The Retail Razor Show

Missed Groceryshop 2022? Not to worry, we’ve got you covered! Welcome to another SPECIAL EDITION season 2, episode 3, Part 3, Groceryshop recap!We’re bringing you 6 great interviews recorded live and in-person at Groceryshop in Las Vegas, NV, bundled up in 3 episodes with 2 interviews each. For part 3, we saved two very special guests for your listening pleasure. Andrew Lipsman, principal analyst for retail and ecommerce at Insider Intelligence gives us a rundown of the top trends across Groceryshop, with a focus on retail media, convenience stores, and a unique perspective on personalization and omnichannel. Then you’ll hear from Krystina Gustafson, SVP Content for Groceryshop and Shoptalk. Krystina gives us the insider’s view of the show, how it’s produced, another view of top trends, and finally, a take on what was NOT talked about at the show. You'll be hard pressed to find a more jampacked 30 minutes of insights!News alert! We’re back at #20 on the Feedspot Top 60 Best Retail podcasts list, so please keep those 5-star reviews in Apple Podcasts coming! With your help, we’ll move our way further up the Top 20! Leave us a review and be mentioned in a future episode! 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 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. 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 Swag Tag and Brag, and Overclocked, from the album Beat Hype, written by Hestron Mimms, published by Imuno.The Retail Razor ShowFollow us on Twitter: https://bit.ly/TwRRazorConnect with us on LinkedIn: https://bit.ly/LI-RRazorSubscribe on YouTube: https://bit.ly/RRShowYouTubeSubscribe on Apple Podcasts: https://bit.ly/RetailRazorShowRetail Razor Show Episode Page: https://bit.ly/RRShowPodHost → Ricardo Belmar,Follow on Twitter - https://bit.ly/twRBelmarConnect on LinkedIn - https://bit.ly/LIRBelmarRead my comments on RetailWire - https://bit.ly/RWRBelmarCo-host → Casey Golden,Follow on Twitter - https://bit.ly/twCaseyConnect on LinkedIn - https://bit.ly/LICaseyRead my comments on RetailWire - https://bit.ly/RWCaseyTRANSCRIPTSPECIAL Edition: Groceryshop 2022, Part 3[00:00:00] Ricardo Belmar:[00:00:20] Introduction to Part 3[00:00:20] Ricardo Belmar: Hello, and welcome to season two, episode three, part three 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 Razor Show listeners to our un apologetically authentic retail podcast for product junkies, commerce technologists, and everyone else in retail and retail tech alike. [00:00:39] Ricardo Belmar: So Casey, what did you think of part two of our grocery shop interview series with those two incredible grocery retailers, Lisa Kinney from Albertsons and Dave Steck from Schnuck Markets.[00:00:48] Casey Golden: Well, you did say that this episode would be thought provoking and you delivered. Lisa really sliced and diced what's happening in grocery with consumer data. I found it incredibly interesting and related right back to the future of retail media networks in a way I've just never heard anyone talk about it like that before. [00:01:07] Ricardo Belmar: Yeah, that's right. I mean, Lisa really brought home issues around where the data comes from with all the tech partners that grocers are involved with now, and asked I think, some tough questions about how retail media would bring brands and retailers together and where all those dollars come from.[00:01:22] Casey Golden: Yeah. And then Dave Steck, I mean, is there any emerging tech that he's not looking into yet? I mean, I don't know, maybe web three, but. [00:01:31] Ricardo Belmar: Yeah. Something tells me that that's not too far behind on his schedule . But yes, I mean, yeah, he, he really showed us how having the right corporate culture just opens the door to doing really creative and innovative things with New Tech in the store. I mean, he's got, he's not only has robots and IoT, he's looking at electronic shelf labels.[00:01:50] I think there's no limit to where Schnuck's is going, and it's pretty impressive.[00:01:53] Casey Golden: So for our listeners who haven't checked out part two. You should probably stop right now. Go back. Listen. We'll wait.[00:02:00] Ricardo Belmar: So, So do we just stop talking now and wait for the listeners to come back or what?[00:02:03] Casey Golden: Uh, Uh, not really. I mean, we're recording for a reason. We're not live. [00:02:06] Ricardo Belmar: Yeah. Okay. That, Yeah. All right. I know, I know. Just, just kidding. So let's talk about this episode then.[00:02:10] Casey Golden: Who do you have lined up and tell me, did you save the best for last? Honestly, part two was jampacked full of insights coming at you every minute. [00:02:19] Ricardo Belmar: Well, I have to admit, yes, yes, Probably, possibly. Maybe. We did save the best for last, not to diminish anything about our previous guests in any way because they were all really amazing. We got lots of fantastic insights and, and knowledge from everybody. But , this time out, we've got two really amazing guests.[00:02:37] One I, I would call a recent fan favorite Andrew Lipsman the principal analyst for retail and e-commerce at e-marketer, Insider Intelligence, and hot off of our Retail Media networks episode. That's quickly becoming one of our most downloaded episodes, by the way ,that I caught up with Andrew at Grocery shop after one of his sessions, and we talked about what some of the biggest trends were across the whole show.[00:02:58] As we're pretty much near the end of the event at this point. So much of what Stewart told us in part one I think stayed the course for the rest of the show. But Andrew points out some really interesting tidbits about the convenience store segment . And it might just be a, a sleeping giant waiting to surface.[00:03:13] Within all the talk around, around grocery and food in, in general. So we briefly touch on quick commerce and rapid delivery and the latest from the show on those providers. It was really interesting though to hear his take on personalization and omnichannel and how those, I mean, let's face it, those are not new trends.[00:03:31] But suddenly they were just front and center at grocery shop. You, you'd think that the grocery industry hadn't heard of those two things before the way they were being talked about. So I think his position will surprise you on those two. And, you have to watch out for our discussion on what was not a trend at the show.[00:03:48] I'll give you a hint. It rhymes with metaverse,[00:03:50] Casey Golden: not a hint, [00:03:53] Ricardo Belmar: It's not[00:03:55] Casey Golden: It's not a hint, way to give it away. Um, [00:04:00] Ricardo Belmar: on. Okay. You'll see, you'll, you'll see, there, there's a reason for why that's the case and it comes back again in fact, with the second guest for this episode [00:04:06] Casey Golden: Okay, so don't keep us in the suspense. I mean, I'm, I'm a co-host and I'm in suspense who's, two. [00:04:13] Ricardo Belmar: number two is none other than Krystina Gustafson, SVP of content for grocery shop and shop talk. And if you're like me, you probably remember Krystina from back in her cnbc, retail journalist days. So this is a, a, a real treat of an interview. Krystina and I talk about what makes grocery shop so special, how they put the show together.[00:04:31] What are the key trends from her perspective ,from what they were trying to accomplish? And you know, while they're similar to what we've been hearing from the other guests, there is a bit of a unique twist, I think, to what she offered. So I won't give that away. You'll have to listen. But we do dig into what some of the big buzz was about, what was happening in the expo hall.[00:04:49] And I asked her as well about what's not buzzing, You know, i e metaverse, which was not really buzzing at the show. And of course where retail media is headed because I don't think we can possibly do an episode about grocery shop and not talk about retail media. But it's a fascinating insider discussion that I think listeners will really enjoy.[00:05:06] We have to have Krystina back on the show again. She's so much fun to talk to. [00:05:09] Casey Golden: All right, I'm sold. With that lead in there's nothing left to do, but head straight to the interviews. I'm excited to grab some popcorn, get comfy, grab a notepad, and dive right in. So let's listen together to Andrew Lipman and Krystina Gustafson recorded live and in person at Grocery Shop 2022. [00:05:28] Andrew Lipsman Interview[00:05:28] Ricardo Belmar: and welcome To the retail Razor Show Special Edition episode at Grocery shop 2022. [00:05:42] I'm here at the show in Las Vegas, Continuing our series of amazing retail transformers to talk all things, grocery and consumer goods. I'm here now with Andrew Lipsman, principal analyst for retail and e-commerce at Insider Intelligence. Andrew, it is awesome to have you back on the show again. [00:05:58] Andrew Lipsman: It's great to be back already. Ricardo. [00:06:00] Ricardo Belmar: So of course the existing listeners may have heard or watched our retail media networks episode, they'll already be familiar with you. But for new listeners give us a quick, intro to what you do at insider intelligence. [00:06:10] Andrew Lipsman: Yeah. as you said, I'm a principal analyst covering retail and e-commerce. So I really cover the gamut of all things, retail, whether that's in store e-commerce and Increasingly advertising where retail and e-commerce intersect with other trends. So retail media Has certainly been in my cross hairs and I've also spent a, quite a bit of extra time in the last year or so focusing more and more on grocery and CPG.[00:06:33] Ricardo Belmar: So since we are at grocery shop, let's talk about what some of the big trends are that you're seeing here. And they're getting all the buzz. I know you've spoken a couple of sessions that I attended. One panel was a session about emerging tech in the convenience store space. [00:06:47] So Kind of thinking back to that and anything else you've seen at the show, what, What are let's say two or three big trends that you're seeing here at the show. [00:06:53] Andrew Lipsman: Yeah, well, it's certainly biased towards the sessions that I was in. [00:06:56] And I've been running around. and haven't seen as many other sessions as I would've liked, but convenience does seem to be a bigger trend. They've done a nice job with the convenience track. [00:07:04] And I guess my viewpoint is that it's maybe under appreciated and not talked about quite enough, but it's a pretty formidable retail space. Obviously a lot of brands are flowing through there and there's a lot of innovation happening on a lot of fronts, the tech cashierless checkout. [00:07:20] Retail media are starting to have that conversation and how it's used and deployed in C stores. And then really just the broader delivery and quick commerce space. That convenience is a huge, huge trend. In terms of driving consumer behavior. So I think all those things intersect in interesting ways and I was glad to be a part of that session. [00:07:38] Ricardo Belmar: Yeah. I agree when convenience is definitely an interesting one. That's the, one of the things I enjoyed in your session on There's a little bit different spin. I think, to how a lot of the technologies and things that, that the grocers are talking about that maybe get applied a little differently in convenience. [00:07:52] Andrew Lipsman: Yeah. And you know, the one that's kind of interesting. cashierless checkout, for example, automated checkout. On the one hand convenience, you kind of want to get in and out, but also lines aren't that bad. [00:08:03] But We talk about it there because it, it kind of started with Amazon Go and that format, and that really was driven by the need for camera technology to be able to work in a space. And it worked better in small format [00:08:15] So I'm curious how that plays out longterm. Grocery store format, everybody hates the checkout line. So that's where, that's where the real strong use case is and now the technology is getting a lot better to enable that. [00:08:26] Ricardo Belmar: You mentioned retail media. And we've talked about that before, and I think that's clearly been a major trend here at the show, you see it everywhere that you walk around the halls with the Walmart connect advertising. What are you seeing in the context of retail media around convenience? [00:08:40] Andrew Lipsman: Well, I mean, I just think about. you know, I'm I'm a big proponent of the trend of in-store retail media. I think it's going to emerge. I think there's a lot of opportunity for digital signage and screens to start entering into the physical space more. [00:08:53] Where I think it's particularly interesting in convenience is that while you've got in most cases, the cooler aisle that is visible, right? When you walk in. So it's not on the periphery. Like it is in a grocery store. And, or in the center aisle. And I think that that visibility. maybe makes it more impactful. [00:09:10] And also. I can just see c-stores really taking to it. And so I'm watching that carefully. to see if, if we start to see a bigger rollout of that in the c-store format. [00:09:19] Ricardo Belmar: Yeah. That's going to be interesting to compare how that kind of weighs in against what the grocery is doing now with their retail media networks. [00:09:27] Andrew Lipsman: And I think that's it. When you walk into a, C-store also, you're probably much more open to that brand and you don't necessarily know what you want I'm thirsty, right? Or I'm coming and going into grab beer. That's a perfect time to put that brand impression in front of the customer.[00:09:41] Ricardo Belmar: I did notice some of the speakers talking about how they're either seeing kind of a consumer shift in terms of thinking about, you know, what do I need to buy food wise for the week versus now more thinking around, what do I want to buy for tonight? [00:09:53] Andrew Lipsman: Yeah. Instant delivery and quick commerce space. [00:09:56] I mean that that's so interesting. My, my biggest question here, as we see maybe some consolidation and some players leaving the market, what's going to happen. [00:10:04] Is there enough of a regular use case for most consumers? I've said first time I used goPuff it was amazing. I got my order in 14 minutes. [00:10:12] The second time it was during rush hour. And I got my order in 25 minutes. Still a [00:10:16] Ricardo Belmar: still. Pretty impressive. [00:10:17] Andrew Lipsman: Right. I was in the middle of preparing dinner, so that's good. But I haven't seen a lot of other occasions for me to keep using it. So that's really, my question is how, how often are people going to be doing this. Now?, I'm maybe not the core consumer. The millennial and gen Z consumer, I think is much more acclimated to this behavior. So maybe that's where the market grows from. [00:10:36] Ricardo Belmar: Yeah, that could be an I I noticed as you have a pretty much all of those now providers have been on stage at some point grocery shop. And I noticed every single one of them had mentioned the key metric for them is increasing order volume and order frequency. And I've noticed many of them talking about branching out from just food, into other retail spaces, as a way to kind of supplement and have a, I'll say it's kind of a reason to give the consumer why they should use that service multiple times a week. for example. So they need ways to drive that order volume. And if grocery and convenience isn't enough, then they'll go partner with other retailers to add onto it. [00:11:09] Andrew Lipsman: Yeah. I mean for me, it's interesting how I branched out into more categories. My first was a, you know, a late night order, so it was ice cream and a indulgence. Right. [00:11:19] When I was in the middle of preparing dinner, I was missing an ingredient. But also, I was trying to do dishes as I was preparing dinner and I realized I was out of dish soap. And by the way, I could actually use a new scrubber. So, right. So. I ended up [00:11:32] Ricardo Belmar: could think of other things. [00:11:33] Yeah. [00:11:34] Andrew Lipsman: into household essential. So And then the other use case that has come up in my household is you're sick and you just. It's not easy for a parent to go out to Walgreens or CVS to get cold medicine. It's nice when it comes to you. [00:11:46] Ricardo Belmar: Yeah, that's a good point. And that's one of those, kind of tangible use cases for why you have to have it now.[00:11:51] Andrew Lipsman: Yep.[00:11:51] Absolutely.[00:11:52] Ricardo Belmar: That makes sense. So another interesting I talked about this briefly before we were recording. Lots of talk about personalization. [00:11:59] And you know, the first thing I think of when I hear everybody talking about that as well, haven't we been talking about personalization in retail for, for years now. [00:12:07] And It's almost like there is an awakening with the grocery space that I actually need to worry about this, that, you know, if everybody's talking about.[00:12:15] omni-channel and, and how, like I'm going to use that to optimize my profitability and kind of compensate for high cost of e-commerce. What do you, what do you think is going on there in all this personalization talk that's happening?[00:12:28] Andrew Lipsman: Well, In general, I glaze over when I hear personalization because it's this big nebulous term. But then my, my second impulse is to say, well, let's break it down. What, when does personalization really matter? So in a digital experience, [00:12:40] Here's a perfect. example. When I go and do an Instacart order or another e-commerce order. [00:12:46] I like the fact that it knows what I got last time, and it can and can serve up those relevant, basket building, items right away. So that streamlines my trip and you know, it's already done half the work for me. [00:12:57] That's a nice version of personalization, Obviously coupons and things of that nature. Getting the right coupons. To the right consumers. [00:13:05] Is isn't a major benefit. So I think the applications are pretty strong. in the grocery category in a way that it isn't always elsewhere. [00:13:13] Ricardo Belmar: Yeah, no, that makes sense. That makes sense. [00:13:15] It has a little bit more, I guess I'm going to say direct value. For the consumer and something that, that speaks right to a need in the moment [00:13:23] Andrew Lipsman: Absolutely. But I'm the wrong consumer because I just it's too much noise to try and manage coupon. So I I know[00:13:29] Ricardo Belmar: I agree[00:13:29] Andrew Lipsman: I'm, I'm different than most consumers. But it just, I, I go right past that.[00:13:34] Ricardo Belmar: Yeah. Same here. I'm just like that. [00:13:37] Is there anything that surprises you that people are either not talking about at all, or that there's very little conversation going on. [00:13:43] Andrew Lipsman: I think I've only seen the word metaverse twice the whole conference on a couple of booths. [00:13:48] Ricardo Belmar: Right. Yeah.[00:13:49] Andrew Lipsman: and that's a good thing. Although as you and I were talking about before we recorded[00:13:54] Ricardo Belmar: Yeah. [00:13:55] Andrew Lipsman: Maybe the metaverse, you know, the best use case for it isn't food shopping. [00:13:58] Ricardo Belmar: That's right. Yeah. [00:13:59] And I did actually hear in, in fairness, right, did hear one of the CPG brands on stage bring up that point exactly in that way. [00:14:07] And She mentioned ,I can see a fashion use case. I think that's a pretty clear cut one, but if the consumer can't taste it or smell it or understand.[00:14:16] what it's really going to be for them in the metaverse, then what's the value in them engaging with, with a food brand. In this matter. And so. The conclusion was kind of, well, I just don't know how to, how do I define the value here for the consumer? If it's not valuable for our consumer, why should we invest in it.[00:14:32] Andrew Lipsman: Yeah. Grocery shopping. I don't see that use case very strongly. But listen the metaverse today, I would say is really gaming and, and kind of the evolution of gaming. But gamers are an irrelevant audience, and so having brands, especially if you're a brand that, Mountain Dew or, or the like that, that really core to younger consumers That's relevant. So they should be in gaming. In game advertising. And if you want to call it a metaverse call a metaverse. [00:14:56] Ricardo Belmar: Right. Yeah but it's still at the, so more of like a brand affinity brand awareness kind of play rather than the true commerce environment. [00:15:02] Here's another one for you, that There was an interesting announcement by Firework. It was a live streaming provider with a new partnership they have with Walmart. Now to bring livestreaming to Walmart's e-commerce. And I find this interesting and where I see these live streaming developments, I've been a big proponent that, that live streaming is going to be meaningful. For commerce, but I, I I've signed. [00:15:23] Altered my view, at least a little bit. I'm curious, but you think that It's not really being driven by the social media platforms anymore. It's this really seems to be more about very customized things with a core technology that a retailer or a brand can acquire. Integrate it with their platform at their own site, and then use that as their live streaming interface for consumers. And if you go to Firework's booth here at the show, I noticed that they're showing examples of, you know, a grocer who's doing the live cooking session.[00:15:50] And I'm going to assume here for the moment That that makes sense if they can somehow tie it into the e-commerce platform And I'm watching the live stream and they say, you know what? I'd like to make that tonight. Where's the button I click or tap to actually put in a grocery order for all those ingredients. [00:16:04] Andrew Lipsman: Yeah. So I'll say that I do buy the premise of bringing that media experience to where it's contextually relevant. But I will also say that media is competing with viewing other media[00:16:17] Ricardo Belmar: Right. That's [00:16:18] Andrew Lipsman: And so the, I think there's a high quality bar. And so what I think you could also see as a lot of players experiment with the format. And they're just not going to do it all that well. We've seen Amazon live has not taken off. And part of it is like, [00:16:31] They haven't gotten the right influencers. the content is not there. And so, [00:16:35] Ricardo Belmar: Right. It's just not [00:16:35] Andrew Lipsman: consumers tune out. So I will just say that what I'm looking for for that to work is the content has to be great. [00:16:41] Ricardo Belmar: Yeah, that makes sense. [00:16:41] Now I agree. I agree. It definitely has to have the right content. A lot of it, I think, has to do again, like what you were saying earlier. It has to do with what the consumer is thinking and doing in the moment. And how applicable is it?[00:16:51] Andrew Lipsman: Absolutely. [00:16:52] Ricardo Belmar: Well, Andrew, once again, this has been an amazing discussion with you, so glad you can come back on the show again today. [00:16:58] If Listeners want to reach out to you get in touch with you, learn more about the work you're doing. What's the best way for them to reach out.[00:17:04] Andrew Lipsman: LinkedIn is the easiest. That's where I share my work and where I listen to all the smart people on LinkedIn and learn from them. That's a key input to my analysis is learning from the other smart people in the industry [00:17:16] Ricardo Belmar: have to agree with that, but we're always in a learning mode in this industry for sure [00:17:21] Andrew Lipsman: A hundred percent.[00:17:21] Ricardo Belmar: Great. Well, Thanks again, Andrew.[00:17:23] I appreciate you joining me today. [00:17:24] Andrew Lipsman: Thanks for inviting me. [00:17:25][00:17:25] Krystina Gustafson Interview[00:17:25] Ricardo Belmar: Welcome to the retail razor show special grocery shop edition for 2022. [00:17:41] I'm here continuing our series of conversations with retail transformers and talking, all things, grocery and consumer goods, And I'm thrilled to be joined right now with Krystina Gustafson, SVP of content for Grocery shop, Krystina, it's fantastic to have you here. [00:17:57] Yeah, [00:17:57] Krystina Gustafson: I'm thrilled to be here. Thanks so much for making it out to the show and taking the time to chat with me.[00:18:02] Ricardo Belmar: I appreciate it. So tell us a little bit about just some of the background. Like how is this Grocery shop comparing to past ones? What are you seeing is kind of the interesting things that have caught your attention. Maybe feedback from attendees versus past editions. [00:18:16] Krystina Gustafson: Yeah, it's a great question. I think first and foremost, just sort of a statistic wise, our biggest show to date. So we have 4,000 attendees joining us here in Las Vegas about double the size that we were last year, which was a little down just given the nature of where we were in the pandemic cycle. I have to say when, when we came back to Las Vegas last year, I thought there was going to be no similar buzz that would, that would sort of meet the bar of last year's. It was really just kind of the first time that everyone was getting back together after the pandemic, it sort of felt like people were, were running around just buzz, completely excited. [00:18:50] We actually were losing speakers because they'd come to the speaker lounge and then they'd get distracted because they saw someone that they knew they got very excited. They would, they would kind of run off. And so actually we've had to sort of implement a longer lead time for, for people to come to the speaker lounge ahead of their session. Exactly. Exactly. [00:19:05] But no, I think what's been really fascinating to see as it's just a different kind of buzz, this year right. It sort of feels like last year, it was just that, you know, first day of school, excitement, you know, you're, you're back with all your friends and it's so fun. And this year it feels like a very big buzz around the content again and just kind of what people are here to learn. They feel very hungry for knowledge.[00:19:23] And I think a lot of that is just this inflection point that we're at in the industry today where, you know they don't have to innovate anymore, quite frankly. Right?[00:19:30] If they kind of want to stop and say, Hey, we're seeing a slow down in the economy, consumers are going back to stores. You know, this isn't necessarily the top of our priority list anymore. And so I think everyone that's here are the folks that realize this transformation is real.[00:19:43] And so they're just really hungry to meet with other people who are of a similar mindset. And, and make those connections as well as kind of learn from from folks. [00:19:52] Either with their peers at table talks, which are, you know, sort of group discussions or in the more traditional sort of track session formats where they're hearing from, from other speakers. [00:19:59] Ricardo Belmar: I've been through different sessions at the show of this week, the content has been really, really wonderful.[00:20:05] There's been a good variety of things. You know, great, great, great choices on the speakers by the way. I think that's been really, really fantastic. [00:20:11] This year, I loved the, the mix of different retailers that you have with some of the brands.[00:20:15] I think it kind of felt to me I could be wrong, but it felt like compared to the last Grocery shop I was at was the 2019 one. And compared to that one, it was a lot more sessions that had a mix of retailers and brands, which always feels kind of interesting because you could expect sometimes there's gonna be a little bit of tension in that discussion topic, but I think it's worked out really, really well in a lot of the sessions. [00:20:33] Krystina Gustafson: Yeah, To be honest, it's something we've always strived for. So I'm glad to hear that. It's, it's something that you've, you've sort of seen come through in the sessions themselves. I agree with you, you know, I'm a reformed journalist. I like to say. So I always sorta think about, if you're reporting a story, you have to have your three different sources, right.[00:20:48] And so a lot of times you want those to be sort of, two folks within the industry. Maybe you want a consumer, maybe you want a regulatory board, but, but the point of it is by having three different perspectives, you kind of triangulate to something that everyone in the audience can relate to. And not just kind of have, retailer one, echo what retailer two saying, and then followed up by retailer three. So we work really, really hard, not just to curate the session topics, but the mix of perspectives that you're going to hear on any given topic.[00:21:12] Ricardo Belmar: Yeah, so, one thing that I've found interesting this year. And again, I'm comparing to a few years back from my personal experience. But the kinds of technologies, that we're talking about, It feels to me like we're, we're not talking about the things I might necessarily have expected was had evolved from previous years.[00:21:27] And maybe that's to be expected just Because of where we are and you know, what, everything that happened through COVID for grocers and, and brands. [00:21:33] Are you seeing something similar? Does it look the same from your perspective?[00:21:36] Krystina Gustafson: It's a really good question. You know, we, we kind of came out with this thesis of just kind of where grocery e-comm is on a digital maturity scale, you know, pre pandemic throughout the pandemic and then where we are today. And I think previously, it was just kind of, people were testing and learning, you know, they were testing the waters, they were just kind of doing, quite frankly, the basics, right. [00:21:55] Whether it was working with third-party partners, for things like delivery, whether it was just kind of like, you know, testing and experimenting with personalization, I think to your point, those things are still very important today, but people are thinking about sort of, how can they take this one step farther? [00:22:07] So from our perspective, it went from kind of like the nuts and bolts to, Okay.