricardo Belmar: Yeah. That's gonna work 

[00:23:52] Casey Golden: well.

[00:23:52] Right? You know, I mean

[00:23:53] Ricardo Belmar: E emails that they're likely to ignore. 

[00:23:54] Casey Golden: Right? Yeah. I mean, at the end of the day, we really go back to a email communication with our customer, [00:24:00] which is always one-sided. And so managing loyalty programs, potentially just by email not the best utility. And I see a lot of opportunity here with the blockchain and leveraging these different web three types of loyalty programs to manage this much better.

[00:24:21] And with Unlockables, I think that there's a lot of room here to grow and I think it's one part of Web three that makes sense for retail because we don't have 10 VIPs. , we have 1.5 million globally.

[00:24:38] Ricardo Belmar: Exactly. Exactly, exactly. I think this is one of our more interesting predictions, as well, but kind of putting it in context, what do you think then of what Starbucks is doing?

[00:24:48] Casey Golden: I love Starbucks. I've never used a loyalty at Starbucks. I pay full price since I should have bought stock when I was like 10. I should own a

[00:24:56] Ricardo Belmar: right? . 

[00:24:56] Casey Golden: So I mean, I think that what they've done is great. I'm a big fan [00:25:00] of the vendor that they're using. Of course, I think we all are right. But I, I love the fact that they just moved on web three and went on with the loyalty program and really focusing on the retention piece because when you are a regular, you are a regular, not for a year, but like 20,

[00:25:16] Ricardo Belmar: right?

[00:25:17] That's right. 

[00:25:18] Casey Golden: You know? 

[00:25:19] Ricardo Belmar: Yeah. We're talking real loyalty. Yeah. Yeah. Yep. And, and we know from, not even considering that the web three. evolution of this, which I think is going to have huge impact. But when you look at the most successful loyalty programs, right, I, I will call Starbucks existing one, one of those.

[00:25:34] I mean, Ulta Beauty's loyalty program is massively successful. Like huge, almost all of their customers are in that loyalty program. So it'll be interesting to see how they evolve it. But this is, I, I think this is a big one, and, and. . I, I would stress too, you, you mentioned that, the idea of having paid tiers and full membership programs as part of these loyalties, so loyalty is finally becoming more than just a discount.

[00:25:55] And, and I think now it's, yeah,

[00:25:56] Casey Golden: And this is a way to actually make it a club tier [00:26:00] and manage it, because otherwise you're managing it literally in email segments,

[00:26:04] Ricardo Belmar: emails that just get ignored.

[00:26:05] Casey Golden: You just, they just get ignored. And it's just, it's not scalable solution. And I think that this could be, Really, really compelling to be able to scale one your own loyalty program, but to be able to collaborate with other people's loyalty programs.

[00:26:20] So what if Starbucks loyalty program communicated to Ulta's loyalty program? And this is where Web three can play 

[00:26:29] Ricardo Belmar: very 

[00:26:29] Casey Golden: interesting, is it 

[00:26:30] Ricardo Belmar: Yeah. 

[00:26:31] Casey Golden: the collaboration's a 

[00:26:33] Ricardo Belmar: these an, an even more useful and, and valuable club like relationship

[00:26:38] Casey Golden: Yeah. I'm not exporting my, my email list and giving it to you. It's against yeah, it's against compliance.

[00:26:43] Ricardo Belmar: That's right. Exactly. Yeah, exactly. customer data. Yep. 

[00:26:47] Prediction #8 - Anywhere Commerce vs Immersive Commerce

[00:26:47] Ricardo Belmar: All right. Let's go to number eight, and this one I'm kind of referring to as anywhere commerce versus immersive commerce. Why? Because we all know that consumers want to transact commerce pretty much anywhere and everywhere [00:27:00] they are.

[00:27:00] And yes, we, everybody says that all the time. We all know you can sort of, kind of do this with, with mobile. The fact is it's still not quite good enough and not always quick enough to meet your in the moment needs, with just a, a phone or, or mobile device. , so what's new in this prediction is that the context of where you are and how that changes how you would conduct that transaction? It's not necessarily the same process that you want as a consumer if you're in your car or on the subway or walking down the street versus sitting on your couch or sitting at a desk. I mean, each of these has different requirements in how you shop and how you buy.

[00:27:37] And we've kind of generalized them to date, right? And maybe two or three different form factors. And, that's what we're saying. So, so to me, this idea of anywhere commerce is completely new kinds of solutions coming out. Some of them were at ces, some of them have been just started come out in, in the last year.