[00:22:11] We have to stand this up because we quite frankly have no choice if[00:22:14] Ricardo Belmar: Right now it's table stakes. [00:22:15] Krystina Gustafson: Yeah, exactly, if we don't roll out curbside, no one's going to get their groceries. No one's going to be able to eat. So, so let's just kind of like push it out as fast as possible. I think from there, people have kind of been fine-tuning those products, But in addition to it, people are thinking about how the future of online grocery can look different. And what I mean by that is, you know, It's always been about convenience and it will still be about convenience. Heck we added an entire track dedicated to the theme of convenience.[00:22:37] Ricardo Belmar: I went to a number of those sessions. [00:22:38] Krystina Gustafson: But however, It also needs to be about experience. And so I think from our perspective, it's about, making sure you're still, you know, getting to see those technologies that you really need to run your business. We understand everyone has finite budget, so we need to make sure that we're still representing those sorts of businesses, but then also giving people the flexibility to imagine what it could look like in the future, whether it's using livestream shopping, you know, Is it going to be the metaverse. [00:23:02] So we didn't lean too heavily into that at the show,[00:23:04] Ricardo Belmar: Yeah, I noticed that.[00:23:05] Krystina Gustafson: it's not. I don't think As big of an opportunity. at least currently for grocery as maybe fashion [00:23:10] Ricardo Belmar: Maybe more maybe longterm. [00:23:11] Krystina Gustafson: Exactly, exactly. But, You know, we want to make sure that we do have some perspectives on that represented so that people can, you know, start thinking what? This might look like 10 years down the road.[00:23:20] Ricardo Belmar: Yeah. You know, an Interesting note as you've mentioned on the convenience track, one theme that I heard a lot of are from both retailers and brands that they're seeing consumers take a perspective, that rather than thinking ,what do I need to buy for the week?[00:23:34] It's now what I want to buy for tonight. [00:23:36] Krystina Gustafson: Yeah. Well, it's so Interesting.[00:23:38] And you know, it was also, I I've heard this from a couple of other speakers. I think Fidji Simo from Instacart was one, one person to talk about it. And actually I think from door dash, they were talking about it as well. It just really depends on what the shopping occasion is. Right. I feel like we've constantly heard. [00:23:52] Oh, you know, 15 minutes delivery is so great when you forget a certain ingredient. It's like, how often does that actually [00:23:57] Ricardo Belmar: Exactly. [00:23:58] Krystina Gustafson: We hear that phrase so [00:24:00] Ricardo Belmar: It's always like the first use case. Everyone brings up, But really how often, if you think about it yourself, how often are you in that position? [00:24:05] Krystina Gustafson: it's a Very very and quite frankly, if that happens, let's play my excuse to like order takeout. So I actually thought it was really interesting. [00:24:12] Oh, gosh, I wish I could remember the speaker who was talking about this, but It was essentially saying you know, 15 minute delivery isn't necessarily something that isn't going to work. It just needs to be a part of a broader portfolio. Right. So. If door dash is going to do, you know, 15 minute delivery. That's great. But they also need to have sort of a, the longer lead time sorts of options so that they can make those 15 minutes deliveries profitable and kind of the same thing to, to a retailer as well.[00:24:34] Ricardo Belmar: Right, right. So I have to ask you this question too, for your thoughts, because if I were to pick the one thing that I feel like almost everyone has talked about, and frankly, just walking down the hall. you see it visually everywhere. and that's retail media networks,[00:24:49] Krystina Gustafson: I knew you were going to say it. I [00:24:51] Ricardo Belmar: You knew where I was going with that. [00:24:53] Krystina Gustafson: Yeah. It's it's so funny. You know, when we are programming the show, We're always so careful because every single spot on our agenda is merit based. Right, We don't do any pay to play. That's a really big sort of sticking point for us. And so I think we've always been very careful when we're selecting technology vendors to speak on stage, it's, you know, we want you to be strategic. [00:25:11] Obviously we want you to talk about your solution, but we want you to, to sort of bring some thought leadership to this and talk about an authentic way. And we were laughing. We're like, we're going to have these conversations with the retailers, because all they want to do is go on stage and plug their retail media networks. [00:25:24] Ricardo Belmar: cause they're now in the business, right. Of selling to other businesses. They're suddenly a B2B business instead of just a B2C [00:25:29] Krystina Gustafson: Yes, it's getting very, very complicated. But no, I hear you. It's, it's been a huge theme of the show and I think just everyone Is very aware of the growth that is expected to come out of this. I think for me, a lot of the interesting discussions are about you know, sort of who's doing it well, what CPG brands need from their retail partners, thinking again, sort of about what's to come and sort of how these will play out in physical stores because I think that's also been kind of a big theme throughout the show is just kind of how, how the physical store is transforming. [00:25:54] And so it's going to be a really interesting space to walk over the next couple of years. [00:25:58] Ricardo Belmar: Yeah, it's interesting. I was talking with one of the speakers earlier that in one of my previous roles I did a lot of work with and this'll be dating a and I'll take them on a technology perspective of delivering digital signage solutions into stores. And I was joking with someone, you know, back in those days. As if we're only talking 2015, maybe. [00:26:18] You know, one of the pitches as a digital signage technology provider, we always had was to every retailer ,you know, you could turn this into a media network, right? You can talk to the brands that you sell and actually, so position advertising on these screens. Have you thought about doing that? [00:26:31] And what I find fascinating is that now everyone's talking about this now, right? We just don't use the words, digital signage, because that's, that has an awful connotation. Apparently. But I find that when we talked about it before, because I as the technology provider then was talking to someone in IT, about that. And it wasn't really an IT technology message. It was really more of a marketing, advertising message. [00:26:53] Oh, And it didn't involve people in store operations. So it tended to just go nowhere with most retailers that we tried that with, and it's just night and day difference with where we're at now [00:27:02] Krystina Gustafson: I love that point because I think that's so often what we kind of try to, I don't want to say the word preach, but I guess it is kind of preaching in some capacity. It's like you can't dismiss innovation at any capacity, right.[00:27:12] Like we were joking about the metaverse earlier and saying, okay, well we don't see the application today. It Doesn't mean there's [00:27:17] Ricardo Belmar: Doesn't mean there won't be.[00:27:18] Krystina Gustafson: Right. And there's going to be elements of that, AJ Dalal from Publicis Sapient actually did a presentation on, on what the applications for the metaverse could for the future of our industry and he was talking about it from, from, I would say more of a CPG perspective, but you think about sort of the opportunities for loyalty, you think about just kind of like actually assigning a value to some of these like NFTs or, or, you know, it doesn't have to be sort of this pie in the sky version of the metaverse that we're all reading about. Right. And so I think it's very easy to just kind of laugh and say, oh, that's never going to work. Right, But there are going to be certain building blocks to your point that even if they don't work today, maybe 10 years down the road, [00:27:52] Ricardo Belmar: right. right. [00:27:53] Krystina Gustafson: about [00:27:54] Ricardo Belmar: Or there could be, it could come surface up to the top and then priority for that. Yeah. Yeah, absolutely. [00:27:59] So last thing I wanted to ask you about.[00:28:01] What's your perspective on how the expo hall fits into the overall grocery shop experience, if there's anything in particular. that is catching your attention, that you're hearing feedback from folks about what they're experiencing walking through the expo hall. [00:28:15] Krystina Gustafson: Yeah, it's a great question. I mean, I think from our perspective, all week. I shouldn't say all we care about but the biggest priority. is that it's buzzy. Right. And that there's a lot of energy. And I have to say our I can take absolutely no credit for this, but our sales team and our ops team have done a fantastic job. Just kind of reinventing. I always thought that our our expo hall was very elevated. Just from, from sort of an experience, but we've really built up our lounges. So we have a relaxed lounge where you can go and sort of get massages. We have a swag store this year.[00:28:41] We've never [00:28:42] Ricardo Belmar: I saw it. [00:28:42] Krystina Gustafson: store before, so you can kind of go in and grab your Shoptalk Cuddy, which by the way, We're not allowed to grab because we have to save them for the attendees. So I'm praying. There are a couple of leftover.[00:28:50] Yeah. I'm. There's some leftover after the show, but, you know, get your grocery shop, branded water bottle and there's stuff in there I'm from sponsor. So that's been really fun. So I think. For us, it's just kind of trying to make sure the exhibit hall is a place that people want to be quite frankly I would say the addition to that is our hosted retailers and brands program is always kind of the heart of what we're trying to do.[00:29:11] I think serendipitous connections are fantastic. And, and, and, you know, everyone comes here, right. To see who they're going to run into have spontaneous conversations. But at the end of the day, sometimes a little bit of pre-planning. It goes a really long way. And so I think. [00:29:24] It kind of pairing that just kind of buzzy fun exhibit hall experience with the hosted program, where you come into the event having pre-planned meetings with, if you're a solution provider retailers or brands, or, you know, vice versa. [00:29:36] You know you're going to get ROI. And so I think in those capacities, like it makes it a little bit easier for you to be like, yeah, I'm just going to go grab a margarita and kind of like, enjoy the ride. [00:29:44] Ricardo Belmar: Right, right. Yep. Absolutely. Absolutely. [00:29:47] Well, Krystina, thank you so much for joining me here. It's been a pleasure chatting with you. I'd love going through all the ins and outs of what's going on here at grocery shop and you know, just kudos again, to pulling off such a great event. It's been a fantastic experience. [00:30:00] Krystina Gustafson: Awesome. Well, it's been good to have you here and thanks for having me join you. [00:30:03] Ricardo Belmar: Great. Thank you! [00:30:03][00:30:03] Show Close[00:30:03] 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 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. [00:30:38] 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.[00:30:54] Casey Golden: Thanks for joining us.[00:30:56] 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. 

Missed Groceryshop 2022? Not to worry, we’ve got you covered! Welcome to another SPECIAL EDITION season 2, episode 3, Part 2, Groceryshop recap!We’re bringing you 6 great interviews recorded live and in-person at Groceryshop in Las Vegas, NV, bundled up in 3 episodes with 2 interviews each. For part 2, we hear very unique perspectives from two amazing, experienced grocery retailers. First, we speak with Lisa Kinney, VP of Customer Market Intelligence for Albertsons, who talks about the value of data in grocery, and asks the “why” question in a way that no one really expresses on stage at a show like Grocery Shop. Then we chat with Dave Steck, VP of IT Infrastructure and Application Development for Schnuck Markets. We get into why his approach to emerging technologies at Schnuck Markets is so different from what we hear from other grocers. You'll be hard pressed to find more unique insights and commentary anywhere else in less than 30 minutes!We’ll be back soon with 2 more Groceryshop themed episodes and another 2 amazing interviews!News update! We’re at #21 on the Feedspot Top 60 Best Retail podcasts list, so please keep those 5-star reviews in Apple Podcasts coming! With your help, we’ll move our way deep into the Top 20! Leave us a review and be mentioned in a future episode! 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 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. 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 Swag Tag and Brag, and Overclocked, from the album Beat Hype, written by Hestron Mimms, published by Imuno.The Retail Razor ShowFollow us on Twitter: https://bit.ly/TwRRazorConnect with us on LinkedIn: https://bit.ly/LI-RRazorSubscribe on YouTube: https://bit.ly/RRShowYouTubeSubscribe on Apple Podcasts: https://bit.ly/RetailRazorShowRetail Razor Show Episode Page: https://bit.ly/RRShowPodHost → Ricardo Belmar,Follow on Twitter - https://bit.ly/twRBelmarConnect on LinkedIn - https://bit.ly/LIRBelmarRead my comments on RetailWire - https://bit.ly/RWRBelmarCo-host → Casey Golden,Follow on Twitter - https://bit.ly/twCaseyConnect on LinkedIn - https://bit.ly/LICaseyRead my comments on RetailWire - https://bit.ly/RWCaseyTRANSCRIPTSPECIAL Edition: Groceryshop 2022, Part 2[00:00:00] Ricardo Belmar:[00:00:20] Introduction to Part 2[00:00:20] Ricardo Belmar: Hello, and welcome to season two, episode three, part two of the Retail Razor Show. I'm your host, Ricardo Belmar [00:00:27] Casey Golden: And I'm your co-host, Casey Golden. Welcome Retail Razor Show listeners to our unapologetically authentic retail podcast for product junkies, commerce technologists, and everybody else in retail and retail tech alike. So Ricardo, part one of our grocery shop series was quite interesting. We heard from an awesome startup, Grocery Shopii and their CEO Katie Hotze. She was amazing and really makes me wanna go shop for groceries, which I haven't done in literally years. which is pretty incredible. [00:01:01] Ricardo Belmar: Katie is pretty amazing. You have to love her approach to making grocery shopping easier, healthier, and to me most importantly, faster while saving money. Definitely expect to hear more about Grocery Shopii in the future.[00:01:14] Casey Golden: Absolutely. And then you talked with Stuart Samuel about trends at the first half of the show. No surprise there, retail media networks, just as we predicted at the beginning of the year, were very p rominent [00:01:27] Ricardo Belmar: And no doubt about it. And he also talked about a few other trends around profitability with eCommerce, convenience services and current shopper trends driven by economic conditions. For listeners, if you haven't checked out part one, you definitely need to. [00:01:41] Casey Golden: So Ricardo, what do we have coming up in part two for this episode? [00:01:46] Ricardo Belmar: This episode may just blow your mind. I, I interviewed two experienced retailers in grocery, Lisa Kenney, VP of Customer Market Intelligence for Albertsons, and Dave Steck, VP of IT Infrastructure and Application Development for Schnuck Markets. Each of them gave a very unique perspective on many of the trends we heard about in part one.[00:02:06] In fact, I think you'd be hard pressed to find more unique insights and commentary anywhere else. If you're wondering why I say that, it's because both take a very different view of technology trends in grocery and start by asking one of my favorite questions, and quite frankly, probably one of the most valuable words in any language... why?.[00:02:24] Casey Golden: Wow, that's quite a setup you just dropped. Tell us some more.[00:02:28] Ricardo Belmar: Well, I wanna give everything away, but, Okay. A few spoilers. Lisa and I talk about the value of data in grocery, and she asks why in a way that no one really expressed on stage at the show. She goes into detail on the behind the scenes conversations grocers have at a show like Grocery Shop that you don't normally hear on stage.[00:02:47] And if that isn't shocking enough to listen to, she offers a very different take on retail media networks that may just completely change your perspective on this.[00:02:55] Casey Golden: Okay. Wow. Now I really wanna jump into this. Is your interview with Dave just as juicy. [00:03:01] Ricardo Belmar: You bet. Dave is practically an icon at Grocery Shop. He's been on stage at every Grocery Shop each year talking about emerging technology like robotics, IoT, and more. We get into why his approach and what Schnuck Markets is doing seems to be so different from what we hear from other grocers. And spoiler alert when you hear him explain why, you just might have some flashbacks to our episode with Andy Laudato from the Vitamin Shoppe about his book Fostering Innovation.[00:03:27] It all comes down to corporate culture, and you'll hear what I mean by that. It's pretty powerful.[00:03:31] Casey Golden: Okay, so I thought part one was jam packed with incredible nuggets. Now you're making me think part two is going to top that. [00:03:39] Ricardo Belmar: Well, don't say I didn't warn you. If you wanted to take notes during part one, then you better get some extra sheets of paper out for this one. It's just crazy. This is an episode that I would put under the column of things that make you go, hmm.[00:03:51] Casey Golden: All right. Now you're just going totally over the top with that kind of setup. We better just dive right in and get right to it. I'm stoked. Let's listen together to Lisa Kinney and Dave Steck recorded live and in person at Grocery Shop 2022.[00:04:08][00:04:08] Lisa Kinney Interview[00:04:08] Ricardo Belmar: and welcome to the Retail Razor Show Special Edition Groceryshop Episode. I'm here today with special guest Lisa Kinney, VP of customer market intelligence. for Albertsons. Welcome to the show, Lisa. [00:04:28] Lisa Kinney: thanks for having me. It's a pleasure to be here. [00:04:30] Ricardo Belmar: So you and I were chatting a little bit before we recorded about what seems to be the most interesting here at the show are the things that we're not hearing people talk about on stage. [00:04:39] Almost like a what's behind the scenes, really of interest and value to people in the industry. And we kind of ended up landing on a discussion about data. With which to be fair, right. Has been a big part of a lot of the discussions on stage, but they've all centered around what I would call the outcome of what you do with the data you have that might be customer facing and it might be more B2B facing because as a retailer, I'm going to sell a service around this to someone else, but you had a very unique and interesting perspective about how grocers are looking at the data. [00:05:13] Lisa Kinney: Yeah, I think. There's a few things, Thanks for teeing that up. I think. The things that aren't discussed on it, that are discussed amongst peers, which is wonderful that after 30 years in this business, We have, we have industry peers that work with competitors that work You know, that are in consultancy now. [00:05:33] And we've all been in the data game for quite some time, at least myself in particular. , and so it's nice that the conversations offstage are really about like, are you guys running into this problem too? [00:05:44] Are you worried about what I'm seeing or that isn't being talked about? And it's nice that we can put down the, I work for X company. [00:05:52] And I need to view you as a competitor and we actually then have a lot of off the record great conversations around what's really happening behind. You know, behind the tent per se. [00:06:03] And so on the data space as I was listening to, there's a couple of things first, I'll talk about just this, I think it's, been a revolution of technology. And I think we talked a little bit about.[00:06:13] Look. Yeah. The change that's happened has been out of an uncontrollable demand that really accelerated everyone to solve for things that have been problems for, for quite some time. Perpetual inventory, you know, finding ways to optimize labor, finding a shorter path to distance from farm to table. All of those things have been on the minds for all of us.[00:06:35] for quite some time, but I don't think has been quite as pressing up until now. So. When we think about the data side. Now we have all this new, cool technology like scan and go and new frictionless payment. [00:06:46] Systems and, and the smart cards and, And in my mind, having monetized data for so many years, I'm asking, gosh, I hope all these partners that are working with these new tech companies recognize that really the race is the data race.[00:07:02] it's all about the data. [00:07:04] Ricardo Belmar: all about the data. [00:07:05] Lisa Kinney: And even when we were talking, oh, We were talking offline about the Instacart proposition and it was very clear today that an advantage that they have built through the data that they're collecting and a very challenging channel to understand which is the e-commerce channel. So I look at it like, I hope that everyone is thinking about.[00:07:25] Who's really trying to, is it really about providing a service that's going to meet the needs of customers? Or is there an underpinning of data. that has high profitability, really high margins, and ultimately is really what they're going after. So I just think we have to be a little careful. [00:07:41] Ricardo Belmar: Yeah. It's part who do you choose as the partner and then part, once you've chosen the partner, how do you define the relationship? [00:07:48] Lisa Kinney: How do you define the relationship? And I think one of the the most telling questions anyone could ask is how do you make money? [00:07:53] Ricardo Belmar: Right. What's their business model.[00:07:55] Lisa Kinney: What is your, like how do you make money? And ultimately when you start peeling the layers, you might find that it might even be not profitable at all. But they are banking on, you know, and I'm not, I'm not speaking disparagingly of[00:08:07] Ricardo Belmar: Yeah, right, right, right. [00:08:08] Lisa Kinney: But, but I just think it's something that's woven throughout all of this. That's not necessarily Front and center in the discussion. [00:08:15] Ricardo Belmar: Yeah. And it's so something you have to think about to see how it solves your problem. Right.[00:08:19] Yeah. Yeah. Oh, so along those lines, one of the other things we were talking about before that, that very directly relates to everything about data is what's happening around retail media networks. What are your thoughts there? [00:08:32] Lisa Kinney: Yeah. And so I'll speak. And As a reminder. and disclaimer, I am only speaking as Lisa Kinney. 30 years of being around the block a few times. And so this is just my opinion.[00:08:44] So my opinion is something's going to disrupt this whole retail media ecosystem that's being developed right now. I think every retailer is looking for ways to drive alternative revenue. I think that's of no surprise. I think the data game was really it 20 years ago. I think Kroger obviously, and, you know, having worked with them in that space. [00:09:05] In the very beginning. When that was being developed. it was a data play for a long time and then it, And then it's become a media play. And I think every retailer is my audience is bigger than your audience. or my partner is better than your partner. So, you know, I can I can now do. attribution and get brand dollars and the, in the digital TV world and I can do right.[00:09:26] Ricardo Belmar: right. Yep. All about making it more attractive to the [00:09:28] Lisa Kinney: Yes. Yes. And as a brand, having been a brand long, long ago. so really long time I start thinking about. okay, so now. I'm a trade planner. I'm in trade marketing. Where does. Where does. Retail media fit in to that? I know, I used to say it doesn't come out at trade dollars. I mean, that was my selling profit. That it doesn't come out a trade, it's it's, this is brand funded. [00:09:55] And perhaps it's a bit true, but as a brand then, so now I'm the brand owner, so I'm, I own brand X. And I've got to make a decision on how I take my media plan that I want to develop for my brand and now I've got to go sell it in and try and figure out how to activate. Against all these retail audiences and quite frankly. just so that we all understand. These audiences are all overlapping. [00:10:18] Ricardo Belmar: Right.[00:10:19] Lisa Kinney: It's an 80% of the cases. I'd say they're the same. So, So are you going to pay four times to reach that? So it's interesting. I mean, maybe I'm being too simplistic about it, but I'm like, I wonder, I wonder. Who's going to come in and say, you know what, don't worry about going direct to retail. Don't worry about each individual. RMN We've got the solution for you. I don't know if it's in the payment space.[00:10:43] I don't know if it's going to be, I mean, I hate to name company names, but I really feel like someone's going to come in and say, this is a really fragmented world to talk to the same shared common customer. And Somebody has access to that shared common customer And it might actually not be the retailer. [00:11:01] Ricardo Belmar: Yeah. [00:11:01] yeah, but they can kind of give you an aggregated view [00:11:03] Lisa Kinney: Sure [00:11:04] Sure [00:11:05] Ricardo Belmar: retailers, right? Because they know who they may know who the customer is. They may have a better data point that, that kind of fingers out at you. It's this customer [00:11:13] And they visit these four stores or these four different retailers. So I can help you target them much better than the individual retailers [00:11:20] Lisa Kinney: correct! Cause you're going to pay 10 X and that particular person's. to the highest bidder, like, [00:11:25] Ricardo Belmar: Exactly. I think It's a fascinating. point because it kind of brings us almost back full circle, right. To how all advertising started. Where you had these access to gigantic audiences. In a more centralized way to reach as many people as you could. And in some ways, I guess for me, that goes a little bit against the retail media premise that you're trying to, I'm kind of pitching to you. I have a narrow focused audience that is therefore, because it's narrowly focused more valuable to you. At least I think that's the premise, and that's the pitch. [00:11:54] But to your point, if you're the brand well, is that really what I want is that helping me. [00:11:59] Is it too narrow? Do I need to kind of back up and say, well, I need, I need a broader reach because I'm a national brand. I need to reach as many. It's great that I know who I'm reaching more specifically, I'll use an example like where I live, there is, I don't know, four or five different grocery stores nearby. [00:12:15] So I'm pretty sure if I guessed the people in my neighborhood, don't all say I only ever go to that one store and I never visit the other three [00:12:23] Lisa Kinney: We'll call that never. [00:12:24] Ricardo Belmar: Yeah, I think that's the never use case. Nope. Nobody acts that I think if you asked everyone in my neighborhood and would say, oh yeah, of the five grocery stores, I probably regularly visit three[00:12:33] Lisa Kinney: Correct. [00:12:34] Correct. And I think that that's the interesting pieces because I, I. There's a part of me. that's at one point whichever. retailer just says, you know what, I'm not going to, I'm just going to, I'm going to take my data and I am just gonna pipe it to the top three agencies that do all the brand media. [00:12:52] Like the, you know, the top ones, right. I'm just going to pipe my data there. And, And and let them go, like, buy audiences you have all our behavior data. I mean, I'm talking a world of like what ifs and that would not happen, but you think about it. I'm like maybe that would be the first for winner. [00:13:08] Ricardo Belmar: Yeah. Well, maybe if there's that sort of aggregator out there that comes whether it's a revenue share or some other business model that. That you know, it helps create that incremental stream that.[00:13:17] Lisa Kinney: Or it's just not a retailer at all. And it's somebody [00:13:20] Ricardo Belmar: Whereas somebody else, it could be a, it could be a new tech company that hasn't come, come[00:13:23] Lisa Kinney: Correct. It's coming. [00:13:24] Ricardo Belmar: out how to do it. Yeah, [00:13:25] no that's a [00:13:25] Lisa Kinney: fragmented. I think, I think it's just, you know one plus one plus one. Yeah.[00:13:31] Ricardo Belmar: Equals five. [00:13:32] Lisa Kinney: Exactly. Exactly because it's all incremental. right. It's all incremental. That's impossible.[00:13:38] Ricardo Belmar: Yeah, no, that's a great, great point. [00:13:41] Well, Lisa, thank you so much for joining me today. This has been fascinating. I mean, a really different kind of perspective. From everybody I've been talking to so far. I think I'm really intrigued by this idea you brought up that, there there's another solution out there that we're Not quite seeing yet. that somebody is going to come up with. That's going to solve this problem. In a bigger and better way. [00:14:00] Lisa Kinney: Until then. I think that the retail media spaces is transforming quickly. And I think that there's money to be had. And I think that It'll be a fun, profitable, ride for many for, for, for awhile.[00:14:13] But I just don't think that that's going to be the model that's for forever. I just can't envision it, but that's probably an unpopular opinion. So it's just mine. It's just my[00:14:21] Ricardo Belmar: Yeah. Well, we'll see how it plays out. We'll see how it plays out. And then we can, we can all see who was right about the prediction.[00:14:27] Lisa Kinney: Yeah, right. I know nothing. It's just an observation. [00:14:30] Ricardo Belmar: exactly. Well, Lisa, thanks again for joining me. It's been great talking with you about the grocery spac e[00:14:37] Lisa Kinney: Yes, it's been wonderful. Thanks for having me. [00:14:38][00:14:38] Dave Steck Interview[00:14:38] Ricardo Belmar: welcome to the Retail Razor Show Special Edition at Grocery shop 2022. [00:14:53] Continuing our series of conversations with true retail transformers to talk all things, grocery and consumer goods.[00:15:00] I'm here now with Dave Steck VP of IT, Infrastructure and Application Development for Schnuck Markets. Dave it's great to have you on the show. And then I have to say you, You must be becoming a, a grocery shop, mainstay as I think you've been a speaker at every single grocery shop haven't you? [00:15:14] Dave Steck: That's correct. [00:15:15] Ricardo Belmar: Well, it's wonderful to have you with us here today. So I guess I have to say the, obviously the reason you've been invited year after year to be a speaker at the show is that you've, you've led a number of innovative technology initiatives at Schnuck Markets. and ranging from deploying robots, IOT, computer vision. and other things in store. [00:15:34] Let's get started by kind of walking me through all these different technologies that you've been talking about and then what your experience has been with them. And getting them deployed to stores and what challenges they're helping you solve. [00:15:44] Dave Steck: Well, obviously, I always talk about robots[00:15:46] Ricardo Belmar: Yeah. Yeah. [00:15:47] Dave Steck: that was really kind of the first big one that big splash, because everybody's interested in that. and that really started in 2017 with simbe robotics to just understand that technology and what the capabilities were. I think the, the The funny thing. I talk about. Quite often as when we first deployed those that got a lot of press and, I was interviewed. I was interviewed quite a bit by the local radio stations and one of the quotes that I remember saying is, you know, We're most interested in the data that comes back from this. I had no idea what I was talking about. It just sounded good at the time. [00:16:21] But the reality is. You start to understand that data that's coming back from a robot and all the different capabilities that it enables within the, within the business. And that data is just invaluable. [00:16:35] So that's, that's one of the big things that we've been doing. We've looked at lately. Look, electronic shelf labels is another big business enabler for us as well. And that's through different evaluations, we've evaluated three different. Three different types of tags and settled on pretty much settled on one at this point getting ready to, to roll that out across the chain. If the value proposition holds up, like we [00:16:58] Ricardo Belmar: Yeah Okay [00:17:00] Dave Steck: So, but that there's a lot that goes with electronic shelf label as well as far as capability. [00:17:06] Ricardo Belmar: Yeah. [00:17:09] what have been some of the things that, you know, you were really looking for. As like your, your top value that you want to get out of the electronic shelf labels[00:17:15] Dave Steck: Well, it's an interesting. That's an interesting question because when we first looked at this. Years ago, years ago, I've only been with the company for eight years, but you know three or four years ago. As a matter of fact, the reseller that, that we're working with came and quotes me back on this is. I told him the math equation doesn't work. And it didn't work, but post COVID.[00:17:38] Ricardo Belmar: Yeah Yeah [00:17:39] Dave Steck: when you're, You're looking at a dwindling labor pool. And you're trying to add the value to the customer and not just going through repetitive processes. You still have to have an ROI. But, but now you have to look at it a little differently. So. The. The math equation is is entirely different.[00:18:01] And that's what makes this kind of exciting is it's something now that. We can do. And now that we can do this. What is the value you can get out of [00:18:12] Ricardo Belmar: Okay you're kind of backing into it in a different way.[00:18:14] Dave Steck: Right. So, you know, understanding, pick to light. Stock to light. People think. Well, everybody in the store knows where everything's at, the store teammates know it. [00:18:24] Right. Yeah. You have to think about turnover. But even then, you know, I've been in the store where there's a stocker that's 10 years with a company. And he loves the ability to turn on the light when he can't find an item, he says, I don't know where everything's at. He said, I've been here years. I still don't know where everything's[00:18:43] Ricardo Belmar: Yeah. [00:18:43] Dave Steck: So you get that. You can get into other capabilities as well, which, you have all these AI pricing engines, Eversight is who we use, But with Eversight you have to be able to change tags on a fairly frequent basis. But with COVID and dwindling labor supply, you can only change so many tags. and then you really have no true way of verifying that that tag was actually hung. So you could be making some AI pricing decisions based off of bad data. With the ESL now, you've got, you know, that, that price was [00:19:20] Ricardo Belmar: You can verify and you've got the validation that the change is made. [00:19:22] Dave Steck: So we're not, we're not, we're not there yet because we don't have ESLs deployed across the company, but that is definitely something that we're looking at as far as capability. There's other, other value That comes from ESL, you can do day part pricing. Other special promotions. You[00:19:37] know for customers who are in your loyalty program ,if there's something that they're looking for.[00:19:43] Ricardo Belmar: Yeah. [00:19:43] Dave Steck: They can push. You know, light up the light as well within the app. So they can actually find the item that they're, that they're looking [00:19:50] Ricardo Belmar: So with a lot of these things that I've heard you talk about this before, and even in past grocery shops, the is the time-saving factor for the workforce in the store, is that typically a major factor that goes into the ROI for you? [00:20:04] Dave Steck: Good question. [00:20:05] Though the robot. So let's start with the robot robot. Everybody thought was well we're, we're cutting hours because you're using a robot [00:20:12] Ricardo Belmar: Yeah [00:20:12] Dave Steck: And the reality is It wasn't so much a time-saving as it was in accuracy. That the time that we, we allow for at the time. We were doing this. was Four hours a week for store teammates to scan outs. You can't get that done in four hours. When we, we did ourselves, we send it people in there, it took us 12 hours to you go. Yeah. So, doing the, robot wasn't I'm going to cut hours. It was, I'm going to get the experience. for the customers and get the products on the shelf. That's know, you, If you go in. I think it was every three hours or four hours. They had to use the laser temp sensors to go and check all the cases. And. I, if you look at the logs, You know that. The temp. Was never read. It was just somebody writing down. writing down. what they felt like writing down. So, [00:20:57] Ricardo Belmar: yeah. [00:20:58] Yeah. Most likely because of the time involved. Right.[00:21:00] If they want to get it done. [00:21:01] Dave Steck: And you also have no reliance on how they did. it. Everybody has A different way. of doing it. And if they're looking for a certain temperature, they can find it in the case and they can write that temperature down. So with, with temp sensing, you're you're getting a consistent location for the probe or the sensor. [00:21:21] And it's consistent time and you can again, build a data algorithm around that, to know. Your case health. And if there's something going wrong, you get notified about that. And I. We have other sensing within our cases. That is more sophisticated. That's looking at compressor temperatures. And pressure And all that, but getting it into each four foot door. It makes a big difference. [00:21:44] Ricardo Belmar: yeah. no, that makes sense. That makes sense. [00:21:45] So let me ask you this. Cause one thing I've noticed, I've kind of been looking for who else is talking about doing these same kinds of technology deployments that you've done. And I feel that I'm not hearing as much as I would think I would given the amount of time that you've already had these things in place. The years you've invested in getting it deployed. I'm curious what you think are the things holding back, other grocers from doing what you've already done? [00:22:12] Dave Steck: From our perspective. our, from my perspective, we have a mandate. I got, I guess you could say it's a mandate to try new things. And We are, we are constantly trying to try new things. So, there it's part of our reviews. Are you, are you trying new things? So that, that helps. We're family owned. 112 stores. So we don't have the bureaucracy that you get into these large corporations and I've worked for large corporations and I know that the ideation is great. But the execution just gets bogged down because everybody [00:22:48] Ricardo Belmar: Everybody has to have a say in it and be involved. [00:22:50] Dave Steck: Right Yeah. [00:22:51] Ricardo Belmar: it becomes your decision by massive committee. Yeah. Yeah. Right, right.[00:22:56] Dave Steck: analysis paralysis. [00:22:57] Ricardo Belmar: Exactly Yeah. So you're kind of saying it comes down to that corporate culture. And how innovation centric is that culture and their ability to execute on any given innovation.[00:23:06] Dave Steck: Yeah. And you also have a fear factor. [00:23:08] With that as well. Right. A lot of people are scared for their jobs. [00:23:11] Ricardo Belmar: Yeah [00:23:12] Dave Steck: And if you don't have that culture, which failure is okay. [00:23:18] Ricardo Belmar: yeah. that's [00:23:18] Dave Steck: nobody's, nobody's going to try it. [00:23:20] Yeah, [00:23:20] I'm not going to stick my neck out. It's you know, it's like why everybody bought IBM [00:23:25] Ricardo Belmar: Yeah, because you couldn't go wrong. Nobody got fired [00:23:27] Dave Steck: Nobody got fired over [00:23:28] Ricardo Belmar: Yeah no that's a good point. .[00:23:28] So if, If you have someone who's trying to do the, these kinds of things and they look at you and say, Dave, what are some of the lessons you've learned that if you were to go back and do it all over again, What would you do differently? [00:23:40] Dave Steck: Yeah, there's been some big failures. [00:23:42] Ricardo Belmar: Yeah.[00:23:42] Dave Steck: Sometimes. You try Too hard to get to the end result. and you go too fast. There's been a number of things that we've rolled out that we just went crazy and got the implementation done to to get to the end result or the cost savings or whatever. And you stand back and you look at it and you go. Yeah, that was a big mistake. But then, but then you've you fight your way through it? It's. Failures only failure if you allow yourself to say I quit. Right. If If you fail. And keep trying. and fix the problem, then it's not really failure. It's [00:24:19] Ricardo Belmar: it's a learning [00:24:20] Dave Steck: It's a learning experience, and you still get to what you need to get to. It just is a little bit painful. [00:24:25] Ricardo Belmar: Yeah, I completely agree with you. It's one of those things that I think it goes back to that corporate culture and culture of innovation as to how the whole organization wants to support that. Because just like you mentioned earlier, there's that fear of failure. And if that's a valid fear, then nobody wants to fail. Right. nobody wants to try anything then because they might fail. [00:24:44] Are there any other technologies like this? You know, you, cause you've done a lot at this point, you've really made good use of all of these things we call emerging technologies in this space. Uh Apart from the electronic shelf labels, are there anything else catching your eye that you're really looking at, either studying or thinking about that's where we're going next. [00:25:01] Dave Steck: Well, a smart carts are, are one thing. Yeah, I've looked at the Amazon go type concepts. [00:25:06] Ricardo Belmar: Yeah. [00:25:07] Dave Steck: It's great, but the infrastructure that's associated with that, the retrofitting of a building I think. I think smart carts are one thing that's really got some, some traction in it. You see more and more of the self scanning as you're, as you're shopping. That's. Failing in places you have too much theft. There's a couple things that I've looked at that. I think our really cool. That I really don't know where the business cases for it. We were looking for indoor GPS. [00:25:33] Ricardo Belmar: Okay.[00:25:34] Dave Steck: So I went through a number of different things with beaconing and we went into visible Did you ever see visible light communication? [00:25:42] Ricardo Belmar: I I looked at them once before, too. [00:25:44] Dave Steck: Yeah. that's really. [00:25:45] Ricardo Belmar: Yeah. [00:25:46] Dave Steck: Really accurate. but the customers all hate you because you could kill their battery before they're finished their shopping journey and then You have orient out there, I don't know if you've seen orient or not which is an Israeli company. that does indoor positioning and they're using it on the, off the phone. super accurate but. It's it's understanding. As time. has evolved for us and we've gotten further away. It's how do we, how do we incorporate that, capability into our app and the experience for, for the end customer. And I think eventually we'll get there, but indoor positioning is going to is going to stick at some point. It's it's important. [00:26:19] Ricardo Belmar: Yeah, I think that's definitely [00:26:21] Customers want that, customers want the benefit from that one. [00:26:24] Yeah. Yeah, absolutely. [00:26:26] Well, Dave, I really appreciate you joining me today. This has been a fascinating conversation. I love hearing all the different things that you're trying and hearing about the culture of your organization and how you guys go about trying new things. I think that's fantastic. Thanks so much for joining us[00:26:40] Dave Steck: Thank you for having me! [00:26:41][00:26:41] Show Close[00:26:41] 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 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. [00:27:15] 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.[00:27:32] Casey Golden: Thanks for joining us.[00:27:33] 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. 

Missed Groceryshop 2022? Not to worry, we’ve got you covered! Welcome to our SPECIAL EDITION season 2, episode 3, Part 1, Groceryshop recap!We’re bringing you 6 great interviews recorded live and in-person at Groceryshop in Las Vegas, NV, bundled up in 3 episodes with 2 interviews each. First up, we talk with Katie Hotze, CEO and Founder of Grocery Shopii, a grocery tech startup you’ll be hearing more about if you haven’t already. Katie is helping busy families experience grocery shopping in a fun and healthy new way with endless recipes and maximum convenience. All while saving them money – what could be better? Then we catch up with Stewart Samuel, global insights leader at IGD for the scoop on what’s trending during the first half of Groceryshop. Naturally, retail media networks take center stage, but that’s not the only trend Stewart highlights. Be sure and catch our season 1, episode 4 Predictions for 2022 episode for Ricardo & Casey’s take on retail media networks!We’ll be back soon with 2 more Groceryshop themed episodes and 4 amazing interviews with grocers, analysts, and a special guest!News update! We’re at #21 on the Feedspot Top 60 Best Retail podcasts list, so please keep those 5-star reviews in Apple Podcasts coming! With your help, we’ll move our way deep into the Top 20! Leave us a review and be mentioned in a future episode! 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 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. 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 Swag Tag and Brag, and Overclocked, from the album Beat Hype, written by Hestron Mimms, published by Imuno.The Retail Razor ShowFollow us on Twitter: https://bit.ly/TwRRazorConnect with us on LinkedIn: https://bit.ly/LI-RRazorSubscribe on YouTube: https://bit.ly/RRShowYouTubeSubscribe on Apple Podcasts: https://bit.ly/RetailRazorShowRetail Razor Show Episode Page: https://bit.ly/RRShowPodHost → Ricardo Belmar,Follow on Twitter - https://bit.ly/twRBelmarConnect on LinkedIn - https://bit.ly/LIRBelmarRead my comments on RetailWire - https://bit.ly/RWRBelmarCo-host → Casey Golden,Follow on Twitter - https://bit.ly/twCaseyConnect on LinkedIn - https://bit.ly/LICaseyRead my comments on RetailWire - https://bit.ly/RWCaseyTRANSCRIPTSPECIAL Edition: Groceryshop 2022, Part 1[00:00:00] Ricardo Belmar:[00:00:20] Introduction to Part 1[00:00:20] Ricardo Belmar: Hello, and welcome to season two, episode three, part one 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 Razor Show listeners to our unapologetically authentic retail podcast for product junkies, commerce technologists, and everybody else in retail and retail tech alike. Now, Ricardo, did I hear you right? You said part one? [00:00:45] Ricardo Belmar: That's right. This is our special edition episode on grocery shop. I was fortunate enough to attend the show and managed to sit down live and in person with six people to record a few interviews for our listeners.[00:00:58] Casey Golden: I wish I could have been there and that's probably the first time. I will admit that I wanted to go to grocery shop. I hear it was a great show. [00:01:06] Ricardo Belmar: It, it was, it definitely was. Of course it wasn't as big as shop talk. But there were about 4,000 attendees and I'd say a pretty good percentage of retailers and CPG brands there. That was probably the best grocery shop yet. And, you know, we'll hear more about that through some of the interviews too.[00:01:21] Casey Golden: that, explains these special episodes and everything. But why part one? what what's coming up [00:01:26] after that? [00:01:27] Ricardo Belmar: Well, I did mention six interviews, so we're gonna stitch these together two interviews at a time in this episode, and then we'll quickly release part two and part three right behind this one with the other interviews, so you get some bites sized episodes in rapid fire from us.[00:01:41] Casey Golden: Awesome. No one's ever accused us of having episodes that are too short. So who do we, Who do we have lined up for this show? [00:01:51] Ricardo Belmar: We are gonna jump in to highlight a very cool grocery tech startup that I'm sure we're gonna be seeing a lot more of In the months to come, we'll have Katie Hotze, the CEO of Grocery Shopii. She's amazing, wonderful. Can't wait for everyone to learn more about Katie and what she's doing helping busy families shop for groceries in a more experiential way, leveraging a never ending collection of recipe.[00:02:16] All while saving you money doing it. I mean, what could be better?[00:02:18] Casey Golden: Does she cook?[00:02:19] Ricardo Belmar: almost Yeah. I guess you could maybe if they cooked it for but know. [00:02:25] Casey Golden: No. I'm all in for startup spotlights and looking forward to that guest. [00:02:31] Who's our second guest? [00:02:32] Ricardo Belmar: So from there, we are gonna jump to an industry analyst perspective. About halfway through grocery shop, I sat down with good friend, Stewart Samuel, Global Insights Leader at I G D, Now to talk about the trends that we're surfacing halfway through the show. You know, we, we did manage to overcome some kind of annoying technical challenges in the podcast room for this interview with the equipment in the room.[00:02:54] But I think we came out with some really good insights for grocers and brands. So of course we are gonna hear about one of the biggest trends coming outta grocery shop, retail media networks.[00:03:04] Casey Golden: We really nailed that prediction for the year, didn't we?. [00:03:06] Ricardo Belmar: Oh, yeah. A hundred percent. A hundred percent. , and you couldn't walk down a hallway at the show without seeing somebody's branded ad from a retailer promoting their retail media networks. I mean, Walmart Connect was everywhere to the point where I, I'm not even sure anyone from Walmart was there to actually attend the show.[00:03:22] They were there to sell their own retail media services to other retailers.[00:03:26] Casey Golden: wow. Now wait, you said one of the top trends. What else was trending? Was there something bigger than retail media? [00:03:34] Ricardo Belmar: yeah, there were other trends, you know, like convenience, the, the omnipresent omnichannel that you know, shows its head at every show. And an oldy but a goody, personalization. I'm not sure about that one. Maybe grocery industry was just figuring that one out. Cause it's not like we haven't been talking about that one for a while.[00:03:49] But for, for the absolute top trend for that answer, you're just gonna have to listen to the interviews. Believe me, part two and part three will be very illuminating. Let's just say we've saved the best for last while sprinkling a few important nuggets here and there along the way, but there'll definitely be some surprises.[00:04:04] Casey Golden: Wow. With that kind of setup, this must be the most jam packed full of value hitting you every minute series of episodes we've done, and I can't wait to hear it because I will be hearing it for the first time with our listeners as well. So let's dive in and get right to the live recording in person interviews from Grocery Shop 2022. [00:04:25] Katie Hotze Interview[00:04:25] Ricardo Belmar: welcome to the retail razor show. Special edition episode at grocery shop 2022. I'm here at the show in Las Vegas with a series of amazing guests, as part of our retail transformers series to talk all things, grocery and consumer goods, and to kick off the series, I'm here with Katie Hotze and the CEO and founder of Grocery Shopii. [00:04:52] I'm thrilled to have you here, Katie. Welcome to the show. [00:04:54] Katie Hotze: Thank you for having me. It's a lot of fun! [00:04:56] Ricardo Belmar: So to get started. Why don't you tell us about yourself and what led you to create Grocery Shopii? You can give us the background and what Grocery Shopii is all about. [00:05:03] Katie Hotze: Sure, sure. So so myself I am a digital marketer and I spent about 18 years in management technology consulting. [00:05:10] This was an idea that I had off the side of my desk because I was super busy mom. And was trying to figure out how to get the recipe process of finding them and getting them. Getting the ingredients. And having it all in the kitchen. At five 30 on a Tuesday when I roll in hot from work and I've got kids, you know, grabbing my leg, telling me they're starving. [00:05:31] And so yeah. Yeah, there was you know, we, I lived in Chicago at the time and the grocer that you know, could deliver to the house, I'd opened the app and. Or the web browser and would add a couple of random items to cart and I'd never checked out. And so I knew there had to be a better way. And so I ended up creating a prototype myself to do so. [00:05:50] so the company evolved over, gosh, You know, 20, 19, 20 20. We, we just really began this journey of figuring out what types of need really existed was my need unique. It turns out it's not. And yeah, so we've been off to the races really since 2019, but with the Grocery shopii meal planning applications since 2020. And yeah, we are a digital meal planning application for grocery e-commerce. We actually integrate directly with the grocers existing e-commerce platform. And we become a connection point to their front end web site. And so we grab approximately one out of every nine shoppers interest into our platform to do meal planning and online grocery shopping in five minutes flat. [00:06:30] And then yep. So we get them to, and through check out as fast as possible. And when we do, they come back four times as and they spend 18 to 30% more per cart. [00:06:38] Ricardo Belmar: So I'm sure a lot of people hearing those numbers are literally going to say, wow, that's pretty amazing. I have to say, being someone who reluctantly does grocery shopping every week in my household. And particularly I'm one of those people from the pandemic who thoroughly took advantage of online ordering to avoid going to the store. and I have to say you put a really unique spin on that whole process of kind of adding a discovery process in my mind, right? To grocery shopping, which I've personally always kind of viewed as a pretty mundane exercise. [00:07:09] You know, most people probably have a list of things that they think they want. They go to the store and shop, and you've added this layer that I think is pretty interesting because you're almost telling everyone to start with what you want to have. And then kind of work into or at least, allow through the interface, the grocer kind of provide what you need to do that and then get an order done [00:07:27] Katie Hotze: That's the beauty of digital. You just automate it. And so I think that's what annoyed me the most. I truly like funny story. I was that mom on the playground and my friends would bring me recipes printed out. Spent my whole career in digital. And they go here, here are the burritos we make and here's the da ta ta. I'm like, don't tell him. This to me, I don't have [00:07:48] Ricardo Belmar: You can do with that paper [00:07:49] Katie Hotze: and do That piece of paper. And so I think just, just the natural you know, design of a piece of tech that explodes to cart that was not new. You know, a couple of years ago, I was, I was, trying to get this off the ground. And I had a, I was trying to get a speaking opportunity at a big conference and I had the head of content called me. He goes, ah, shoppable recipes, nothing new, [00:08:07] And I was like, no, but we do it differently. Cause we're not B-to-C we're B to B. Right? We're complimentary retail application. And, you know, we're, we're like the Starbucks app on your phone. It's got one job. It does it really, really well. Right?[00:08:18] That's us. We're an incredibly narrow tech platform. We've got one job and and we can work with all the different grocers out there. And it's a very simple process. We can spin it if we're on their e-commerce, if we have the integration written already, it's literally hours to stand them up [00:08:31] If not, it's a couple of weeks, so it's a really interesting model, but it's it's very serving for our end consumer, like per your example,[00:08:39] you know, it exists with reason because there's a 70 to 84% cart abandonment rate with grocery websites. People go there. They're looking at COVID shot links, bakery links, order your flowers for Valentine's day. I mean the front page of a grocer's website is just cluttered. But people are coming with a very specific purpose. [00:08:57] When you're buying ingredients at the grocery store, you're going to mix them together. You're going to make something with[00:09:01] Ricardo Belmar: that's right, y Yeah, [00:09:02] Katie Hotze: right. And I think a lot of times it takes the person who owns that responsibility in the household, which tends to be north of 90%, a woman who also, you know, our data's agnostic. If you work, if you stay at home you need to have a solution. And so when we built it, we built it with that busy parent in mind [00:09:18] Ricardo Belmar: I think that makes so much sense and it really adds this almost experiential layer to grocery shopping. I almost feel like it makes it a lot more interesting now as the shopper, because you've got that end goal already in mind. And the technology is helping hand that to you. [00:09:34] Katie Hotze: Yeah, totally. And you know, the thing about machine learning is when, when you build a content deployment tool of any sort and you fuel it with ML, [00:09:43] You're allowing the code to be written from the moment of first to use and it constantly gets better. And I think that's, what's really cool about the way that we personalize the recipes. Every time you go in and you look at fresh recipe content, that's an imperative. That that is the secret sauce of making sure that you pull people back over and over again. No one wants to see your stagnant recipe content. There's 300 recipes that you've had living on your website since 1995. No one wants to see them. [00:10:11] And people go, oh, Katie, you know, we have recipes, no one clicks on them. Yes. I know because recipe content is deployed every second. On Pinterest, Instagram, Facebook, [00:10:20] Ricardo Belmar: it gets old quickly.. [00:10:21] Katie Hotze: Yes. Yes. I mean, you can't compete with that. Grocers can't compete with that. We have large retailers tell us, like, you mean, we can just hand this to you. We don't have to deal with the recipes and you just do it all. Yes. That's what we do. That's all we do. [00:10:34] And so it's it's a, it's an interesting model where it's it's I didn't realize it was a burden. In the industry. I think the grocers, particularly the grocers north of like 70 a hundred stores. They're the ones that are, they're just working through bloggers constantly and they are, tethered to that blogger, if it is July 4th and they've got to get the July 4th recipes out the door, I'm telling you that blogger might pop that content back to them at two o'clock and the newsletter hits out at four o'clock and it's just impossible. Right? [00:10:57] But when you have access to us, you have access to all of our recipe content. You can do a 365 day omni-channel contact calendar and deploy it all out there. So it's just, it's just an interesting convenience that there's a lot of benefits we didn't see, we came in to solve a problem for the shopper. [00:11:14] You know, and it's in the, I truly, I told everyone from day one, like the rest will come. Yeah. Trust. Yeah. Right, right. We'll never charge that shopper. We will always be free. Period. I can't tell you how many times I've been challenged on this.