[00:27:52] We'll hopefully be talking to some of those in future episodes this year. But it, it's all about adapting the medium to [00:28:00] work in a matter that still reduces that friction, eliminates complexity and makes it easy to transact commerce for the consumer in that contextual moment. And, and that's not quite the same as just saying mobile solves everything.

[00:28:11] So that's the anywhere commerce side

[00:28:12] Casey Golden: I mean, we've really, I mean, how many years have we tried to get live inventory feeds for physical stores to go with mapping, right? I mean, and I, I keep saying this over and over and over again, like when I am, you know, speaking with, with people over the, the evolution of commerce, our physical software is just not digitally native.

[00:28:35] And so being able to work in real time it's, it's doable. And I think we're, we're finally gonna get to that point where you're gonna know the inventory one block ahead of you.

[00:28:47] Ricardo Belmar: Yeah, I agree. I agree. And, and how it's presented to you matters. So you might need to know that inventory, but depending on what you're doing, it doesn't do you any good to be shown an image of it. Right. Or to be shown, how to find it. You just need to be told [00:29:00] that it's there. Yeah. And that's all you need to know in that moment to, to make a decision. So that kind of adaptability, it makes a difference and it has an impact on conversion.

[00:29:08] So that, I think there's that. So now let's talk about the immersive commerce part of this. So that's the anywhere commerce piece. I like immersive commerce as a new term. And, and I'm gonna just kind of say this sort of for me replaces the broad. Metaverse discussion because I, I kind, if I break out the AR and the VR pieces for metaverse applications and, and look at, you know, how do you actually expect consumers to engage in commerce?

[00:29:31] I, I still don't think every metaverse example we have now implies that everybody's gonna sit around with a lot of gear on their head and on their hands. And who wants to do that for hours at a time? 

[00:29:40] Casey Golden: wants, who wants to be responsible for that for society? 

[00:29:44] Ricardo Belmar: there's that too. So, I don't see that yet happening for just general commerce.

[00:29:49] I mean, I can see it for, you know, if, if you're, if companies are hiring new employees and they want to do some new employee training and onboarding in a metaverse version of their [00:30:00] headquarters, I think that's a totally applicable use case. That makes a lot of sense when you've got so many people working remotely.

[00:30:06] But that doesn't mean they're doing it for eight hours a day. It means they might do it for half an hour and then take a break and then come back in another half an hour or, or, or whatever it is. But it's not all day long and I haven't seen enough examples. Yeah, I mean, the whole point to doing this is not just to replicate a store, but to do things that you can't do in a physical space.

[00:30:25] So we, we had Alan Smithson on here before talking about the mall in the Metaverse, and they're doing it a little differently, which I think is the right answer to enable you to do things that you couldn't do in the physical space, not just replicate it. But again, let's take the, the technology pieces out of it and let's look at, for example, AR. You can create as a retailer a really immersive experience with AR that lets someone understand the product.

[00:30:46] Feel like they're engaging it, seeing it, feeling it, touching it without actually having it there. You know, this year's NRF had a lot of hologram demos of showing people what outfits might look like. Look, very three-dimensional. That's pretty immersive. I think the one thing [00:31:00] coming out of a pandemic, everybody wants to go back to this experiential retail, and that's where the immersive commerce comes in.

[00:31:06] But you don't have to do it in the metaverse. So if you're a retailer, you know, where am I gonna invest money? And time and resources to do something that I expect to have a short term impact this year on consumers buy more from me. I think it's chasing those immersive experiences than chasing a brand new thing that the marketing team wants to do in the metaverse.

[00:31:25] Casey Golden: I agree. And I think it's, it's also too we went with like the metaverse and it's something else and you need to go to it, to I don't know, what was it, say like, decentral land had like 31 user, daily active

[00:31:36] Ricardo Belmar: something like that.

[00:31:36] Casey Golden: Where it's just like, okay, maybe the user adoption, it's too far of a bridge.

[00:31:42] So now everything's kind of coming back into a web two scope. To make it feel more immersive, but it's not necessarily using these technologies that are, are metaverse the way we defined it. I don't know. Or end of 2021 [00:32:00] all of last year. Right, right. You know, that too big a bridge. So now it's kind of changing.

[00:32:05] So I think it's more about more about what than where.

[00:32:08] Ricardo Belmar: Right.

[00:32:09] Prediction #9 - web3 vs metaverse

[00:32:09] Casey Golden: but it's, I mean, that can lead us into the, the web three versus Metaverse

[00:32:14] Ricardo Belmar: which is our number nine,

[00:32:15] Casey Golden: which is number nine. Web three is carving out its space in commerce. While the Metaverse is a marketer's new shiny object you know, where we have this underlining technology.