[00:11:26] Ricardo Belmar: Really? [00:11:26] Katie Hotze: Oh, I am the mom. I'm 43.. I've had a 25 year career already almost. And , it's really important that it stays free. You don't put up paywalls. It's really important that you know what is most important to your shopper. our shopper's between 25 and 50 years old and has at least one child in the home. [00:11:44] Speed is her number one. Priority. That blows people's minds and I'm like, oh no, she's looking for healthy, healthy diets. Yes, she is. But that is about rank three or four on the list. Speed is number one. And so you have to figure out what's most important. You have to answer to that. And so, and I think that's where user feedback comes in and just Just just the essence of continuing to evolve through the feedback from our super-users is really, I think how we have gotten to where we are today. And I do think that it's different than grocers who are trying to build in house. And there's a lot behind the curtain. [00:12:15] Ricardo Belmar: Right. And you've seen from what I read in one article about one of your customers it seems that you actually know from the data. You know when that customer is coming back and you can compare versus someone that's not using the recipe tools. How do they, how do their basket size compare? What's their shopping frequency and you can see the difference. [00:12:35] Katie Hotze: We follow everything. Yep. And it's quite simple to follow. But yeah, we, we, isolate a retailer. [00:12:40] Segment the data. Make sure you're looking at just accurate local data, right. And they've either accessed our platform or they haven't and you just map those two fields together. That gives you the chance to realize that our shoppers, when they play with our recipes they returned to the grocery site four times more often than a shopper who does not. [00:12:59] Ricardo Belmar: Wow! Four times more often. [00:13:00] Katie Hotze: They've never visited our platform before. Yep. They our, our shoppers have a four X increase. Compared to them. Yeah. And I mean, think about like today I have six grocery stores I can drive to in any given moment. [00:13:12] Ricardo Belmar: Right. [00:13:12] Katie Hotze: Loyalty is everything Especially in post pandemic world. You mentioned online ordering. I just get a chill down my spine if I have to walk in the grocery store. [00:13:21] Ricardo Belmar: I do too [00:13:23] Katie Hotze: such a brat. [00:13:25] I mean it's, it's. It's really been disturbing lately. I literally pull up in front of the grocery store and go, no, no, no, no, no. I'm going to go home and do this on my sofa. [00:13:32] Ricardo Belmar: Right? [00:13:32] Katie Hotze: And so, and you know, online ordering in the United States year over year in July, increased 17. Percent. [00:13:41] Ricardo Belmar: Yeah. [00:13:42] Katie Hotze: I, a year ago, I sat at the table. [00:13:45] I mean, I've been trying to close deals this whole time. And I sat at the table with retailers and I would have someone look across the table at me and say, Online, grocery shopping is going to contract. A lot of these, But the shopper's going right back in the store. Katie they're going right back in the store. [00:13:58] And when you challenge that, it's like, you know, there, there were people smart enough to sign on with us and light it up. And there are people that have waited and we've closed some of those contracts now that, you know, a year ago, they, they, their theory was bust. You know, I mean, online grocery shopping is exploded. [00:14:13] Ricardo Belmar: Right. Yeah, I agree.. [00:14:14] Katie Hotze: People don't want to go to the store anymore. I don't have 45 minutes to go walk the store. [00:14:17] Ricardo Belmar: Yeah,[00:14:17] Katie Hotze: you know. [00:14:17] Ricardo Belmar: And I think for a lot of people, it's not that you may never go back in. It's just that the frequency of what you're going to do that is going to be so much lower than before, because you want to take advantage of the convenience factor, but you still want to get the same outcome. [00:14:29] And I think that's, what's fascinating with what you're doing is you're able to deliver something more than what the customer could get before with that online experience, without having to go into the store. [00:14:37] Katie Hotze: Yes, because you used the word discovery earlier and that's what I always associate that word with Costco, just, you know, [00:14:42] Ricardo Belmar: Yeah, [00:14:43] Katie Hotze: that's the essence of what they want you to do is go in there and find something new. And the cool thing about recipes is that it's a bundle, but it's also an impulse buy, right? So when you hit that button and explode to cart, There, there is a computation taking place and the statistical likelihood that you're going to accept that and check out it's very, very high. And so what, what just landed in your cart? [00:15:05] Some shoppers care, some shoppers don't. [00:15:07] Ricardo Belmar: Right [00:15:07] Katie Hotze: listen, if you, if you fit into our target persona, you do not care what brand those diced tomatoes are. Just put them in the cart. That's why we fill primarily with private label. It's very important as part of our algorithm [00:15:16] Ricardo Belmar: which has a margin impact for the grocer [00:15:18] Katie Hotze: Yes, but it also keeps the recipes nice and inexpensive for the shopper. [00:15:22] Again, we're always shopper first. Everything that we do, we have to reverse. It's guys go behind the curtain figure out how it's going to work. You know, from a revenue standpoint, but it is imperative that the shopper wins and low price wins every time getting. Getting the acceptance of the recipes as they moved to cart. [00:15:39] Ricardo Belmar: Well, this, this is really been fantastic. And just fascinating talking with you, Katie. I know we're going to be seeing and hearing a lot more about Grocery Shopii. W with the kind of trends that I expect to see here this week at grocery shop. For a listeners, if they want to get in touch with you, learn more about Grocery Shopii, what's the best way for them to reach out to you. [00:15:56] Katie Hotze: Sure me personally, my LinkedIn is always open. I check my DMS every day, So Katie H hosts. On LinkedIn. For the company, groceryshopii.com it's grocery shop ii.com. We have a contacts page, when you fill out that contact form. It tends depending on what your category is, comes straight to me. And so we love hearing from people we love being able to follow up whether it's clients, partnerships, etc. [00:16:20] Ricardo Belmar: Perfect. [00:16:21] Well, thanks again for joining me, Katie. It's been a real pleasure. [00:16:24] Katie Hotze: Thank you. I appreciate this I enjoyed this[00:16:26][00:16:26] Stewart Samuel Interview[00:16:26] Ricardo Belmar: Welcome to the retail razor show special edition episode at grocery shop 2022. I'm here at the show in Las Vegas, continuing our series of amazing retail transformers. To talk all things, grocery and consumer goods. And today I'm here with Stuart Samuel global insight leader for IGD. Stewart, we've known each other for a while now. And we seem to often run into each other at these conferences all the time. [00:16:59] So I'm just thrilled to have you on the show today [00:17:00] Stewart Samuel: Yeah, Hi Ricardo, it's great to be here and I'm real excited to share some thoughts with you today. [00:17:05] Ricardo Belmar: Well, let's start by having you give us some about your background and what you do at IGD. [00:17:09] Stewart Samuel: Yeah, so I've been at IGD quite a long time actually, last 17 years. probably the, last 12, 13 years. Tracking develops in the U S market, and more recently. Leading our global insights. Teams are looking at trends innovations. What does the future of commerce look like? What does the store of the future look like, over the next three to five years and then extending that work up maybe over the next five to 10 years as well. [00:17:31] Ricardo Belmar: so you are really in a pretty unique position, I'd say in your role to see firsthand, what the impact is of all the latest trends and across grocery, CPG. W what have you seen? We're about half way through this week's grocery shop. What are you seeing so far? What what are you most excited about? What are you hearing?[00:17:50] Stewart Samuel: Yeah, It's been interesting over the last sort of day and a half the amount of times that retail media has been discussed Definitely. I see you sort of nodding away though. It's been a hot topic and. I think I was in the session with seven 11, earlier this morning. [00:18:03] They talked with their new platform. That's coming out, I love with the fact that they're calling it Gulp Which is kind of. [00:18:07] Ricardo Belmar: That's great. That's great![00:18:09][00:18:09] Stewart Samuel: It's definitely a hot topic and it's one we've been watching. A little bit as well and, ah, I think it's going to be interesting You know, we work with the retailers and manufacturers and. When you're seeing so many of these sort of retail platforms being launched, I think what's going to be interesting from a manufacturer point of view is how do you prioritize? How do you invest. [00:18:29] How do you benchmark these different platforms because suddenly, you know, there's probably, you know, 15 to 20 of these up and running in the us right now. How delicate resources. [00:18:37] Ricardo Belmar: Right, right. [00:18:39] Stewart Samuel: Where to focus in on, so, yeah, that's definitely been up in a hot topic. That I've had a lot of both personalization that the P word has come back![00:18:45] Ricardo Belmar: Of course it's back. Yeah [00:18:46] Stewart Samuel: it had disappeared for a while. Right. And you know, as I think, you know, it's, it's kind of linked a little bit to retail media. Do you have the ability to really deliver that personalization at scale? Within the digital environment. I don't think, I think we're a long way away from maybe get the true personalization, but it's more about contextual and relevant experiences [00:19:05] online. Omnichannel. It's still growing strong and I think sort of what we've seen over the last couple of years is coming to life at this conference that most retailers now accept that Omni channel is the best way forward, it's where the most profitable customers. Kind of set for the retailers saw yeah. A lot of focus [00:19:22] Those three areas. In particular. [00:19:23] Ricardo Belmar: Yeah. Lots to cover there. I'm going to go back to the first one on retail media only because we've talked about retail media quite a bit on our show. It was one of our big, big bets or big predictions for the year that it was just going to be one of the great hot topics. And I think one of the things that struck me here at grocery shop. As you know, as soon as you come in, if you judge just by all of the branded advertising, you see all over the hall, you would think that everything about the show is retailers who want to sell retail media to brands just from all the signage that I see everywhere. [00:19:52] Stewart Samuel: Yeah. And there's definitely a strong presence, you know,. [00:19:54] I think that the leaders. Walmart, Amazon, eBay, their in fourth,. They have some great standards. They have a strong presence and a really sort of pushing their, you know, digital platforms. What I think it was also interesting from those organizations just kind of maybe a little off topic, little bit. Actually here to sell their tech. As well I've seen it, in the Walmart Commerce Lounge and its stand. You know, Amazon has just walk out group here as well. So these retailers are really sort of expanding their reach in that sort of digital and technical world into other retail organizations as well. Yeah, but coming back to regional media, yeah. It's going to be you know, for all the retailers, they're seeing it as a, as an answer to the e-commerce profitability. I mean how can we make , money from a, from all this delivery and pick up activity we're doing in our stores, and y ou know, I think suddenly the light bulb was going off with a lot of companies to say, Hey, We know this is a really high margin product here that we can make a lot of money out of. And it can sort of offset some of those additional costs. Actually it can also help ecommerce business as well, because you can drive them scalable volume. [00:20:52] Ricardo Belmar: Right. [00:20:52] Stewart Samuel: through their channel for the retailers, but yeah, it's definitely a interesting topic.[00:20:57] Ricardo Belmar: And it really seems to me to be a natural fit for grocery. [00:21:01] Stewart Samuel: Yeah, I think so. Just because the number of touch points that, you know, people have every day. So, you know, people are typically, you know, interacting with food 20 to 25 times a week. [00:21:10] And we know that people aren't just ordering once a week anymore for grocery deliveries. And even when they are doing a one, one last grocery delivery, they're actually building an order three or four times at different points during the week on their devices. So. There's eyeballs online so many times that I think for the CPG partners, it's just a great opportunity to get their brands. In front of consumers and, I guess [00:21:30] what's made a true test is, how relevant those ads can be, but to your point, for grocery retail specifically. You know, those with the loyalty programs that the leaders have a closed loop, the measurement right. And really sort of, show the ROI to the advertisers is such a strength, but maybe it doesn't exist in other channels yet as well. [00:21:48] Ricardo Belmar: and do you see. With the grocers particular retail media networks. It seems to me there's a better opportunity perhaps than in other retail segments to have that closed loop data capability either because of the loyalty programs. Or just different ways that grocers have to collect data about their customers over the lifetime, because they have such a regular recurring relationship with the customers or maybe other retail segments, it's much more sporadic in their interaction with customers. It seems like the, the opportunity to deliver on that ROI to your point, back to the brand should be better in a, in a grocery retail media network. [00:22:22] Stewart Samuel: Yeah, I think that in terms of vertical grocery is probably better positioned than others yeah, just The frequency of interaction. Just the amount of data that the readers already have on their consumers and then the ability to. Align that with the, ads their serving up so you know, you can sort of show an ad to the consumer. [00:22:37] And provide that consumer is locked in on the system you know, the changes and cookies and things, part of a loyalty program They can then say to the advertiser, Hey, we showed this person this ad and this is what that person then went on to do, either in store or online. That's really powerful. And particularly with the limitations that's going to come with I think that we, that even means recession. In a better position and yeah, they can really make the case that, you know, Advertiser that's better than going to a third party platform. [00:23:04] Ricardo Belmar: Have you seen in, in the discussions here this week on retail media? Connecting the dots, so to speak between the focus on the e-commerce side of the business, but also bringing that retail media network in store. [00:23:15] Stewart Samuel: Not yet. But it's definitely something that we've seen happen in store. So. Amazon's a bit of an example with their Amazon Fresh stores and so in those stores. There's a lot of digital screens. Up in those stores and also so for other retailers like Walmart who might bring TV sort of channels in the stores. For a long time, there's a lot more they can do in store. As well, it doesn't have to be just digital stuff in store. It can be something as as like floor stickers, [00:23:36] Ricardo Belmar: right yeah [00:23:37] Stewart Samuel: could have bigger events. In-store as well. I think over time. I think that will nuance and change and right now the big focus is on selling of those digital But I think there'll be an opportunity to expand that off into the physical store as well [00:23:49] Ricardo Belmar: Yeah, I think it just, it just makes sense. Do you see a tie in with things like electronic shelf labels? [00:23:55] Stewart Samuel: Yeah, you. Kroger's tried that before. They have this stuff where depending, how far away you were from the shelf, right. That the ad would change. The big picture message from far away and the closer you got to the shelf [00:24:06] Ricardo Belmar: More narrow, more specific. [00:24:07] Stewart Samuel: And give you a more contextual message. So I think there is opportunity that there is a, I think a. Yeah, significant costs with that type of setup of as well. [00:24:17] Across the whole store. We have seen some some tests with. With a promotional ends being digitized only in certain categories, having digital boards above, Asda. in the UK has done some of that. So yeah, I think all the time, but until, Digitizing the whole sort of store on shelf strips. [00:24:34] it's just a cost internally [00:24:36] Ricardo Belmar: yeah, that, that can kind of make sense. I think on the cost implication. Especially, if you think about it, we're talking about large physical spaces, a lot, a lot of ground to cover with that. But I think maybe at the same time, this kind of goes to your second trend about the personalization is back. Right. And we're talking more again about how to personalize. I heard at least one, maybe two different brands talk about earlier today. Just how personalization is just table stakes. You have to be doing this now. And it made me think and, I think we've heard that before, too in, in past events like this, but there, there seems to be a different kind of context to it. And maybe it's because of the retail media networks where you want, you obviously want to leverage that personalization, but maybe there's something else happening. [00:25:15] I think that's causing this to be more important than we used to talk about it. [00:25:19] Stewart Samuel: Yeah, I'd agree. It's kind of a sort of you know, pre pandemic has been talked about quite a bit and then the pndemic came, and it was like, Well, let's just sell everything [00:25:26] Ricardo Belmar: I've got other priorities. [00:25:28] Stewart Samuel: kind of sort of just drop off the radar, so I agree. retail media is one aspect, which is enabling more contextual ads to be served up. This is a form of personalization. I think the other thing as well is changing intentions to go in with consumers on mobile devices. As well, I think. Sort of it's much easier to deliver that personalized experience to a mobile device. We also assume this has been more and more time on those mobile devices. [00:25:52] Ricardo Belmar: Yeah, I agree that that makes sense. So, and again, that sort of ties into the third trend that you highlighted, which, you know, for most of us would say, well, it's not a new trend, but it's kind of back again in this space and that's be more omni-channel. [00:26:04] Stewart Samuel: Yeah, it's definitely, not a new trend, right [00:26:07] yeah, it seems to be that Just the, you know, all those other elements coming together, retail media, personalization. [00:26:13] I think Retail is also, you know, the, the cost challenge we've had with e-commerce. The work they put in over the last few years to add more capacity. We've seen a bit of leveling off of growth. In e-commerce this year. All those factors coming together, that leaders are now really sort of. Refining and fine tuning really [00:26:31] For online orders. And returns. I was at a new target store in New York last week. And they have a whole pack of checkups. And registered for selling stuff. And then the whole of You know, and that's just for collecting online orders. So, retailers are thinking about their spaces. I think sort of a pre pandemic and during the pandemic there wasn't like a ton of thought into sort of how much space is needed for this stuff. How are we going to set up? Set up the customer service aspect. There's more capacity in the market. There's more competition. The retailers are really sort of wanting in that service elements so you know, when a customer comes to the store. How quickly can we say to that customer, by having that sort of stage and space set up, be close the store entrance, having a team with them. I think that's where retailers are now focusing on being omni-channel [00:27:14] the systems are set up, the processes are set up right. the tech is there, the infrastructure is there.[00:27:19] Ricardo Belmar: That makes sense. , finding the right ways to optimize, to start making all of these things more profitable And more consistent, I would say probably for that customer experience. [00:27:27] Stewart Samuel: Yeah, I agree. And I think a lot of retailers have scaled up a lot during the pandemic. And whilst, you know, maybe to both slow this year, The penetration for most retailers is significantly above where it was pre pandemic. So that's a big part of that business. It's a big potential, you know, challenging. [00:27:40] For the business that we needed to get it right and fine tuning. Looking at different form of models. As it gets to scale, do we need a dark store or do we [00:27:47] microfulfillment doing it, something away from the store so all the things that sort of. Well, I see it being looked at in a lot of detail. , [00:27:54] Ricardo Belmar: one of the things that I guess strikes me with that is. Maybe I'd describe it as. I'll put it. I know I heard this in a couple of sessions today where there's the ongoing debate of, you know, which of these You know, trends during pandemic are lasting. Today and beyond, you know, we saw that the large increases in online and e-commerce for grocery and then there's been sort of a leveling off, and I've heard a couple of different viewpoints in, in sessions today on people expressing their thoughts as to what's that level going to now level off and stay at that rate. Or are we just going to see a slow down in the increasing. Rate year over year of this, but it's still always going to be a significant enough proportion to the channel mix that, you know, we need to find ways to, to be better at Omni channel. [00:28:36] Stewart Samuel: Yeah, definitely. The data we have at IGD shows that incremental growth. To come. Definitely growth is slowing this year. Probably for a lot of companies, it will be pretty flat. This year compared to last year. [00:28:47] But going forward. I've seen since, you know, good, healthy growth, including here. In the us and a again, A lot of us here have tried e-comm for the first time during the pandemic. [00:28:56] Ricardo Belmar: Right. [00:28:56] Stewart Samuel: A lot of us have converted. To being regular customers. There's also more capacity coming on stream. So more opportunities. [00:29:01] For, you know, Shoppers to order I'm also I was just in the door dash session seeing sort of there's more in a more missions being served. So going more for the convenience.[00:29:11] Ricardo Belmar: mm-hmm, right. [00:29:11] Stewart Samuel: Which, are actually enabling large grocers. To do that. So people like Albertsons in us, Loblaw in Canada. We don't have convenience format stores. But now through that partnership with Dash mart, it's actually served that[00:29:22] Ricardo Belmar: that convenience customer. [00:29:24] Stewart Samuel: Yeah. That's bringing up a different type of offer. Yeah. Some of the stuff we're seeing on experimentation around live streaming. That social commerce, TV commerce, right. This kind of idea of, yeah, always on shopping, right. Yeah. lots of new pilots and tests being announced this week [00:29:39] And we'll just underpin that growth. [00:29:42] Ricardo Belmar: yeah, what do you see happening from your perspective on grocery with livestreaming. I mean you know Walmart made a big announcement this week with firework. Right. And, and teaming up on live streaming. And I find that's an interesting topic. I generally, for retail, I'm a big proponent of live streaming taking off, maybe not in the same way that it did in China and throughout Asia, a little differently here. [00:30:02] But I'm curious what you think that the, the angle is in the grocery segment for live streaming. [00:30:07] Stewart Samuel: Yeah. I'm a big fan actually of Fila. I think they're doing some great stuff from the, some of the pilots with Albertson's and the announcement with Walmart. I think there's a huge opportunity to food retailers to keep people in their own ecosystems, if you like. So rather than going to maybe Tik TOK for a recipe inspiration. Actually can we, can we have that kind of content on our platform, actually, can we set it up in a way that is easily generated content. Right. [00:30:32] Ricardo Belmar: Right. Okay. Yeah. [00:30:34] Stewart Samuel: You know that CPG coming through just, you know,. Some branded content. I think that what I expect to see is that more of an user generated content sitting on retailer's site. [00:30:43] Yeah. I'm with you. I think livestreaming is an opportunity in this market. I think it's a slow burn though. I think it will be different to what happened how it evolved in Asia but I think that there is no to that just because I think the appetite for that kind of. [00:30:59] You know, real time video based content is huge. And it's growing with us in your consumers. So I think over time, there's just an expectation that they can sort of tap into that type of content, and actually experience that on the retailer's platform [00:31:12] Ricardo Belmar: Yeah. Then kind of keep, owning that relationship versus giving up that relationship to a social media platform. [00:31:16] Stewart Samuel: Exactly. Yeah. But it is interesting. They, they are making their products available through those different platforms. As well as us. It's kind of like covering all bases. [00:31:25] Ricardo Belmar: I guess it sort of plays into their whole omni-channel plan, right. Is to be everywhere in a sense. [00:31:31] I know there was a session earlier I was in the president of Campbell snacks, gave example of a campaign they did on Tik TOK that generated 10 billion views. On just [00:31:40] Stewart Samuel: they were like three days, [00:31:41] Ricardo Belmar: right. Over three days. And just how many goldfish can you hold in your hand? Yeah, it was amazing [00:31:46] Stewart Samuel: Yeah, it was amazing, but yeah, we know that a particularly on tiktok. There is opportunities to go viral. [00:31:53] Typically, I think when their. Imaginative when their, around some of those. Yeah. I wouldn't say nostalgia brands, but those well-known brands and Cielo the Oreo campaigns right [00:32:04] I think so. I think it's been really interesting actually to see a lot of traditional brands. Tap into those new mediums. Quite a big week for some of you they expected, maybe it would be some of the newer challenges, startup grounds that would be sort of occupying that space for that. We've seen it from people like Kraft-Heinz right from Mondelez. [00:32:21] Ricardo Belmar: All the traditional brands, [00:32:22] Stewart Samuel: all the traditional brands [00:32:24] they'll look the job in that space. [00:32:25] Ricardo Belmar: Yeah. Yeah, definitely. Definitely. So it's the last thing. I want to ask you, , is there anything that strikes you. Is interesting. That's not being talked about so far this week. [00:32:35] Stewart Samuel: Yeah. Tell me what I haven't heard a lot about is two things. We, we're still very much focused on his health and sustainability. [00:32:40] It's interesting because when I was. Before sustainability was the biggest shield and it was on the agenda. Quite a bit. You know, there's a big sort discussion point right now, whether, does the cost of living crisis sort of , pull back on some of the stability, focus that a lot of shoppers have or do they continue to sort of pursue it and support all those things. So I haven't seen a lot In this event. Certainly sort of it's one we're watching to see just, what happens with a lot of those efforts? Cause let's super interesting right now, is that a lot of the milestones, The shorter term. Focused on 2025. [00:33:12] And 2030. So 20 25 is like less than. So less than a thousand days, right? So. There's a lot of packaging initiatives, a lot of proof points retailers have made. that and we know most retailers tell us net-zero over 24. Yeah, a little bit longer up actually between 2025 and 2030. That's cool of deliverables. If you begin to release those ESG reports. [00:33:32] I think we will see more coming through and it will seem like activity. In that space, just haven't heard a lot of it. If you had today and then then health is another one. Sort of. We know. Thinking longer term shift. In the industry. But again, it's not been much on the agenda here [00:33:46] Ricardo Belmar: Right. Yeah, no, I agree up. [00:33:47] I've been kind of surprised that we don't see more agenda items on, on those topics here this week Well, Stuart, this has been a fantastic discussion. I'm so glad you could take the time to join me today. If listeners want to get in touch with you. Follow your work at IGD. Learn more about you know, the great data insights you guys have. What's the best way for them to reach out to you [00:34:08] Stewart Samuel: With me on LinkedIn. Yeah, you'll probably see some store photos now and again. Again, almost every day. Either on LinkedIn or my email just samuel@igd.com and yeah have a talk about the work we do at IGD.[00:34:19] Ricardo Belmar: All right. Great. Well, thanks again Stewart for joining me today. [00:34:22] Stewart Samuel: Yeah, thanks Ricardo! [00:34:23] Show Close[00:34:23] 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 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. [00:34:57] 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.[00:35:14] Casey Golden: Thanks for joining us.[00:35:15] 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. 