[00:32:27] Can provide a more scalable utility and a more secure utility for a lot of different commerce applications. But it's not necessarily the metaverse. And I think that there's been some confusion over last year, everybody kind of figuring out what's an N F T, what's a digital twin, What is phygital, right?

[00:32:46] Like all of these different opportunities. Where, and then we have the crypto crash So then it's just like, oh, maybe the hype's over. Web three is a definitely, I feel here to stay. Digital twinning has become [00:33:00] much more operational after all of these players experimenting in it last year, and we'll see more mature products and use cases from streaming the operational and production changes for business processes for physical apparel, phygital apparel and really being able to leverage almost another type of infrastructure as we go into more scalable and digital, digital native software solutions. And the metaverse, I see being more of like that new immersive marketing medium where instead of it being a flat Instagram image or a reel or a video this is an opportunity to move from broadcasting to interactive brand experiences becoming the destination.

[00:33:48] But actually being able to have that fantasy that a lot of brands just can't afford to do in real life, you know? 

[00:33:57] Ricardo Belmar: Yeah. I, I think at the end of the day, [00:34:00] Meta and our friend Zuckerberg out there really burst the bubble on, on the excitement to this I think. Everybody thinks that they're just failing by throwing good money after bad. And, and that's soured a lot of people on it.

[00:34:10] But I agree. Digital twins is probably the, to me, the top use case that comes out of the metaverse. It's got real utility. There are lots of brands using that, especially on, on the CPG side to do a lot of new product development model their, their factories and production lines so that they don't have to.

[00:34:25] Figure out and spend money in the physical world and to make changes. They'll know before they make the first change, whether it's gonna work or not, and how much it's gonna save by doing the digital twins. So there's real value there. And I think you're, you're right, the web three part of it, you touched on it before on the loyalty program, so that's got real, real world value in that.

[00:34:41] So we'll see more of it. Yeah, so I think that's definitely web three versus the metaverse. I think Web three is gonna be the winner there this year. 

[00:34:48] Prediction #10 - Generative AI

[00:34:48] Ricardo Belmar: So let's move into the last one, number 10, which we would be remiss if we didn't have a predictions episode without talking about all these generative AI solutions that have come up in recent weeks, [00:35:00]whether it's ChatGPT and Dalle-2, all these things.

[00:35:03] And what does that mean . To me this is, these are cool technologies, these are amazing applications of AI that retailers, just like every other business, are gonna figure out where and how are they gonna make use of it. I mean, you could see , something like ChatGPT being used to help write their marketing material.

[00:35:19] For example,

[00:35:20] Casey Golden: like, why did we not just ask the question and. In chat, G P T before the podcast,

[00:35:26] Ricardo Belmar: Yeah, we should, I'm afraid of what it would've

[00:35:27] told us. , I'm afraid what it would've told us, wonder if would've, we would've matched up to any other ones. It tells us are the, the top 10 

[00:35:35] Casey Golden: All 

[00:35:35] Ricardo Belmar: like to know. Okay, so, so yeah.

[00:35:37] Homework for all our listeners is go ask ChatGPT for the top 10. And my big question, would it list itself as one of the big predictions and big trends for the year?

[00:35:47] Casey Golden: Right?

[00:35:47] Ricardo Belmar: right. But if you think. There are tools coming out already to integrate these technologies into other applications, other areas?

[00:35:55] I mean, I'm, I'm just thinking of you know, this, this could have an impact in changing how people search for [00:36:00] products. For example, if I'm a retailer and I incorporate this into my app, maybe there's new reasons now as a consumer for me to go into the app and not spend time going to Amazon or Google to search for products.

[00:36:09] I can just do it in their app and I can do it in a conversational way by just talking to the app. I. I don't know. I personally don't think there are a lot of people asking Alexa or Siri to help them shop

[00:36:20] Casey Golden: No, I mean, you know, it it, it comes back to garbage in, garbage out.

[00:36:25] And so in shopping, we've had a lot of garbage in.

[00:36:27] Yeah, right. I just wanna see pencil skirts that have a double, double kick plate.

[00:36:31] I've never seen the word double kick plate on any e-commerce listing in my life. And I have to go store by store. Yeah. But there's opportunity here,

[00:36:41] Ricardo Belmar: right? And, and. Connect the dots on this to our retail media networks and B2B services prediction.

[00:36:48] I mean, you apply these things to all the media that you're putting into the network and how the retailer interfaces that with the brands there. There's impact on both sides of this, right? For the brands and using these technologies to generate the media they're [00:37:00] placing into the network on the retailer and how they're presenting it in store on digital screens.