It’s Season 2, Episode 2 of The Retail Razor Show and we’re tackling one of the biggest trends you need to understand in retail today – Retail Media Networks!Our Retail Avengers team has been eagerly anticipating this topic and recently held the discussion in our Clubhouse room, to uncover the truth about retail media networks and why retailers should (or should not) care about them. Is it about top line revenue? Margin? First-party customer data? Or all of the above? To help cut through the clutter we invited the industry’s leading analyst and expert on the topic – Andrew Lipsman, principal analyst for retail & ecommerce at Insider Intelligence, to give us the scoop!Your hosts, Ricardo and Casey, are then joined by Andrew one more time to dig into what’s happened since the Clubhouse recording and consider the reality retailers and brands should think about when evaluating retail media networks. This episode is tailor-made for retailers, brands, marketing and advertising agencies – there’s something for everyone, and you’ll want to take notes during this one!News update! We’re sitting at #21 on the Feedspot Top 60 Best Retail podcasts list, so please keep those 5-star reviews in Apple Podcasts coming! With your loyal help, we’ll move our way up the Top 20 in no time! Leave us a review and we’ll mention you in a future episode! 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 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. 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, including E-Motive, and Overclocked, from the album Beat Hype, written by Hestron Mimms, published by Imuno.The Retail Razor ShowFollow us on Twitter: https://bit.ly/TwRRazorConnect with us on LinkedIn: https://bit.ly/LI-RRazorSubscribe on YouTube: https://bit.ly/RRShowYouTubeSubscribe on Apple Podcasts: https://bit.ly/RetailRazorShowRetail Razor Show Episode Page: https://bit.ly/RRShowPodHost → Ricardo Belmar,Follow on Twitter - https://bit.ly/twRBelmarConnect on LinkedIn - https://bit.ly/LIRBelmarRead my comments on RetailWire - https://bit.ly/RWRBelmarCo-host → Casey Golden,Follow on Twitter - https://bit.ly/twCaseyConnect on LinkedIn - https://bit.ly/LICaseyRead my comments on RetailWire - https://bit.ly/RWCaseyTRANSCRIPTS2E2 The Retail Avengers & The Power of Retail Media Networks[00:00:00] Pre-Show Intro[00:00:00] Casey Golden: So Ricardo, there are two kinds of people in this business, those that love and depend on ads and those that can't stand it and strategize to avoid it. Which one are you?[00:00:11] Ricardo Belmar: I admitted I am of two minds here on the one. The marketer in me loves talking about advertising when it comes to creating messaging and finding the right mediums or reach your audience. But then on the other hand, I'm also a consumer and I can't help, but consider advertising to be just like what professor Scott Galloway puts it attacks on the poor, who can't buy their way out of it.[00:00:31] Casey Golden: Okay. That's like cheating. You have to pick one. You can't be in both camps.[00:00:36] Ricardo Belmar: Why not? You know, the world of commerce is very gray. It's not black and white.[00:00:39] Casey Golden: Hm, you have to pick one. I will die on my sword. You have to pick it's either one or the other. You can't be on both teams. [00:00:47] Ricardo Belmar: But what? So now there are teams?[00:00:48] Casey Golden: There's always teams There are only two kinds of people and you went and created a third person.[00:00:55] Ricardo Belmar: I I'm just expressing thoughts on this topic. I didn't realize I was choosing which team I'm on or creating an entirely new person. I mean, I don't know what kind of podcast starts the show by creating new kinds of people and putting everyone into one bucket or another.[00:01:08] Casey Golden: Who said anything about buckets?[00:01:10] Ricardo Belmar: Okay. Fine. Not, not buckets. How about different brands of vodka?[00:01:12] Casey Golden: different brands of vodka have nothing to do with this. [00:01:16] Ricardo Belmar: It's a metaphor. [00:01:17] Casey Golden: are you sure? I have a feeling you're just making us run out of time to intro your topic.[00:01:22] Ricardo Belmar: Well, you brought up advertising and then we branched off into buckets.[00:01:26] Casey Golden: No really buckets of vodka have nothing to do with this week's show with all this talk of buckets. We're not going to have time to talk about retail me....[00:01:36][00:01:36] Show Intro[00:01:56] Introduction[00:01:56] Ricardo Belmar: Hello, and welcome to season two, episode two of the Retail Razor Show. I'm your host Ricardo Belmar.[00:02:02] Casey Golden: And I'm your co-host Casey Golden. Welcome. Retail Razor Show listeners to our unapologetically, authentic retail podcast for product junkies, commerce technologists, and everybody else in retail and tech alike.[00:02:14] Ricardo Belmar: So Casey, here we are second episode of the new season coming right off our strong opening with the Metaverse, which by the way is quickly becoming a very popular episode.[00:02:23] Casey Golden: It's an important topic. I'm not so sure it's popular. I mean, there's so much hype out there about the metaverse. If there was one topic that needed someone to cut through the clutter. This is it. [00:02:33] Ricardo Belmar: Yeah, no doubt about it. Well, if that's the number one, I have to say this week's topic is pretty darn close if not tied right up there with the metaverse plus it's one of my favorites.[00:02:42] Casey Golden: That can only mean one thing. This must be the week we're covering retail media networks. [00:02:47] Ricardo Belmar: You got it! Yes. This week is all about retail media networks. One of our top 10 predictions for 2022 back in season one, episode four. And it's another hot topic that our Retail Avengers crew had been anxiously waiting to cover for so long. And we go pretty deep on this one.[00:03:03] Casey Golden: That's right. But when we cover a topic, we really, really cover a topic. We bring in the big shots to dive in, bring it home. We had an awesome special guest that joined us on clubhouse for this topic.[00:03:18] Ricardo Belmar: And when you want a big shot to step in and talk, retail media networks, who ya gonna call?[00:03:21] Casey Golden: I'm guessing it's not Ghostbusters, but yeah, I see what you did there. Um, you're really gonna try to get this back into referencing eighties, pop culture.[00:03:31] Ricardo Belmar: I am all in for that challenge. Indeed but, but no, of course it's not the Ghostbusters it's even better. We brought in none other than Andrew Lipsman, principle analyst covering retail, and e-commerce at e-marketer insider intelligence.[00:03:44] Casey Golden: Andrew has done so much research and forecasting into retail media networks. This was such a good session on clubhouse. We of course, had to bring Andrew back to talk with us again for an update. So after we listen to clubhouse, which was recorded a few months ago, we'll come back and chat with Andrew to see what the latest happenings are in the world of retail media[00:04:06] Ricardo Belmar: It'll definitely be worth the wait. So with that said, since this is a topic that needs no further introduction, let's dive right in and listen to the Retail Avengers and the Rise of Retail Media Networks. [00:04:23] Clubhouse Session[00:04:23] Ricardo Belmar: And welcome everybody. Welcome back to the retail razor room. We've got a great topic today. The room title says the Retail Avengers and the Rise of Retail Media Networks, which is absolutely one of my favorite topics lately.[00:04:35] And as anyone who's following along in our podcast knows it was one of our top 10 predictions for 2022. I'm thrilled to have someone I consider an expert in retail media networks, Andrew Lipsman, and Andrew. I'll let you introduce yourself in just a moment. For those of you who might be new to our rooms, I'm gonna let each member here of the team introduce themselves quickly. And Casey, why don't we start with you? [00:04:58] Casey Golden: Hi, I'm Casey golden. I'm the founder of Luxlock, a retail experience platform.[00:05:04] And I have spent my career on the fashion and supply chain tech side of the business building Franken stacks, and now I'm slay ' em [00:05:12] Ricardo Belmar: fantastic. And Jeff, [00:05:14] Jeff Roster: hi Jeff Roster, former Gartner and IHL retail sector analyst. Now serving on several boards, including the Center for Retail Transformation at George Mason University and the host and producer of This Week in Innovation[00:05:27] Ricardo Belmar: All right. Great. Thanks, Jeff. And Brandon. [00:05:29] Brandon Rael: Good afternoon everyone, Brandon Rael in the New York area. I've been in around the retail industry, my whole career, and lately I've worked abroad with fortune 100 companies to drive business and innovation transformations and really to adjust their operating models to the current consumer and digital trends and behaviors.[00:05:48] Happy to have to be back on this platform. [00:05:50] Ricardo Belmar: Thanks Brandon. And Andrew to introduce yourself as well to the audience here. [00:05:54] Andrew Lipsman: Thanks Ricardo. So I'm Andrew Lipman, the principal analyst covering retail and e-commerce at e-marketer. So retail and e-commerce is a, is a pretty wide purview, but I'd have to say in the past year or so 70% of my time has gone pretty exclusively to retail media. It's just become such a hot topic. I do have a background in digital advertising as well. So the fact that commerce and advertising have intersected so nicely in the form of retail media has just become a, a coverage sweet spot. So I have leaned into it.[00:06:25] I I've been a part of the forecast that we've done at e-marketer to help round out the picture of the space. But I, I often say that I, I think, you know, we're just getting started. I mean, we're really in the second or third inning of what I think is just one of the biggest trends that we will see in digital advertising and commerce.[00:06:41] So I'm excited about where we are and, and also what's next. [00:06:45] Ricardo Belmar: All right. Great. And I, I gotta say, I, I share that enthusiasm for this space. It's also one of my favorite topics and we've been saving this one for the room. So I'm glad to see that we have some loyal fans here that are joining us in the audience.[00:06:59] And so really quickly, I'm Ricardo Belmar. For those of you in the audience that don't know me, I host the retail razor room here and also co-host with Casey golden, the retail razor podcast. So if you're not to subscribe to that, I encourage everyone to check that out. You'll hear some of our favorite past clubhouse sessions there, as well as some other interesting interviews and other topics that we're, we're bringing to that medium. I'm currently lead partner marketing advisor at Microsoft for retail and consumer goods. And let's go ahead and jump into this topic and I'm gonna lean over to you, Andrew, cuz as, as you just kind of nicely put, you were spending so much time on, on retail media networks.[00:07:37] It was one of your, I think top five trends you, you gave for 2022, right at the end of last year as well. Can you kind of set the stage for us? Tell us a little bit about where retail media networks stand currently in terms of, ad spending, what, what are you forecasting as growth for that?[00:07:54] And also give us a definition of what you would call a retail media network. What is it? What is it not. [00:07:59] Defining Retail Media Networks[00:07:59] Andrew Lipsman: Sure. So let's maybe start with the definition. I mean, I think of a retail media network as any sort of an ad network that exists on a retailer's owned and operated assets, which historically really has, has kind of met in store.[00:08:13] More recently it's been on e-commerce sites and apps. But I'd also widen the definition a bit to include any media that is powered by retailer first party data. That's a, a reasonable slice of what we're seeing in retail media ad spend today. It's about 10% of the market. But it's a part of the market that's only gonna grow as you start seeing that first party data kind of connect into all sorts of inventory, whether that's display and video online, increasingly connected TV and then other digital media assets.[00:08:45] So that's kind of how I, I define the space our definition of, of digital retail media ad spend for 2022 in the us showed just under 41 billion in spending growing in about 30, over 30% for the year. This year that's down in terms of growth rate from the previous years were, were upwards of 50% growth.[00:09:05] But it's actually about the same amount of incremental spending coming into this market every year. In fact, if you go from 2020 on it went from about 21 billion to 31 billion to 41 billion, 2023, we're projecting 51 billion and then 61 billion. So it just sort of lands nicely that way, where it's about 10 billion in incremental spend every year to date and then also what we're projecting for the next few years going forward. So that's a big reason why this is such a, a big emerging opportunity. And, and just to put that, those numbers in context, cuz you know, you hear a big multibillion dollar number. You don't just have the context for it.[00:09:42] By the end of that period, when it's 61 billion, that will be about one in every five digital advertising dollars, obviously an enormous very profitable market.[00:09:52] Ricardo Belmar: So that was going to be my next question, when you look at that growth, as you said, it was going to be one in five of every ad spend dollar. If you're a brand, how are you deciding where to put that spend? What's the appeal to be spending your money with these retail media networks. And maybe even before that question, let me make this a two parter question and then I'll turn to some of the other speakers up here for their thoughts, but for the retailer themselves, cuz it does seem like every week we hear of yet another retailer who's launching their new retail media network.[00:10:22] I think Ulta beauty was the most recent that that comes to my mind. What's the appeal for the retailer? Is it really just the incremental revenue and margin from this ad spend that they're getting from brands? Or is it about getting more data? Is it a combination of both? [00:10:36] Andrew Lipsman: So everything that you mentioned is true, but just to get right to the heart of the matter, it's the margin. In most cases, the incremental revenue is, is gonna be pretty modest.[00:10:45] There's not that many retailers that have the potential to grow their top line in a huge way from this. But if you're a retailer who's treading on, you know, modest to thin margins and you, all of a sudden can introduce a new revenue stream that maybe drives 30 or 40% net margins, it changes the whole profit profile for your company.[00:11:06] So that's what everyone's chasing. They've seen what's happened to Amazon. Maybe, the last two quarters, not withstanding, if you pay close attention to Amazon's earnings, you would've noticed that amid the pandemic as their ad revenues really grew. And for a few quarters, I think it was growing 60, 70, 80% year over year.[00:11:23] All of a sudden Amazon was just blowing its profit expectations out of the water by like multiples by two or three times what, what wall street was expecting. So everyone's seeing that and they're paying attention to it and realizing that it can totally transform the bottom line of, of their business.[00:11:38] But the big question is whether they can get there. And as you've said, everyone's a media network today. They've all flooded into the space. And the question is realistically how much incremental revenue and margin can they drive at the end of the day? [00:11:51] Ricardo Belmar: So I, do have a follow up to that, but before I get to it, I want to ask the other analyst on stage, Jeff, what are your thoughts on, everything Andrew just described about where we're at with retail media networks. [00:12:02] Jeff Roster: Well, it's, it's [00:12:03] really such a fascinating area typically. I mean, it's not a, an it spend area, so it's, it's something I haven't really studied and we knew about it. We, you know, the Walmart radio network we've always talked about.[00:12:14] And when I saw Andrew numbers, I I almost had almost fainted. I mean, it's just, you know, incredibly large and growing. So as somebody that understands how retailers operate, I mean, incremental revenue , is, dang good at revenue. And so I can see them clearly trying to not only just continue to expand this, but I think also add some power into their negotiations with, with their brands, people that wanna market with them.[00:12:40] I mean, we've always talked about slotting fees. Now we have, media advertising fees. So somebody that's always championing the innovation. I love seeing it. I love the experimentation. I love the, the growth, the, the exploitation of a new market, new opportunities.[00:12:52] Ricardo Belmar: Thanks. And Brandon one are your thoughts.[00:12:54] Brandon Rael: Yeah, I think it's amazing to see the the vertical integration where the retailers and brands can controlled the experience , and the media and the marketing. So it's they're controlling, what's communicated their customers and what's proprietary to them. So this is another channel, another opportunity, like to where there can be revenue growth and less dependency on third party media companies.[00:13:13] So I think it's a fascinating development [00:13:14] Casey Golden: Yeah, I think that's a really good, point's just really about them managing their own proprietary content and, and that distribution I think it's, it's gonna be interesting to see how the third party ad networks adjust over the next few years. [00:13:28] Jeff Roster: So Andrew, could I ask a question to better understand the numbers?[00:13:32] Andrew Lipsman: Absolutely. [00:13:32] Jeff Roster: So really before Ricardo and Casey started talking about this as a major trend. I mean, I, I knew it and I understood sort of what it was. I just always assumed what we were talking about or just the Walmart radio network, just music and ads playing inside their physical stores. Certainly high value for, for them.[00:13:50] And then all of a sudden, now we're talking about selling ads. Could you maybe just unpack what it means, or an example of where these dollars are coming from who's who's paying and who's receiving those dollars. [00:14:00] Advertising Spend vs Retail Media[00:14:00] Andrew Lipsman: Sure. So let me start by just kind of defining the space. So the, the, the vast majority of the numbers I referenced.[00:14:07] Almost about 75% of it actually is Amazon like sponsored product ads on Amazon. When you search on e-commerce sites, Walmart, eBay, Instacart, all of those players are driving the bulk of the market. The in-store media that you're speaking to is, is frankly a pretty modest sliver piece. That said, I think it's going to be transformative.[00:14:32] I think you're gonna see all sorts of digital media entering the stores. And there's a lot of innovation that's gonna happen in both digital you know, display, video and audio. So it's all of that. Where are the budgets coming from? So it's, I would say, a big thing that spurred the growth of this market in the last two years was the pandemic and obviously the, the boom and e-commerce, and those ad dollars started to follow commerce dollars.[00:14:54] You know, obviously Amazon was a big part of drawing those dollars online. So those dollars largely were incremental budgets. There's a lot of incremental budget during the pandemic as you know, T and E budgets were held back. So there, a lot of that got poured into advertising. Obviously consumer demand came back, so everybody wanted to spend ads into that.[00:15:17] But the big question really is as the market rationalizes, the advertising market rationalize, where do the budgets in the future come from when it's not gonna be so heavily dependent on incremental dollars? There it's, there are a few places. I mean, there's really three. So the first one is other digital ad spend Facebook and Google.[00:15:37] And I would say right now Google's holding up pretty well amid the deprecation of third party, identifiers Facebook, not so much. So you will start to see some budgets shift. Away from Facebook and in the direction of retail media. There's not a ton of overlap though in the specific types of advertisers and the types of advertising today.[00:15:56] So it's not kind of a, a direct line between one and the other. The next big bucket of ad spend that it will pull from his TV. These TV dollars have just been sitting there for years and years. Viewership continues to decline and those dollars don't have anywhere better to go. Now that said those TV dollars still wanna chase TV like inventory, they want video.[00:16:17] So the, the opportunity for retail media is either in store video, or I mentioned connected TV. Like Amazon is, is powering more and more of that. You're gonna see a lot of those TV dollars go into those formats. And the last one that if, if you're coming from, physical retail world is shopper and trade dollars huge, huge budgets starting to shift.[00:16:38] We saw a big pronounced shift from between 2020 and 2021 from those budgets specifically. There's a lot more to come. Now, the interesting aspect of that is that the brands will pull from shopper and trade marketing and put it into retail media. But retailers don't necessarily want that because it's just, you know, taking out one of their pockets and putting it in another.[00:17:00] So the brands in many, in most cases would much prefer that those dollars come from the other buckets that I mentioned, basically Facebook and TV. [00:17:08] Casey Golden: I think it's really interesting the opportunity here we have to essentially hold those retailers accountable for the distribution of the funds. When I was at Ralph, I would negotiate the margin agreements as well as a bucket of ad spend for our brand.[00:17:26] And I would just blindly write a check. I wouldn't get any KPIs back. I wasn't deploying it to a specific medium or. A specific location necessarily. We just had to blindly write a check to say here's a few million dollars for ad spend for you. Great. So I think that it really just empowers a lot of the brands to be able to hold accountability to the retail media networks.[00:17:50] If they're, they're gonna start doing that. I think it's a win-win for both sides. A lot of companies have been doing it without any insights in return. [00:17:58] Ricardo Belmar: And Andrew question for you on, on Casey's point here, I mean, are, are the metrics there? What are you finding brands are, let's say pleased with the kind of reporting they get on the, the performance of their dollars on these retail media networks, or are they struggling to find the ROI and the return on ad spend.[00:18:14] Andrew Lipsman: No, they're, they're really not struggling. I can talk, there is a little bit of friction that I can mention in a moment, but let me talk about the, the bigger picture first here. Casey's point is right. They were spending these dollars anyway but there wasn't accountability. My, my thesis before this, this space exploded a few years ago, I actually wrote my first report on retail media networks in 2019, when this was bar barely a blip on people's radar.[00:18:37] And my thesis was essentially that measurement makes markets, especially digital advertising markets. If you think about digital ad dollars that got pulled online in the early days, it was Google because people could see that closed loop on performance. You put, you know, dollars into Google. You could see that you got a, a dollar 25 out.[00:18:56] Then the social era happened and Facebook built an amazing apparatus of targeting and measurement. And when you just see, and when brands large and small, see that you put dollars in and you get more dollars out. They keep pushing spend in that direction. So it was it's kind of obvious or, or, or that we would see this parallel in retail media because it links so directly to e-commerce and that measurement is gonna move those budgets and, and certainly brands like accountability.[00:19:25] Now I mentioned a, a couple minutes ago that retailers may not necessarily like the fact that if it's just pulling from shopper and trade spend, it's not necessarily a net benefit for them. But in some sense, it is if those dollars are moving from not being accountable to accountable because of how that can unlock incremental dollars.[00:19:44] Right. I, I mean that, that is what's gonna fuel the biggest portion of this growth going forward still. Maybe not quite as much as it did here as, as it's rationalized, but there's still a lot of incremental spend. That's gonna come into digital advertising over the years and it will disproportionately move into retail media for, for exactly those reasons.[00:20:03] As far as the, the friction points, what you hear is that the, the ROAS right, the first metric that everyone looks at return on ad spend for Amazon in particular, it's, it's coming down as ad prices go up. But it's still proving really strong. And if you just cross compare it to other digital advertising channels, it still looks better than, than most of them.[00:20:22] I think the friction that's happening is with so many networks and with Amazon as the default buy starting to see that return on ad spend going down. I think there's a lot more questioning of how do I allocate my budgets within and across different retail media networks. So, so there is some handwringing going on and trying to figure out where is the best place to allocate that next dollar.[00:20:43] But broadly speaking, I think brands feel really good about putting their, their dollars into the bucket of retail media. And they're pretty happy with networks across the board and the metrics that they're getting.[00:20:55] Ricardo Belmar: One thing I wonder a lot about this, is there a opportunity for agencies that manage ad spend for brands as they interact with more and more of these retail media networks to help them with that allocation? Is, is that helping on the agency side or is it more, more of an indifferent kind of change. [00:21:12] Andrew Lipsman: You know, agencies are getting really involved and they have to be because th this is in, in our research and other, other third party research has, has shown similar things. Brands can only manage so many platforms, right? They're already managing a bunch of different digital advertising platforms outside of retail media.[00:21:27] And then now they have to go into new walled gardens and try and understand the idiosyncrasies of each one of those. And most of them are basically saying I can put my dollars in two to three retail media networks, and, and then it gets too hard. I'm spread too thin. So that's where agencies can help them spread it a little bit further into four or five, six different networks. But yeah, I think they need that, that handholding, if they're gonna be able to allocate it most appropriately.[00:21:54] Ricardo Belmar: So, as we mentioned earlier, that we've seen so many additional networks pop up every week. I'm curious if you, are you keeping track of how many of these and I'll use the word official? Maybe there's such a thing as an unofficial retail media network, but are you tracking how many there are to date?[00:22:09] Andrew Lipsman: Loosely. I, I would say if, if you asked me to, to write down as many as I could, I could knock out a fair amount of them. It's it's definitely dozens and dozens. There's, there's probably not really room for all of them. So I, I think the space is getting crowded now, in some sense, there's surprisingly more space than you would imagine because you have kind of the networks that cut across a lot of categories, thinking Amazon, Walmart, target Costco, a few of those ones.[00:22:33] But then you have some category specific ones that are just highly, highly relevant to their categories that a best buy or a home Depot. So they have really viable, healthy, strong networks for their advertisers. It's it's, once you get out of that kind of category leadership position, you see the second and third players within a category, trying to start a network where you start to question the, the opportunity.[00:22:55] I will say for everyone, if they have enough traffic on their sites and apps, there's kind of the low hanging fruit of just monetizing that search. And you can partner, with some platform partners the Criteo's and Citrus ads of the world to, to do the basic monetization that would be kind of low lift.[00:23:10] I don't know if it's gonna add up to a lot, but I, if it's minimal effort and you can get something out of it, It may be very well be worth it for all these networks. I just don't think most of them will kind of ultimately emerge as having this more, walled garden status, where people are coming in, hands on keyboard, analyzing the data, doing different types of ad buys beyond just basic sponsored product listings.[00:23:35] One RMN To Rule Them All?[00:23:35] Jeff Roster: Well, Andrew, if, there's 600 tier one retailers, which , by my definition is greater than a billion dollars in revenue. And if we're assuming e-com is anywhere from, 10 to 20% of those that you know, that revenue there's a fair amount of traffic in all those websites. Wouldn't each one of those, players be wouldn't it be worth them to have some kind of a, network set up? If they have enough traffic, it's gotta, they obviously have to have traffic, but if they do?[00:23:59] Andrew Lipsman: Yeah. Like I said, if, if it, if it's minimal investment and you can get something out of it, I just think most should not expect it to add up to a whole lot. So you mentioned, how would you say 600? [00:24:10] Jeff Roster: Well, it's between four to 600 retail, north American retailers that are graded a billion dollars in revenue.[00:24:15] Andrew Lipsman: So I, I shared data that said it's about a 40 billion dollar market this year, next year, 50 billion. If you have a half, a percentage point of that market, that's 500 million in I'm sorry, if you have a full percentage point, that's 500 million in revenue. Not that many are gonna get to a full percentage point of that market. If your name isn't Amazon. It's a small handful. So let's say 0.1% of the market. Now you're talking about 50 million in revenue. If you're a billion dollar company is 50 billion in revenue, a big deal. [00:24:45] Jeff Roster: It's not moving though. It depends on if it's driving value to what you're trying to accomplish. And I guess that may be where, where we get into the definition of what we're, what we're actually doing.[00:24:55] If we're just selling ads, it's probably not, but if we're somehow supporting the brand and I don't know, you know, all the good stuff may, maybe so I don't know. [00:25:03] Andrew Lipsman: Right. I, if you're, if you're able to more deeply engage your, brand partners within retail physical retail, I mean, I think this is where it starts to get more interesting is when you start to look at it in an omnichannel basis and think about the in-store impact.[00:25:16] Yes. That, that can certainly help there. And then the other thing I would say is, traffic for, online e-commerce is what you need in order to have some sort of a viable business here. Most of these retailers have way, way, way more foot traffic than they do online traffic. And if you start to think about that in-store traffic as the audience the, the calculation can change for a lot of these companies.[00:25:42] I mean, if you think, a CVS or a Walgreens, right, they may have 10 or 20 million, 30 million visitors online in a given month. They could have well over a hundred million in stores in a given month. So there are many examples where, where that in-store traffic is multiples higher than than that online traffic.[00:25:59] And, and Jeff and Andrew is all great points knowing that the customer journey is so fragmented. And, and so, so that they're disparate between digital, physical channels. Now it's, it's almost saying it's intuitive people will actually go by default code to Amazon for the search results. So it's the first thing that comes up when you Google something.[00:26:16] Brandon Rael: Amazon certainly has a foothold and it, the dominant leader in this, retail media, you know, what can a mid-level retail expect if they, when they, the foray try to compete with an Amazon or Walmart or, or target hurry as well, established in dominant? What, what can they do to branching themselves?[00:26:31] Is it something, some other methods or storytelling or authentic way of reaching customers that these larger brand are doing? [00:26:38] Andrew Lipsman: I don't think anyone's gonna be particularly successful. If Amazon is the bar, Amazon's got 75 plus percent of the market. And as the market grows, they're gonna maintain mostly that percentage going forward for at least the next several years. They're innovating faster than anyone else. They've got bigger opportunities in front of them. I mentioned connected TV. They're just getting started there. They've got NFL Thursday night football, exclusive rights. They're building out their footprint of Amazon fresh stores. I mean, that, that is the single biggest thing that nobody's paying attention to with Amazon's advertising ambitions, cuz they're getting all this first party data on what people are buying in stores using that to target ads through any platform.[00:27:18] And then they can measure the impact of those ads on on sales. Do people buy more of that once it's in store? Now Amazon is limited by their footprint in physical retail today, but they'll build it out to the critical mass needed to power that full closed loop. So I don't think anybody can really compete with Amazon.[00:27:35] The question is can they build a big enough business that it starts to make a real difference to their financial prospects? And I think the answer is a resounding yes, for a few key players. And I think for most of the rest, the mid tail and the long tail, I would say probably barely worth their effort, but still, maybe worth their effort.[00:27:53] But I think everybody's really chasing the dream of what Amazon has, which is reasonable, incremental revenue, which for Amazon is like, I don't know, five to 7% on their top line. But it, you know, crazy high margins. [00:28:04] Brandon Rael: Yeah. I think it's a losing some game to even think of competing directly with Amazon.[00:28:08] Having, you have to find a way or niche that's not dominated by that, presence. Yeah, that's a great point. There's no reason to probably go head to head with these, these goliaths. [00:28:17] Ricardo Belmar: Yeah. And at the end of the day, right. They're not really in competition or are they, but I mean, I suppose if we're particularly talking about you know, as Brandon mentioned earlier, if you're like a midsize or maybe even a specialty retailer, your target isn't really to compete with Amazon's media network, is it?[00:28:31] Andrew Lipsman: No, I, I think that what you wanna do is, is court more brand dollars. And, and as I mentioned, they're gonna come from several different places. The question is, how can you do that effectively? You have to have a value proposition that's really strong. If you're a category leader like a home Depot or a best buy, right.[00:28:48] You know, you're already a destination for people who are in market for those categories. There's also, you know, different dynamics category by category where you could do something kind of interesting. The one that I'm looking at right now is so like Ulta was a recent one that you mentioned they got into the market, right?[00:29:05] Beauty is, is kind of interesting because there's the potential to layer in product sampling in that category as part of the ad network buy. So not only can you, have advertising across different touchpoints along the path to purchase, but you could also then introduce that user to a free sample of some product and then see what the purchase patterns are like after that trial.[00:29:29] And there's potentially a lot of value in that. I think product sampling is something you haven't heard a lot about in the space. Instacart and go puff have talked about it the most to this point in time, Amazon actually had a sampling initiative that they walked back a year or so ago. I think they'll probably reintroduce it at some point, but in, in consumer package goods and beauty, those are categories where I think product sampling can start to make things really interesting.[00:29:51] And we just haven't seen that come into play in any meaningful way yet. [00:29:55] Ricardo Belmar: And as you say that, that really tells me that shouldn't we see more of this in grocery. So I know Kroger, has a pretty successful media network today. And Instacart obviously in that space, but would we expect then that just about all of the large groceries should be doing this if they're not already?[00:30:11] Andrew Lipsman: Absolutely. Absolutely. They should. Yeah, it's it, it's, it's a no brainer and to me, this is like the next frontier of advertising, right. We always think about how do you formulate that brand impression, but it it's never coupled with then the product experience on the back end, right.[00:30:25] Sampling exists, but it's completely isolated. And it's from a promotions budget or it's off to the side and there's rarely if ever a link between the person who is receiving the brand messages and also then experiencing the product. I think this could be transformative and anybody who's into marketing analytics, I think would just salivate it at getting that data back to understand right.[00:30:46] How to optimize not just, trial and adoption, but lifetime value around brand purchase. [00:30:52] Ricardo Belmar: and I think what I'm really hearing is, the key here as this goes forward and grows as a medium, is the I'll use the word bundling of multiple mediums, if you will. It's not just about if I'm not Amazon, I'm not just trying to sell ad units on my e-commerce marketplace.[00:31:07] It's really more about how am I combining this with physical placements in store or, or anywhere else. It's really the, the advertising analogy to an omnichannel experience, right. For, for the brand. It's how do I, as the retailer bring the brand in, in multiple places, bundled and wrapping it around that overall shopping journey using all of these ad units, right?[00:31:27] Andrew Lipsman: Yep. From the furthest up the funnel, like TV or connected TV,[00:31:32] Ricardo Belmar: right. [00:31:32] Andrew Lipsman: Display and video online working its way down the funnel to that search or if you're in a physical store at, at the shelf. [00:31:40] Ricardo Belmar: Yeah, exactly, exactly. So, coming back to how, how is a retailer gonna rate this a successful attempt, if you will, at a retail media network, they can't all be Amazon. They can't all be Walmart nor nor do they need to necessarily aspire to be that successful with, with their retail media network. What, what's good enough if you will, to, to kind of declare success.[00:32:00] Andrew Lipsman: Good enough. I, for most, I would say is don't sink a ton of investment and think that you can do it by yourself. partner, you know, pay, pay to partner, structure the deal in a way that makes sense where you're not paying through the nose just to get something basic off the ground. In most cases, there's, there's not gonna be the density of advertiser interest to make it really worthwhile.[00:32:23] You're just competing for too much attention. So as long as you can minimize your investment and take whatever happens from preexisting traffic as gravy. I think that's gonna be successful because it, you know, we'll move the needle. As I said, a little bit on revenue, but actually can, can make some meaningful and noticeable improvements on the bottom line.[00:32:43] I mentioned Amazon, obviously not everyone's Amazon, but you know, Walmart has started to see at least in the end of 2021, they were starting to see some margin expansion that they were attributing to advertising as that ad business finally started to scale for them. [00:32:56] The Consumer Perspective[00:32:56] Ricardo Belmar: So let's kind of move a little bit and look at this from the consumer's perspective, because one, one of the things, if there is a complaint or negative that I I've seen plenty of folks writing about, and we can use Amazon as the example , at what point is too many ads, just too many ads from the consumer's point of view, especially if we're talking about, and this maybe is more applicable of an argument in the digital space when we're looking at product search results. At what point is too many ads, just, just ruining the experience and hindering the shopping journey versus helping it from the consumer's perspective.[00:33:27] Andrew Lipsman: Yeah. I mean, this is a huge issue that is not talked about nearly enough. Advertising in retail environments can create a customer experience, problem, both online and in store. Now what's interesting is Amazon, the ad loads on Amazon because there's so much more density of, of a advertisers on there is way higher than everyone else.[00:33:48] I think on first page sponsored impressions is about eight to nine for Amazon. And you know, the next biggest players are between two and four at best. So there's a lot of ads. If, if you're doing searches for a lot of products in Amazon these days here, you'll see a lot of ads. What's interesting is consumers seem to be tolerating them pretty well.[00:34:07] We did research. One of the things Amazon, I think has done very well is they have improved their advertising relevance. So as long as you're putting relevant ads in front of people, it's not taking them away from what they were searching for in the first place. I think that it's gonna be well tolerated. That said I've personally had experiences searching on Amazon where using specific terms, I've gotten bad ad impressions that just did not meet the criteria I was looking for at all. And did take me further from the purchase. So it does happen. I think there's an opportunity now, as Amazon has gotten very crowded, there's higher and growing return on ad spend on other networks.[00:34:41] So this is now I, I look at this period of time as like the chance for the second wave, the second tier of retail media networks to really flourish. They've got competitive differentiation against Amazon to start to court those budgets. So I think we're in this, this phase where we are gonna start to see a lot more flowers bloom in a meaningful way.[00:35:02] Ricardo Belmar: And are there particular retail segments that you think are there are less tapped today? And one, one in particular that I, I kinda keep coming back to in my head is what about, where are luxury brands fitting into this? Is there a luxury retailer that can leverage this to become more successful that we haven't seen yet?[00:35:21] And then maybe the second part to this is if there's a category or group of retailers that maybe can use this in a, in a way to produce a better experience, maybe it's department stores, because they're kind of like that physical marketplace as it is today, but as a segment, right, let's face it.[00:35:36] They're, they're kind of floundering. But my understanding for example, is that Macy's has been seeing some success with their retail media network. So you know, should we expect that department stores will see a lot of success with this? [00:35:46] Andrew Lipsman: I, I think you hit the nail on the head with department stores as a big opportunity and Macy's is doing a good job outta the gate.[00:35:52] Nordstrom getting into the space. It makes a lot of sense there because you have categories with, healthier margins in general, you've got scale. You've got enough traffic. So I, I do think that application will work well. The luxury one depends how you define luxury, but I'll provide kind of an argument for and against the argument for is.[00:36:11] Very high margins in luxury. So this is where ads can be really valuable. And you've got more margin for error. At the same time, luxury is the category where you least want to be interruptive of the, consumer experience. I don't know that luxury shoppers are gonna enjoy being barraged with overly promotional, advertising, driven things.[00:36:31] They like, brand experience. So if you can use data from retail media to, to power, really high quality brand advertising, those applications may work really well. But beyond that, I just, you know, I can't think of like luxury and, and marketplace offerings. Like one is more commodity, one is more premium and I just don't know how well they intersect in this application.[00:36:53] Casey Golden: Yeah. I mean, I know Farfetch has been. Obviously takes dollars for ad spend from the brands. But they've also been reselling their first party, the brand's first party or second party data back to them. So a brand can buy their customer data from Farfetch, [00:37:10] Andrew Lipsman: which is interesting, cuz that's one of the things because luxury has always been so analog.[00:37:15] Right. I mean they were the last ones to, to have e-commerce sites at all, a [00:37:18] Casey Golden: amount of data on their own customers and they've been around the longest . [00:37:22] Andrew Lipsman: Yep. Yeah. Right. So that, that's actually an interesting way to kind of make it work is yes. They, they, they're sitting there with absolutely no first party data and this is a way to get access to it.[00:37:32] Audience Q&A[00:37:32] Ricardo Belmar: Hey, well this is probably a good time for me to let everyone in the audience know if you've got any questions for any, any of us up here on the stage. Now's a good time to raise your hand and we'll bring you up on stage. Yeah. And Cynthia, welcome to the stage. [00:37:44] Cynthia Hollen: Hey everybody. [00:37:45] Welcome back. [00:37:47] Ricardo Belmar: Thank you.[00:37:48] Cynthia Hollen: Hey, I have a question on retail media network that I I think you guys can best answer, which is that I'm trying to differentiate between the retail media networks that we've had for a hundred years where we've paid extra to have a different position on a shelf or paid for an end cap or cetera, cetera, et cetera, paid for a, a co-op advertising in the newspaper or something.[00:38:15] How are retailers thinking differently about that spend and why is it strategically different?[00:38:22] Andrew Lipsman: Yeah, I mean, the rise of retail media, as we talk about it today really is about digital coming from the vantage point of digital. So I think what what's kind of happened is digital budgets. E-commerce budgets started moving towards its opportunity and it wasn't necessarily the same decision makers.[00:38:40] Then as this opportunity started to mesh more in, omnichannel as, as, as retailers started to become more omnichannel in their thinking. I think that's why it created all these organizational issues and starting to wrestle over and rationalize budgets. I, I mean, I don't know that they're, that they are doing it in any uniform way or that there's consistency.[00:39:03] I think it's actually been a really messy process from everything I've heard inside of companies. And it isn't just the like migration of preexisting retail media that as you said, has been around for a long time and starting to move that into digital. It, it it's been a very indirect path.[00:39:18] Ricardo Belmar: Yeah, I think I, I would come back to what we were talking earlier, right? It's this ability to bundle in so many different channels and, and mediums right into one, one collective spend that the retailer offers to the brand. I, I kind of see that as being the, I'll use the word innovation. I don't know if Jeff May argue with me on using that term in this case, but I'm gonna call it the innovation in, in all of this is that sure.[00:39:39] We've had different ways to have that advertising relationship between retail and brand before, but I think it's, it's just the ability to combine into so many different mediums and offer a more data around the, the consumer at the same time.[00:39:50] Do we answer your question, Cynthia? Or are we not getting to it?[00:39:52] Cynthia Hollen: No. I, I think that you're, you're definitely talking about both or organizationally and strategically inside the corporations it's different. And also that it allows for, that allows for different kinds of combinations or a different way of looking at it. I'm not sure that from the consumer standpoint, when we argue about is when is advertising going to be too much, if the consumer wasn't already being hit with, with all kinds of subtle and not subtle promotions in store, and if they're necessarily sensing the difference, except that they had kind of a refuge in digital for 10 years away from the barrage of, of retail media in store.[00:40:37] And now it's coming back to digital. So on the consumer side, I, I wonder if the consumer sees it as differently as we see it. [00:40:47] Ricardo Belmar: Yeah. I think that's kind of what we were starting to get at to earlier. And that, at what point is it just too much from the consumer's point of view? I think you're right. That on the digital side, consumers probably didn't notice at first that they were getting more and more ads incrementally in different places.[00:41:02] I think, you know, there was an understanding and when I did that Google search, yeah. It was going to get some ad placement at the top of my search results page. And then when I got to an e-commerce site, I think everyone assumed for a long while that the search I was getting was just the results of the search, right.[00:41:15] Based on the retailer having indexed the product catalog. But then we started to see more and more ad placement by Amazon, and then other retailers saw that and all kind of snowballed into where we're at today. But it's a great question. I, I do ask that a lot is that what's too much.[00:41:29] When does it become too many ads? And maybe the answer is a lot like what we've said in this room, in, in past sessions about integration of technology in general, in that shopping experience, that the more seamless and transparent you make it. So it's not quite in your face, the less noticed it will get that it is blatantly an advertisement, right to that consumer.[00:41:49] Andrew Lipsman: Yeah. I think consumers are, are generally more tolerant of native ad units, which is what these are. The frog has been slowly boiling here and I, I think people tolerate it and have tolerated and will tolerate it. The question is what's that point at which they'll, finally, jump out. I frankly, am surprised with Amazon specifically, given what the ad loads are like today that all the research I've seen says that consumers don't have a problem with it, or minimally have a problem with it.[00:42:17] So that suggests it's, they're highly tolerant of it. They, they expect it. They've gotten used to it. I mean, go do a Google search today. I mean, it's unbelievable from my standpoint, when you see how many ads you have to scroll through just to get to a basic search result now.[00:42:33] Ricardo Belmar: yeah, absolutely.[00:42:34] Andrew Lipsman: It's just, this is what's been happening over the years.[00:42:36] So in context that, searching on Amazon probably doesn't seem any worse. Like I said, though, that the relevance is really what matters. Consumers don't care if somebody paid to put a product listing in front of you, if it's the product listing that warrants being in front of you, based on what you're searching for, if it's totally off base that's when consumers really get annoyed.[00:42:57] Casey Golden: Andrew. What are your thoughts on, you know, as we're talking about, when is enough, enough, or too much, too much, a lot of TV shows or stations, you can go ahead and pay for an episode without ads. Do you think that eCommerce will kind of move potentially to have part of that model where you'll pay for your Google engine or you'll pay for shopping on a brand like Sans ad?[00:43:27] Andrew Lipsman: There's always the possibility of something like that being introduced and it will always be a very, very tiny fragment. do that. Right. Like you can do that on Twitter today. I think right. You actually have an ad free experience there now. [00:43:41] Ricardo Belmar: Yeah. With Twitter blue, [00:43:42] Andrew Lipsman: Twitter blue. Like I,[00:43:43] Casey Golden: I pay for Twitter, [00:43:44] Andrew Lipsman: not a whole lot of uptake on, on that offering.[00:43:47] Casey Golden: Yeah. It's interesting. [00:43:48] Brandon Rael: Great question, Casey. At what point does it come overwhelming? So I'm curious, what's your sense, Andrew, and where things is going from a social selling perspective like Instagram and TikTok other platforms.[00:43:57] Andrew Lipsman: Well, so I I'm, I'm comparing ads on entertainment experiences versus a shopping experience. I will say maybe I'm speaking for myself, but I think this is maybe broadly true be because shopping is often a more utilitarian experience. You're people don't have as much of a problem. It's already a commercial engagement.