[00:37:05] There's amazing applications and potential here. I, it's this one. I think at the same time, it's easy to predict. It's also hard to predict because knowing exactly what we're gonna see retailers create with this, I, I don't think anybody can legitimately do that right now in January. But I think, you know, it would be foolish not to have this on any predictions list for the year that it's gonna have a major impact.

[00:37:26] Casey Golden: No, I mean, it's really interesting.

[00:37:27] I've spoken to a lot of people in this, more on the tech side of the space. Everybody knows what it is, but when I've spoken to some brands and designers and and whatnot, they've never heard of it.

[00:37:44] Right.

[00:37:44] It's too soon. 

[00:37:45] there is definitely going, like, there, should

[00:37:50] we move so fast for, for these, these retailers and brands on the tech side that, you know, they can't keep track of all of these things.

[00:37:57] Thankfully there's, you know, a lot of retail consultants and a [00:38:00] lot of technologists that are really diving into here and finding the value . To bring back some type of a solution for Branson retailers with a use 

[00:38:08] Ricardo Belmar: case.

[00:38:08] Yeah. And, and I think this is a lot like what's we've been saying and the other predictions is happening with web three, right? Where we, where we're finally seeing major examples in loyalty. It's where the actual retail tech that's being used in some ways hides all of the complexities and, and things that you have to know to implement on the tech side for this or the retail.

[00:38:27] The brand doesn't need to deal with it, the solution just doesn't. And I think the same thing will happen here once we start to see the tools. Right now everybody's playing around with the raw capability that ChatGPT gives 'em or Dalle two. But when that gets integrated with the right tools and APIs so that you can put it in other things, we'll see new retail tech solutions come up that are going to use this, but they're gonna deliver a business outcome for the retailer of the brand without having to know that this is what's going on in the 

[00:38:54] Casey Golden: Exactly.

[00:38:54] They're probably not even gonna know.

[00:38:56] Ricardo Belmar: Yeah. And And that's what's gonna help at scale

[00:38:57] Casey Golden: what's coming in. Right. And I've seen a [00:39:00] lot more success on these solutions. when you have the context of the end use case. Right. And I'm, I think we're just gonna see in general a huge push of people from retail that are in tech are going to be making some really big moves in the industry.

[00:39:20] I think the most need for a retail technology consultant in general. It's not about omnichannel, it's not about bricks, it's not about clicks. It's literally about getting a technologist to work with you that understands the retail

[00:39:36] business. 

[00:39:36] Ricardo Belmar: There's, there's a big opportunity there for the consultants in the industry and for all the, the services companies that are gonna help with implementations

[00:39:43] Casey Golden: because it's a lot of, it's a lot of whiplash,

[00:39:46] Ricardo Belmar: It is. Yeah. . That's right, 

[00:39:50] Casey Golden: that's plus running your own business, you

[00:39:52] Ricardo Belmar: Exactly. Yeah.

[00:39:53] Casey Golden: has a job already, right? So

[00:39:55] Ricardo Belmar: Kind of implied, not so much because it's not really worth as a prediction, but kind of implied across all of [00:40:00] these that every retailer is actually focusing on the core business while dealing with all these things.

[00:40:04] So yeah, that's sort of a given to that. All right, well, those are the 10, those are our 10 predictions. So for all of our listeners and show fans, hit us up on LinkedIn. Give us your comments and feedback. Let us know what you think. And we'll be checking in throughout the year to see how we're doing on these, like we did last season and see what happens from there.

[00:40:25] Casey Golden: I, I've never been more excited for a year to work in my life. like 2023 Yeah. Is going to be the most fun.

[00:40:34] Ricardo Belmar: Right, right. There's so much potential here. Absolutely. Absolutely. . Well, Casey, I think that is a wrap for this episode.

[00:40:42] Casey Golden: Love it.

[00:40:43] Show Close

[00:40:43] Casey Golden: We hope you enjoyed our show and we can't ask you enough to please give us a five star rating and review on apple podcast to help us grow and bring you [00:41:00] more great episodes. If you don't wanna miss a minute of what's next, be sure to smash that subscribe button in your favorite podcast player. And don't forget to check out our show notes for handy links and more deets. I'm your host, Casey Golden. 

[00:41:14] Ricardo Belmar: And if you'd like to learn more about the two of us, follow us on Twitter at Casey c golden and Ricardo underscore Belmar, or find us on LinkedIn. Be sure to follow the show on LinkedIn and Twitter at retail razor. Plus our YouTube channel for videos of each episode and bonus content. I'm your host, Ricardo Belmar.

[00:41:31] Casey Golden: Thanks for joining us.

[00:41:32] Ricardo Belmar: And remember, there's never been a better time to be in retail, if you cut through the clutter! Until next time, this is the Retail Razor Show.