[00:44:15] People probably have less issue with brand impressions. Whereas with media, we're accustomed to advertising around it, but it's interrupted to the content experience. So I just don't think that the, content experience for retail is as interruptible. Which is why ultimately like I said, I, I think consumers are tolerating these ads and maybe there's a future where it gets to a point where they've had enough, but I think it's pretty far out into the future.[00:44:39] Ricardo Belmar: Yeah. I think it's probably telling that Netflix is considering adding a lower ad based tier. [00:44:44] Andrew Lipsman: Yeah.[00:44:45] RMN vs Livestreaming vs Metaverse[00:44:45] Ricardo Belmar: One question I've been saving here towards the end that I wanna go around the whole group of speakers. Let's do this in like a rapid fire response. I wanna know what everyone thinks of intersection between retail media networks and live streaming and the metaverse. Andrew, let's start with you. I'm curious what you're thinking. [00:45:01] Andrew Lipsman: Yeah. So I'm more skeptical on these trends, I think, than most people. Live streaming, I just don't think the US at least is anywhere close to what China is. So where live streaming is relevant on some sites you've seen Amazon live and some other instances yes, it's natural that advertising may be sprinkled into that.[00:45:20] I don't think it's gonna be a key driver of, of those retail media engagements. Metaverse. I don't know. I just feel like this is so far out into the future and I actually don't think it's gonna be the next big platform at all. I think mobile is the next big platform. And I say that as a joke, I mean, I think mobile isn't going anywhere.[00:45:37] And if the metaverse gets enough adoption and people spend enough time and becomes an advertising paradigm, then sure. Retail media will, will be a part of that. I don't expect us to ever get there. I tend to think of the metaverse as really just the extension of gaming. So why aren't we talking about in-game advertising more?[00:45:55] that's [00:45:56] Ricardo Belmar: well, that's a good point. That's a good point. [00:45:57] Andrew Lipsman: Like that's that engagement's there today and there's been some innovation, Ricardo, you're Microsoft, you know, one of the best places to do it. I'm, I'm bullish on the opportunity for Microsoft in in-game advertising, but to me, right? Like let's, let's figure that out and, and see that ramp before we start talking about metaverse advertising. [00:46:15] Ricardo Belmar: Yeah. I think to, to your point, we've, we've seen recent announcements of more and more of that in game advertising. It seems like every week I see another major brand announcing that they're opening up a, storefront in Roblox.[00:46:26] Andrew Lipsman: yeah. And that's real today. Like that's where our, [00:46:28] Ricardo Belmar: and that's happening today. No, that's a great point. Yeah. Great point, Jeff. What's your take. [00:46:32] Jeff Roster: So live streaming is really fascinating. Couldn't spell it about what a year ago. And since then really, spent a lot of time looking at what's happened in AsiaPac have done one interview with it and I have another one that's just gonna be insane.[00:46:44] We are starting to see some very legit money being put from the VC community into efforts here in the us and north America. So is that gonna explode, you know, the next 18 months? No, but I, I think in three to five year increments, so I'm very, very bullish on north America and live streaming. As an event, I think that content will, that that is generated in livestream and will also become video assets that will be deployed all across digital signage and stores and, you know, blah, blah, blah, blah, blah.[00:47:10] So we'll just get into this giant circle. So, I don't know if that turns into ad revenue, but it is going to be a major, major, major focus probably out in the next two years. The metaverse, I'm a little more bullish. If you're talking in, the three to five year window. You know, I'm a pilot, I'm multi engine pilot.[00:47:24] I've used augmented reality for, for, for 20 years. There's nothing new about that. It's just, will it become viable? I have certain dietary requirements for my wife and I would love to use augmented reality to, to see what ingredients are appropriate and what aren't, that's kind of a metaverse scenario.[00:47:40] So used correctly I'm super bullish on that. And I could validate that with a bunch of IT or a bunch of VC spend that direction, but again, that's a five year window that I'm talking about. [00:47:49] Ricardo Belmar: Okay. Okay. Casey, what's your thought. [00:47:51] Casey Golden: Live streaming and the metaverse. I'm obviously pro metaverse just for culture change for brands to be more experiential and learn how to fail.[00:48:02] And I think it's gonna be a great place for product discovery and brand discovery for engagement. That's a little bit more meaningful than a live stream, which is one to many. I'm a big fan of two way conversations and two way engagement versus one. But I think there's a heavy level of consumer education or consumer attention span that it takes to stop multitasking, to pay attention to a live stream or join the metaverse.[00:48:29] So I think it, the consumer adoption and their bandwidth and attention span will depict a lot of it on how fast or what is adopted. [00:48:37] Ricardo Belmar: That's a good point. Brendan, what are your thoughts? [00:48:39] Brandon Rael: Yes. So I'm in agreement with, Jeff and, and Casey.[00:48:41] I, I think we're looking at a long term window of opportunity with the VC spending. I also think in terms of the target audience, you know, we're seeing all the strides that the luxury brands are made, especially Louis Vitton and Gucci, and now Nike and especially space in the metaverse. So there's a significant growth opportunity in revenue opportunity, but I think the target customers using that, virtual reality world, it already exists. You know, it's our, it's the gen Z or gen alpha whatever's coming next. That's gonna be that target customer who is already in that environment and already live in, in those worlds. [00:49:12] Ricardo Belmar: Okay. And just to close that thought out, I'm somewhere , in the middle, but as far as live streaming, I do think that like, Jeff and Casey, and Brandon I guess I am a little more bullish on that one.[00:49:22] It may not be in the next year, but certainly with, I think Jeff, you said within the next, maybe one to two years or something like that, but ultimately it's just gonna become yet another sales channel and it's one that everyone's gonna take advantage of and have in their collection of sales channels.[00:49:36] So I think it has a place. Metaverse I think is just earlier in that adoption curve.[00:49:40] We're still in the experimentation phase. I think that we'll see more and more brands do it. I think Andrew, I think you're spot on, on your comment about gaming, advertising and product placement. We're gonna see a lot more of that before we see more consumer adoption and relevance in what I'll call the mainstream metaverse that everyone wants to hype up these days.[00:49:58] So that will come first cuz it's already here. It's happening. That's gonna be the stepping stone for consumers to a broader metaverse through the, through the gaming. [00:50:06] Andrew Lipsman: Can I just make one final point here? By the way, I'm, fine swimming against the grain on, both of these behaviors. One of the reasons I'm a little bit more measured or skeptical on them is because they both require immersive engagement. [00:50:18] Ricardo Belmar: Mm-hmm okay. [00:50:19] Andrew Lipsman: Right. That there there's more effort involved. Now, if you can get over that hurdle on immersive engagement on live streaming, you've got something, cuz somebody's already in, in a commercial instance, we've seen it happen in Asia.[00:50:30] We just haven't seen it move over here. That's one that I feel like I'm happy to be wrong about that I just, I haven't seen the movement on the consumer here yet. The metaverse though. I will say this all major advertising mediums, the biggest ones, TV, radio, and social media depend on ambient or passive engagement.[00:50:50] That's where you rack up time spent. Time spent is, is what drives major brand advertising. I can't ever see a point where everybody is going into VR worlds. And spend where you'll have a segment of, of the audience. Like you have gamers today. And, and some people may spend quite a lot of time, but I can't ever see that being more than, you know, a meaningful sliver of the advertising market as opposed to the next dominant platform.[00:51:12] That that's the biggest reason for my skepticism there. [00:51:17] Ricardo Belmar: Okay. Yeah, that's a fair [00:51:18] point. That's a fair point about passive versus actively engaged as, a medium. And I, probably do have to agree with you there that that certainly slows adoption for something that's not passive in that sense for, for becoming a large scale medium.[00:51:31] But it's definitely gonna be interesting to see how this plays out. I think there's room for all of these things. It's, more a question of, what's the mix, what's the balance gonna be? And I think that really just comes down to speed of adoption for each of these different mediums.[00:51:43] So with that, it's a good time for us to wrap up and close out the room. Andrew, it has been a pleasure having you. This has been a fantastic discussion. Thank you so much for joining us. [00:51:52] Andrew Lipsman: This was really fun. Thanks for having me. [00:51:54] Ricardo Belmar: I hope you come back and join us again.[00:51:55] And wanna thank all the other Retail Avengers on stage . Thanks everybody here in the audience, thanks everyone. Have a great evening! [00:52:01] Casey Golden: Thanks Andrew! [00:52:02] Jeff Roster: See ya! [00:52:03] Andrew Lipsman Recap Interview[00:52:03] Ricardo Belmar: Welcome back Retail Razor Show listeners. We hope you enjoyed another truly amazing Clubhouse discussion on retail media networks.[00:52:15] Casey Golden: It's a super hot topic right now. And since that discussion happened a few months ago, we brought Andrew Lipsman back to the show to check in, see what's new and learn a little bit more. What's changed and what's yet to come. Welcome back, Andrew.[00:52:30] Andrew Lipsman: Thanks for having me. [00:52:31] Ricardo Belmar: So Andrew, since we last spoke on this, it was about early June. So what has changed? I mean, what's changed in, the wonderful land of retail media, one of my favorite topics. And I guess I'll, I'll get a guess. Judging from recent earnings reports across different retailers, Amazon Walmart seemed to keep doing well with their media networks is, is, do things look as rosy as they did three months ago for this space.[00:52:54] Andrew Lipsman: Yeah. In some ways a little bit better in some ways, maybe slightly worse. I, I haven't really changed my viewpoint on the space at all, because I, I think you have to take a long term view and there's such a huge opportunity still in front. So is it gonna be affected by some of the advertising headwinds?[00:53:12] Yes. Right. If ad spend dries up, that's gonna pull from everywhere. These are, it seems like the, the most resistant. To those dollars being pulled, be in, in large part because there's clear return on ad spend and that closed loop. And I think dollars just migrate towards performance in more recessionary times.[00:53:32] But what has also changed is that things looked a lot worse in Q2 than at this current moment. Right. I, I personally am a lot more optimistic about the state of the consumer economy and where it's at headed into the back half of the year. And what that means for eCommerce and as eCommerce goes, so goes retail, media advertising.[00:53:50] So I think we can be a bit more optimistic for the back half of the year. And really no reason at all to change the long term view of retail media. You mentioned Amazon and Walmart. You know, those growth rates came down from what they had previously reported. And yet at the same time, they were clearly way, way better than everyone else in the digital advertising space.[00:54:11] So I think that's kind of an appropriate way to look at.[00:54:13] Ricardo Belmar: Well, so my quick follow up to that, in the clubhouse, one of our topics was how many new retail media networks are being announced from, different retailers. Do you still see that trending or is that slowed down at all?[00:54:24] Andrew Lipsman: It's starting to slow down. Right. It just, it seemed like for the past 18 months or so it was one after another, after another. And I, I think fairly recently, somebody kind of predicted that Dick's sporting goods had to be the next one, cuz it seemed like the only white space. It was an obvious category leader.[00:54:39] Ricardo Belmar: right [00:54:40] Andrew Lipsman: and oh, low and behold, there's Dick sporting goods, retail media network. So at this point I think a lot of the white space is covered. And we'll start to bleed more into, I guess, what people are putting under the banner of commerce media, which is kind of moving into other verticals, think Marriott media network, as an example, that's, you know, serving travel.[00:54:58] So we'll start to, we'll see more of those, but I think at this point. This space is starting to get more saturated and frankly, listen, not all of them are gonna really, really succeed. So at some point in the future, I don't know how long it'll take, but some of these will probably kind of die on the vine and, and just not continue to be invested in, but we're probably a couple of years away from that happening.[00:55:17] Casey Golden: Okay. So in our clubhouse session, we, we spoke of which type types of retailers are best suited for building media networks. At the time, Ulta had just announced theirs, any new, interesting announcements, as far as who is suitable? If it's getting saturated, like who are the players that should be playing or that you think are going to make it through the saturation?[00:55:41] Andrew Lipsman: Yeah. I mean, I think you have to look at it from the brand's standpoint first, right? There's only so many retail media networks, walled garden types that they can operate with at, at one time they're already stretched pretty thin. So they're not necessarily inclined to go deeper and deeper into more channels.[00:55:57] It has to really have relevance, which is why you see some category leaders carve out viable businesses, or you just have to have that scale, which is, you know, where the big marketplaces, the Amazons and Walmarts and, and others are gonna play. I, I think that's where, where this market sort of nets out.[00:56:15] And I think where, where you start to see some of the shakeout is if you are a vertical retailer and you're not the clear number one in your space. If you're not dicks or you're not best buy or whomever else, I think those ones might have a tougher time.[00:56:30] Ricardo Belmar: So on this subject, of which categories are the ones that make sense, for example, you just gave some, some good examples there. And I think in my mind, you know, we've been through all, all the mass merchandisers, right? The Walmarts, the Targets, they're the, the category leaders, right? Like a best buy you know, we, we had beauty was new at the time we did in the clubhouse with Ulta having announced then that seems like another natural one. Are, are we seeing these in categories? And I just can't remember now because it's so easy to lose track of all the announcements, but I'm thinking like pharmacy drug stores, you know, Walgreens, CVS, Rite aid. And, and then from what about would it be odd to think of convenience stores as another possibility?[00:57:06] And then my favorite one that I still feel like other than Macy's we never see examples of is department stores.[00:57:11] Andrew Lipsman: Yeah. Well, so department stores, you do have Kohl's, Nordstrom, Macy's. So I think they're viable players and, you know, Macy's has gotten off to a pretty good start with, with their network for sure. Drug stores, you know, Walmart and CVS are viable. I think anyone who has scale and serves consumer package goods broadly can play.[00:57:30] So, so CVS and, and Walgreens, and it's easy to overlook. They have, they don't get as much website traffic, but their mobile traffic is really, really high. So that traffic, I think, will support their businesses. And the last segment you mentioned is convenience. I think that's also really interesting.[00:57:47] So you've got go puff and then go puff can definitely be a viable player. And I've talked to a lot of CPG brands who are interested in that. Then you kind of get into Uber and DoorDash and then maybe the seven elevens of the world. That's where my question comes in is like seven 11, huge, huge footprint.[00:58:02] I think that network though, Is viable, but I think it's gonna depend a lot more on store traffic and in store retail media than it will on that that app traffic essentially.[00:58:15] Ricardo Belmar: yeah, that kinda makes sense for them. Yeah. And then what, what about grocery? Do we have all the major grocery players, have they all started in their retail media network?[00:58:23] Andrew Lipsman: They're they're all in the game, except you have this one kind of outlier with Costco, which hasn't really built out anything. And yet, like it's, it's, it's very analog and, and yet, because they're so big people still play and it seems to be working. So that one is just kind of a funny outlier to me, but yeah, every major player in grocery is in the game now.[00:58:43] Casey Golden: So based on your research, I think earlier in the year, you had forecasted around 40 billion this year growing to 60 billion by 2024, are those numbers still tracking for you or are you expecting a little bit more shakeout?[00:58:58] Andrew Lipsman: Yeah. So I don't wanna speak completely on behalf of our forecasting team, but cuz we don't have an updated forecast, but I will say this like the numbers for Q2 tracked a little bit below what our expectations were for that quarter. But I could also see it making up that ground in Q3 and Q4.[00:59:15] So I think wherever it nets out, it's it's not gonna be much of a difference from, from where we're at currently the fundamentals are are, as they were before.[00:59:23] Casey Golden: When you guys are looking at these forecasts. Is there anything specific, like one thing that you're looking out for in this space?[00:59:30] Andrew Lipsman: If there's one thing you have to look at what's happening with Amazon, just because Amazon is still currently three quarters of the market. So it's gonna drive the market. Very deliberately. And so, part, part of the bullishness, I guess, for Q3 and Q4 is Amazon has a prime day in both of those quarters this year.[00:59:47] So they, the advertising really ratchets up for both of those events so that that's gonna drive. The the whole space maybe even give it some upside. But also, the next tier of players, I'm seeing a lot of evidence that they are really getting their feet underneath them. They're starting to scale the business.[01:00:04] I'll use Walmart as an example, one of the things that they did recently is they instituted a second price auction. I mean, that was the big impediment that I kept hearing from brands. And once Walmart instituted that, that Auction model, it gave brands a lot more confidence to invest.[01:00:20] So the interesting thing is in the very short term, CPCs on Walmart went down, right? So that actually hurts. It dings Walmart's ability to monetize in the short term, long term, those budgets are gonna flow a lot more freely. So it's really gonna be a smart, long term move for Walmart. So I, I think their trajectory is gonna be strong.[01:00:38] Kroger seems to be doing really good things. Just a lot of these other players are, are executing better and better and starting to make up ground and providing all the tools that that advertisers want and need to fully invest. And at the same time, you look around at market conditions, there's all these macro factors affecting the marketing ecosystem that provide a lot of reason for budgets to move in this direction.[01:01:00] I've said that retail media is digital advertising's third big wave. And I'm now convinced that it's destined to be the biggest of the three waves, eventually surpassing search and social. And the reason that I believe that is because to date, we've mostly monetized through search.[01:01:16] There's still runway for search to grow, but there's so many other layers. To drive growth in the future, whether that's going up the funnel into connected TV, whether that's making better use of offline sales data or whether that's the rise of in-store media.[01:01:31] Ricardo Belmar: And, and let me ask you, I don't think we got to touch on this too much in, in the clubhouse session. When I think about this, it seems like the key factors for success here in terms of what the, the retailer's media network is offering to brands. It's how they're taking the first party data they have, how they might be able to combine with other data sets to offer in some way, right. a more. guess I'm gonna choose my words carefully here, a more precise capability, right? To target that customer than the other retail networks that the brands may be considering putting their spend into. And maybe I have to put Amazon kind of to one side, cuz to your point, that's like three fourths of the spend right now.[01:02:08] But, and I maintain that for other brands, the mission isn't to out Amazon, Amazon on this is just to look at your own media network and what can you do to make that offering special to the brands you support and, and not worry about whether you're stealing any share from, from Amazon or not, because that's not the, the most important piece, but is it really come down to differences in the technology that each retailer bases their media network on?[01:02:33] Andrew Lipsman: It, I think it comes down to ultimately what data they have. This is fueled by first party data, first party purchase data, shopping and purchase data. And that can be used for better targeting. Right? If the status quo is behavioral targeting through Facebook and, and other behaviorally targeted networks.[01:02:50] Now it's purchase based targeting. So that's more important. So you got that targeting and then you got the measurement on the back end, cuz you can see if it drives purchase. So that value proposition is really what unlocks budgets historically. Right? When you can see the return on ad spend, that's what brought dollars to Google initially. It's what Facebook then perfected it in its market. And Amazon has already kind of done that. But if you wanna know who's gonna do well in the future, look to where the data is. And Walmart is sitting on this huge piece of data because they've, they have in-store sales data. It hasn't been fully operationalized.[01:03:25] And what I mean by that is campaigns don't really pull that information to see how an online ad might drive offline sales. Immediately, they do this stuff, but it needs to get faster and faster and more real time because digital ads get optimized in real time as that gap narrows and we get to real time optimization or near realtime optimization, that's where the spend just starts to really flow in.[01:03:48] So. I'd say the mandate for the big brick and mortar retailers should be, get that data operationalized as fast as you possibly can and watch the budgets flow. But guess what? That's a big advantage for all of them over Amazon, because Amazon is still early in building out their footprint.[01:04:03] Ricardo Belmar: and, I was gonna say then, in that sense, then the, key becomes how quickly can those brick and mortar retailers combine their in-store generated data, with any, other data sets they have to make that offering more unique. And so that you can actually start tracking conversion to in-store through all of the digital placements they may offer the brand.[01:04:20] Andrew Lipsman: Absolutely. And, and the thing about in-store, you know, that's the other 85% of sales now linking online to in-store. I'm not gonna say that it's gonna drive the same percentage lift as online to online, right. You would expect online to be a bit more, maybe even significantly more effective at driving an online sale, but even if it's three times less effective, But it represents six times more dollars give or take.[01:04:47] That's actually saying that offline is two times as important as online, right? I'm just doing some quick math there, but like there's a lot of leverage on that offline piece, even if it's a more subtle effect.[01:04:56] Ricardo Belmar: Just when you're looking at the volume of sales to begin with.[01:04:59] Well, Andrew, I wanna really thank you for coming back on the show. This is always enjoyable to talk to you about, one of my favorite topics with retail media, but honestly, it's always a pleasure to talk to you about any of these topics in retail with all the great insights that you bring from all the research that you're involved in.[01:05:15] So thanks again so much for, for coming back with us.[01:05:17] Andrew Lipsman: Thanks Ricardo. Thanks Casey.[01:05:19] Casey Golden: If any of our listeners wanna learn more from you and your research at insider intelligence, how should they reach out? How do they follow?[01:05:26] Andrew Lipsman: Yeah. So I am minimally on Twitter at alipsman. But the easier way is on LinkedIn. I think that's where a lot of the discussion happens and where I share most of my research. So, so come check me on LinkedIn.[01:05:37] Casey Golden: Thanks again for joining us.[01:05:39] Andrew Lipsman: My pleasure. Thanks.[01:05:41][01:05:44] Clubhouse Thank You[01:05:44] Ricardo Belmar: Before we close. We'd like to thank everyone who joined us on clubhouse to talk retail media networks and ask questions. So a special shout out to[01:05:52] Casey Golden: Cynthia Holland, always insightful CEO of Mavi.io, retail on the go. [01:05:57] Ricardo Belmar: thank you, Cynthia.[01:05:58] Casey Golden: So Ricardo, I think that's a wrap for our episode two[01:06:01] Ricardo Belmar: Yes, indeed. It is.[01:06:03] Show Close[01:06:03] 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 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. [01:06:31] 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.[01:06:47] Casey Golden: Thanks for joining us.[01:06:49] 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. 

Welcome back to The Retail Razor Show – It’s Season 2, Episode 1!Back for season two of the show, we saved a BIG topic to open up with – The Metaverse!Yes, our Retail Avengers team has been jumping out of their seats to bring you this discussion, recently held in our Clubhouse room, to answer the biggest, burning questions retailers and brands have about the Metaverse. What exactly IS the Metaverse? What is it not? Why should you be interested and what can you do with the metaverse? How can you use the Metaverse? Is it about building brand loyalty? Commerce? And what about NFTs and web3? All of the above? The Retail Avengers team digs into these questions, and more, to cut through the clutter!Hosts, Ricardo and Casey then come back to recap the discussion and talk about a few key examples of brands that seem to know what they're doing in the Metaverse right now. Plus, they’ll bring you an easy 5-step roadmap to getting started in the Metaverse. All that in the season 2 opener!Have you heard the news? We’re up to #20 on the Feedspot Top 60 Retail podcasts list, so please keep those 5-star reviews in Apple Podcasts coming! With your loyal help, we’ll move our way up the Top 20 in no time! Leave us a review and we’ll mention you in a future episode! https://blog.feedspot.com/retail_podcasts/Meet your hosts, helping you cut through the clutter in retail & retail tech:I’m Ricardo Belmar, a RETHINK Retail Top Retail Influencer for 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. And I’m Casey Golden, CEO of Luxlock. Obsessed with the customer relationship between the brand and the consumer. I've spent my career on the fashion and supply chain technology side of the business. Now I slay franken-stacks!Includes music provided by imunobeats.com, including E-Motive, and Overclocked, from the album Beat Hype, written by Hestron Mimms, published by Imuno.The Retail Razor ShowFollow us on Twitter: https://bit.ly/TwRRazorConnect with us on LinkedIn: https://bit.ly/LI-RRazorSubscribe on YouTube: https://bit.ly/RRShowYouTubeSubscribe on Apple Podcasts: https://bit.ly/RetailRazorShowRetail Razor Show Episode Page: https://bit.ly/RRShowPodHost → Ricardo Belmar,Follow on Twitter - https://bit.ly/twRBelmarConnect on LinkedIn - https://bit.ly/LIRBelmarRead my comments on RetailWire - https://bit.ly/RWRBelmarCo-host → Casey Golden,Follow on Twitter - https://bit.ly/twCaseyConnect on LinkedIn - https://bit.ly/LICaseyRead my comments on RetailWire - https://bit.ly/RWCaseyTRANSCRIPTS2E1 The Retail Avengers vs The Metaverse[00:00:00] Pre-Intro[00:00:00] Ricardo Belmar: Hey, Casey, it's season two. Now maybe we should do something different for the show intro.[00:00:04] Casey Golden: Yeah, I've seen some podcasts play different clips from the main interview in the beginning of the show, kind of like a preview.[00:00:11] Ricardo Belmar: I don't know. That kind of seems like it's been done to death doesn't it? [00:00:14] Casey Golden: True. We can always just pick up. In the middle of a conversation and give the audience some FOMO. They wouldn't know whether or not they've missed something or arrived right on time.[00:00:23] Ricardo Belmar: Hmm, not a bad idea though. I don't know. I wonder if we might get some bad reviews for trying to trick our listeners that way. What if we just added some cool sound effects?[00:00:31] Casey Golden: That would be too simple. What would happen afterwards?[00:00:34] Ricardo Belmar: Okay. I guess you got me there. All right. All right. So, we could just start talking about our main topic and give listeners a preview that way of what's to come without really giving away our speaker.[00:00:44] Casey Golden: Sounds like plan. I think that's what we should do, but how much time do we have to do that? A minute. 30 seconds, two minutes, 15.[00:00:54] Ricardo Belmar: well, uh, let's see, how long have we already been talking about it? I don't know. We might not have much time to talk about the m... [00:01:00] Show Intro[00:01:00][00:01:20] Introduction[00:01:20] Ricardo Belmar: Hello, and welcome to the first episode of season two of the retail razor show. I'm your host Ricardo Belmar.[00:01:26] Casey Golden: And I'm your cohost Casey Golden. Welcome retail razor show listeners to our unapologetically authentic retail podcast for product junkies, commerce technologists, and everybody else in retail and retail tech alike.[00:01:40] Ricardo Belmar: It's great to be back in front of the camera and on the mic.[00:01:43] Casey Golden: Yeah. And for those of you watching us on YouTube, how about that? , you're actually watching us on YouTube now, not just listening. This is a big step for us this season. And personally for me, I'm blow drying my hair again![00:01:58] Ricardo Belmar: totally, totally. And, for listeners or, or maybe I should say viewers, can expect to see us on video pretty much every episode now, apart from when we're bringing you our clubhouse sessions, because you know, obviously those are audio only.[00:02:11] Casey Golden: Well, Ricardo, this is our first season of the new season. So of course, we've got an amazing topic this week. One that have been asked about and asked for many times,[00:02:24] Ricardo Belmar: And one that our Retail Avengers crew had really been dying to cover for months and months.[00:02:30] Casey Golden: That's right. So with all of this anticipation, I am so bummed that I missed the clubhouse session.[00:02:37] Ricardo Belmar: Yeah. Especially since the topic is, wait for it, retail and the metaverse. I mean, this one was just about tailor made for you, Casey.[00:02:44] Casey Golden: Yeah. So I know I'll save my commentary for our recap discussion after the clubhouse session.[00:02:51] Ricardo Belmar: It'll be worth the wait. So with that lead in, since this is a topic that doesn't really need an introduction, let's just dive right in and listen, sorry, youTube viewers, view , well I guess still listen because it's clubhouse, to the Retail Avengers versus the Metaverse. [00:03:11] Clubhouse Session[00:03:11] Ricardo Belmar: All right. Welcome everyone to the retail razor room. We have a really amazing topic for discussion today. I know the entire group here has been just itching to, come back and talk about the metaverse. And so we've got five folks up here on stage. I am sure there'll be some folks from the audience that are gonna join us later.[00:03:30] And I know we have one more of our retail Avengers team. It's gonna join us a little bit later in the hour. So without further ado, we'll do some introductions. Jeff, why don't you go first? [00:03:39] Jeff Roster: Hi, Jeff Roster former Gartner retail analyst now cohost of This Week In Innovation podcast.[00:03:44] Ricardo Belmar: Thanks Jeff, Shish. [00:03:46] Shish Shridhar: Good afternoon. I'm Shish. I'm the global lead for retail with Microsoft for Startups. I've been in retail for over 20 years primarily focused on AI for retail and solutions around it. And currently just building out a portfolio of innovative startups. Thank you. [00:04:02] Ricardo Belmar: Thank you. Brandon [00:04:03] Brandon Rael: Brandon Rael, I've also been in and around the retail consumer industries over 20 years. And since our last discussion, I've joined Capgemini Invent team, they focus on innovation transformations and all the digital stuff we love to talk about here. So looking forward to this great conversation about the metaverse and all the potential.[00:04:19] Ricardo Belmar: And Trevor, [00:04:20] Trevor Sumner: Hey everybody. I'm Trevor Sumner. I'm the CEO at of perch. We do interactive digital displays at retail that use computer vision to detect which products you touch. So. We're basically instrumenting the clicks at retail, opening up new intelligence, data streams, and really cool shopping experiences for customers like Johnson and Johnson, joe Malone, Purina, Unilever, many others. [00:04:44] Ricardo Belmar: All right. Great. And I'm Ricardo Belmar. I started the retail razor club room here in, in clubhouse last year. Also running the retail razor show podcast with my co-host Casey golden. So everybody in the audience who hasn't subscribed yet, do yourself a favor, hit your podcast player and hit the subscribe button there.[00:05:01] You'll find some of our past clubhouse sessions showing up in each new episode of the podcast. I'm currently the lead partner marketing advisor at Microsoft for retail and consumer goods. And we are just gonna jump right into the metaverse here. So probably makes sense to start with a few good definitions.[00:05:18] I think everybody has a definition that it's kinda like that joke about economist s where if you ask 50 different people, what the metaverse is, you get 60 different answers, something like that. But I'll throw this one out, I think this is a Wikipedia definition that defines metaverse as a collective virtual shared space created by the convergence of virtually enhanced physical reality and physically persistent virtual space, including the sum of all virtual worlds, augmented reality and the internet. And it's also defined as a network of 3d virtual worlds focused on social connection.[00:05:51] So just to kick things off, what does everyone think of that rather complex definition.[00:05:56] Brandon Rael: It's a bit overwhelming. Isn't it? , [00:05:58] Ricardo Belmar: it's a mouthful for sure.[00:05:59] Shish Shridhar: it is! [00:06:03] Jeff Roster: I'm gonna have to go back to my Catholic school days and and diagram that sentence. Cause I think that's about run on over, run on, over run on, but I, I mean, it's, it's, it's fine. I mean, we're gonna have about a hundred different definitions before this thing really gets up and running. I think though, intuitively we kind of understand what it is.[00:06:19] Ricardo Belmar: Yeah, I think that's, that's a, a fair, fair statement. I mean, there's gonna be lots of definitions. I think some of the keywords, maybe I pick out from that, whether it was implied or not, is this notion of seamlessly moving between virtual and physical worlds.[00:06:32] There's the notion of leveraging augmented reality and virtual reality. That's certainly part of it and how you actually go about interacting with that space. There was that last part of the sentence. I, I like where it just throws in' and the internet' into that, because we didn't wanna leave that out.[00:06:48] but you know, you could view the internet as sort of a, a connecting glue perhaps of the, the metaverse. But I think one question I see gets asked by a lot of people at least one of the early questions is, well, are we talking about a single virtual reality world? Are we talking about multiple virtual reality worlds or is it the combination of all of them?[00:07:06] And just this idea that I can do things in this virtual digital space that has an impact in the physical world. [00:07:12] Trevor Sumner: Well, to me, there is not a, the metaverse, there is many metaverses and many different environments, and I'm watching people, contort themselves to define what this thing is.[00:07:26] And I think one of the, the greatest contortions was this notion that we're already in the metaverse right, that, you know 10 years ago we spent an hour on our phones and now we spend six hours on our phones. And we interact, if you look at kind of what our digital consumption, looking at TV and looking at other kind of digital formats that, that has gone up and that we are actually already kind of working in these metaverses now I don't know that that's helpful.[00:07:54] So the question is like, what is the definition that makes it helpful? [00:07:58] Brandon Rael: And I think to Trevor's point it's ever evolving, it's ever pivoting. We can't just say that's a single metaverse, it's multiple metaverse with different customer types and different generations. So it's hard to nail down what, you know, what exactly it is.[00:08:12] And I think what companies like Facebook or meta are doing, or like establishing a metaverse, but there's ones that already exist already that are they're in flight, you know? So it's, it's a very complex undertaken to single it to one, one single metaverse. [00:08:24] Trevor Sumner: Yeah. And, and I don't know that Microsoft is doing one metaverse either, right.[00:08:27] It could be blizzard is one metaverse that they're investing in as, as an environment. And then, another game world has another. And you know, HoloLens potentially, is a whole nother thing. [00:08:40] Ricardo Belmar: Yeah. I think you could say that you can divide this into different areas, right?[00:08:43] There might be a, a metaverse for a work environment that you encounter there's might be a metaverse for gaming. There might be a metaverse that you go to for shopping. There might be a metaverse. You go to for fitness exercises, right? [00:08:58] Shish Shridhar: Yep. And, and I kind of think [00:09:00] I I've been playing around with a few of these environments, including Microsoft's acquisition from 2018 prior to blizzard something called Altspace VR.[00:09:09] So Altspace VR is an environment where you can set up virtual meetings. You can have a mall in there. You can have shopping experiences, all of those. And I've also played around with decentraland where, companies like Coors and Miller Coors and, and others have been creating environments.[00:09:26] And then there is still other ones, the popular ones being sandbox and, and a few others where some of them mimic the real world, because there's that spatial element to the metaphors where you can buy digital, digital, you can buy land and build your malls and build your spaces. And all of those things pretty much like buying domain names in the internet.[00:09:47] And I think because there's so many of these environments, I think a point will come where you can kind of port between one and the other. I kind of believe there probably will never be a, sort of a, a single place. There will be competing environments always, but I think the tipping point will be where you can create an avatar of yourself and objects that you could kind of port from one environment to the other, make it available in multiple environments as well as in the physical world through AR. And I think that would be the, the convergence that, that we are all looking for, where you don't have to completely rebuild everything in, in all these different environments and brands that are today.[00:10:29] I think fairly confused about which one should be, be on, should we go to the sandbox. It should we go to, to decentral land or, or one or the other platforms. [00:10:40] Ricardo Belmar: Yeah, I think that is maybe the tricky part in these early days of almost competing metaverses . Or competing metaverse worlds maybe is a better way to further refine that statement.[00:10:52] And how do you decide which one to go to? I, one of the things I've noticed that I've kind of scratched from my head at a little bit is when we see some brands deciding that their, their first experiment here in the metaverse is gonna be to just replicate exactly what they have in physical space and assume that that's gonna cause people to just flock to their location.[00:11:09] Shish Shridhar: Yeah. I strongly feel about that. [00:11:11] Sorry, go ahead. [00:11:13] Authenticity, Storytelling, Experiential[00:11:13] Brandon Rael: Oh, I'm sorry. Sorry. Shish, I, I think it's, it's all about authenticity and storytelling and, and that's what we're looking for with the emergence of TikTok and Instagram, and you expect something magical and experiential and not, not replicating your day to day life and not replicating a storefront or a grocery store.[00:11:29] We look for something different, unique and authentic, and that's what we're hoping for in terms of inspirational content, out of the metaverse. [00:11:35] Shish Shridhar: Yeah, I kind of think it is, you know, it's an opportunity for brands and retailers really to rethink because in the past, in the 3d environments, you know, retailers have tried to recreate stores in 3d.[00:11:47] So you could go and do the normal shopping that you do in the physical world. You could do it in the 3d world. And that has never really worked. I think it's an opportunity to, to reinvent and to really say, how can we create experiential shopping? How do we make shopable experiences in the metaverse where we create an experience, which enables us to shop for the things that we want to in that experience, rather than recreating an actual store with shelves and exactly the way it looks like in, in the real world.[00:12:20] That is certainly one of the aspects for combining the real world and the digital world. But I think in addition, the opportunity really lies in, in creating that experience because this is all about experiential shopping and going beyond the webpage and, and making it more real. [00:12:37] Trevor Sumner: Yeah. I, I find that I find this conversation so interesting cuz it just it's so parallels the conversations we had 10, 12 years ago with regards to social media, like which sites do you pick and oh, you just can't put your same website on Facebook.[00:12:51] You've gotta do something different and what you do on Twitter or Snapchat or, or TikTok. Right. And additionally, you do need to be thoughtful about what you pick, especially in the early days, because one of the interesting economics here is that the early adopters tend to get the spoils.[00:13:08] Right? So you look at like Ashton Kucher right. He was an early adopter of Twitter. He took on CNN on a race to a million followers. And, those early adopters, get the, get the spoils. And so, you have to lean in and say, what am I doing here that's differentiated, that's actually valuable? Where's the cool factor that people wanna talk about. Cuz otherwise I think most people do like, oh, I'll just port my website. [00:13:37] Ricardo Belmar: And there's also I think an element of how do you retain attention? Right? So it's one thing to say, oh, I'm gonna jump into the metaverse I'm gonna create my virtual storefront.[00:13:45] And you'll probably get a lot of people that will come to see it just for the sheer novelty that first time. But you really need to be thinking about, what's gonna get people to come back the second time and the third and the fourth and the fifth. Another kind of extension to this point that you just brought up.[00:14:00] The early days of social media, I'm gonna go even further back to the early days of eCommerce and who remembers when there were discussions of people saying, you know, someone should build a virtual mall on the internet and get all the retailers to come and build their eCommerce sites in that virtual mall.[00:14:15] And we know how that story went. how that played out. [00:14:17] Trevor Sumner: Yeah. [00:14:17] And, I think I, yeah, I still see the echos of that in VR shopping. Which is analogous to this VR side of the house. And so I think the questions like who's actually doing interesting things versus doing analogous things.[00:14:31] it's interesting Chris Dixon , talks about this as kind of like business skew morphism, it's just like X for Y , and you're just trying to recreate the, the same thing in the new environment, but the really interesting businesses that have exponential growth create something completely new.[00:14:48] Trillion dollar opportunity[00:14:48] Ricardo Belmar: yeah. That that's true. That's true. And I'm, I'm, I'll throw out another interesting data point I saw. So JP Morgan claims that there's a trillion dollar market opportunity in the metaverse and I'm curious what everyone thinks of that data point. I'm sure Jeff has. [00:15:03] Jeff Roster: I'll go last. Yeah. [00:15:05] Brandon Rael: Hear that sign. [00:15:06] Ricardo Belmar: Our analyst has to have an opinion on that.[00:15:09] Jeff Roster: I'll [00:15:09] go last. [00:15:10] Brandon Rael: That's a very bold stand. I don't know what they're substantiating that on, but it it's a bold one and let's see what, what emerges, I mean, First, you have to actually capture the attention, capture the imagination, inspire generations with all this amazing content and, and find a way to retain them.[00:15:26] Like you mentioned to even make this a commercialized opportunity for retailers and brands to want actually spend money and spend time and engage and build communities. So it potentially could be at that level, but it's certainly gonna take a lot of effort, content creation and imagination [00:15:45] Shish Shridhar: I agree with what Brandon's saying and I think potentially yes, but I think there's a lot of things that need to happen before that. And you know, my experiments with the metaverse the, the graphics right now is a little clunky and performance is a little sluggish.[00:15:59] So from a technology perspective, I think we are not fully there. And then the other aspect of it, I think we are still waiting in a way for AR and AR glasses to be ubiquitous cheap enough and performant enough to be used where I think that will be another tipping point we are waiting for.[00:16:17] So there are certain things that need to happen before we go, headlong into, the metaverse. But I think there is a lot of opportunity in creating those digital experiences and marrying it with the physical world where in the physical world you could experience when you're shopping digital media, digital experiences through AR that was created in the metaverse.[00:16:41] So you could experience either in the virtual world or the physical world through AR. Then there's so many other experiences like clothing, trying on clothing and, and that next evolution of, of streaming commerce in a way where today the streaming commerce is I would say the beginning, but in the metaverse, it kind of goes into a completely new level where you're experiencing things you're trying on things, and you are engaging with store associates in the metaverse. I've been working with companies that are also experimenting with AI assistance companies like Soul Machines and Deep Brain that are creating these avatars, which are deep fakes of people, but powered by AI engines that are very personal and relevant.[00:17:26] So when you engage with someone, it could be a real human you're engaging with, or an AI assistant that you're engaging with that is been trained with your data and is becoming very personal as a result. And so those are the kind of experiences I think are gonna evolve . And also, the evolution of streaming commerce is gonna be the other aspect of it. And the ability to actually create all the digital objects like furniture and all those things. Being able to create a digital twin of your home in the metaverse, furnish that home with digital goods that you buy, and then recreate that in the real world through commerce engines.[00:18:04] And I think the headless commerce engines will play a big part in, in the metaverse where you can buy things, things that you see. So it not necessarily in a store environment, but really making that experience shoppable through, through the commerce engines. [00:18:20] Trevor Sumner: So I'm gonna go and say yes to trillion dollars just, you know, without any qualifications, although obviously it depends on how you define this phase.[00:18:29] Jeff Roster: Well, neither did the writer of the article, so no one needs qualifications, apparently. [00:18:33] Trevor Sumner: Totally. And, and, and, oh, actually that's a little bit of my point, which, which is where I'm going with this, which is, you know, look, you, you could back into it and say, the real estate market for the metaverse is at 500 million and supposed to double this year.[00:18:46] So just the real estate market of the metaverse is a billion dollar market. And that's core metaverse, that's not like messing around and, deciding to like, I'm not picking on Shish here, but like social shopping. I, I don't count that as metaverse, but when it gets to that next stage, as Shish was talking about of being in the metaverse and, and going to the next level, it is, but without playing lines, like they're billion dollar markets and it's so early with like, who's been in decentral land?[00:19:11] Who's been in the sandbox, very few of us, right? Now at the same time. The question is, if you look at usage, it's younger people it's gen Z and like specifically, like take a look at the data in South Korea, it's astounding, they're spending more money on virtual goods for their avatars than actual physical apparel for themselves.[00:19:30] That is crazy. Right. I think, yeah. If, if you look at that trillion dollars? Sure. Trillion dollars I'm in, [00:19:38] Brandon Rael: I think to that point, the, the luxury sector we're seeing all these major companies are now investing in the metaverse space. They're betting big on it. So Gucci and other major global corporations are an investment in space because it, their brand has such value in it.[00:19:52] And they're exclusively extends to the metaverse. So if you can capture that audience and capture that imagination to, to where we had the right clothing to have the right accessories for your avatar, then it could be a, a winning proposition. I mean, it could be limitless, to be honest. [00:20:05] Ricardo Belmar: Yeah. I mean, if you just look at virtual goods and games, I think that's a hundred billion dollar market right there.[00:20:11] So if we're gonna include that then to Trevor's point, you can make this work, right. You can add your way up to a trillion dollars if you keep including these different things. And if you roll in you know, brand to your point with luxury brands, any NFTs that they're starting to release, and I'm, I'm jumping again a little bit to, to that part of the discussion, but you know, you roll that component into your, into the math here.[00:20:30] You can see yourself getting to a trillion dollars. If you just keep adding more and more components to it. [00:20:34] Trevor Sumner: And then the last, last point I wanted to make that that, that we hit to at earlier is I also don't believe anything that these guys say, right? Like it's JP Morgan chase. He like he's writing.[00:20:43] Jeff Roster: There you go. [00:20:44] Ricardo Belmar: I think you just told Jeff's comment. [00:20:46] Jeff Roster: Yeah. Thank you. You just stepped on my line [00:20:48] Trevor Sumner: as analysts you wanna predict things just so that you get clicks. I remember in 2001,[00:20:53] Jeff Roster: no, you don't. Analysts analysts want to make intelligent points. Hack writers wanna do that. So real analysts don't wanna do that.[00:21:02] Trevor Sumner: I like, I, I don't know. I think analysts wanna get attention too, cuz they wanna sell the research. I remember in 2001 Forrester predict, well, they're not, especially when you predicted out six to 10 years and there's no consequence, right? In 2001, I was at a wireless center company and Forrester was predicting mobile internet traffic would outpace, internet traffic in five years.[00:21:24] It took,[00:21:24] Ricardo Belmar: I remember that [00:21:25] Trevor Sumner: 15 and it's just like, it just wasn't even in five years it was nothing. It was less, it was less than 5%. [00:21:31] Brandon Rael: Well, they had the form factor, the iPhone wasn't invented in time for that [00:21:35] Trevor Sumner: well, the analyst should have known that. So my, my point is JP Morgan chase missed the boat on cryptocurrency. So they wanna throw out a big number and they did. [00:21:43] Ricardo Belmar: Yep. Jeff, you wanna add anything to that? [00:21:45] Jeff Roster: Yeah, I mean, just, I just hate these articles because one I think Trevor's really a hundred percent correct. It's it's just, you're throwing out to put out a, interesting number it's click bait to a certain degree.[00:21:55] I'd have to look at the methodology. Are we talking about IT spend to build the metaverse? Are we talking about revenue moving through the metaverse? Just, I, I don't see them. I don't see these articles being helpful as somebody that tries to understand how to forecast things. It just. It's silly.[00:22:07] I think it's a big number. I haven't actually put the numbers together. I, I don't see a reason to do that, but it they're big and they're huge and they're gonna grow. Yeah. And that's that that's all I need to do is, is somebody that comments on the space, but is it 1,000,000,000,002, Ricardo, what was the largest number we saw?[00:22:22] Cause we were kibitzing about that a while ago. I [00:22:24] mean, it was, I don't know how many was there? [00:22:26] Ricardo Belmar: Was there someone else that said it was more than a trillion? I, I can't remember now. [00:22:29] Jeff Roster: Oh yeah. [00:22:29] Ricardo Belmar: This is the one that stood out to me most recently. [00:22:31] Jeff Roster: Cause there's, there's an art and science to the game of forecasting.[00:22:34] There should be a methodology you should be publishing that you should be talking about what you're talking about. You should talk about definitions and none of that work has really been done that I've seen evidence by the, the conversation we had to start with, you know, sort, sort of wrestling around with what a definition is.[00:22:48] Ricardo Belmar: Right. [00:22:48] Jeff Roster: So to, you know, do these clickbait articles just it's just frustrating. [00:22:52] Brandon Rael: It's a coupling with the per Jeff's point. If you're adding in live events and advertising and keep expanding a definition of, of metaverse, it could be 800 billion to a trillion, but it's just a loose definition of it. You know, I understand gaming Roblox, et cetera.[00:23:06] And those, those , newer, authentic spaces that we're talking about. But if you're adding all those availments in there, it will get expanded.[00:23:12] Ricardo Belmar: Yep. That's a fair point. I see we've got some raised hands and Ananda, I just invited you up onto the stage. If you have a comment or a question for us.[00:23:20] No, Really, What IS the Metaverse?[00:23:20] Ananda Chakravarty: How's it going? [00:23:21] Ricardo Belmar: Hey, Ananda, how are you? [00:23:22] Ananda Chakravarty: I'm thanks for inviting me, Ricardo. I do have a couple of questions. I honestly, I'm, I'm kind of new at this whole metaverse concept. I'm you know, you guys have given me some explanations, but I think your first comment when you brought in that very ambiguous definition of metaverse really still gave me a lot of pause as to what we're really counting when we're talking about all these dollars, trillions of dollars that are potentially coming in from many different sources into a either a channel, a, a throughway, whatever you wanna call it.[00:23:52] Aren't these just dollars that are going into variations of the internet, or maybe even variations of social commerce. I'm just wondering what really defines the metaverse right now. And what, what is the real, I guess conceptually, what is it supposed to really be? Is it like that second life?[00:24:09] The only places I've seen the metaverse in real you know, from a realistic point of view has been in the gaming universe. You go to a Minecraft Mojang location. You can find tons of people playing, engaging, and effectively having their avatars in the universe. Right. But I've not seen that from a retail perspective.[00:24:26] I've not seen that from almost any other kind of context. Maybe Shish you have some, you had some thoughts of some examples that you shared, but I'd like to get a better definition of what it really means to be a metaverse and what that is from an overall perspective. [00:24:40] Ricardo Belmar: Well, I'll jump in on, on a couple thoughts there and then maybe Shish, I think you might have some things to add. I mean, for me, there has to be an element of this, you know, virtual world that is representing something in the digital space that you're interacting with. So whether we call that, a virtual world, you access through VR glasses or something like that, it, I think is sort of a secondary point.[00:25:00] I think you're right, that in the gaming space is probably where it's leading in this area. If my kids are an indication, then things like Roblox, is sort of an early version of, of what can happen in the metaverse. Although I'll, as a side note, make a point that I just read an article today about how Roblox, since they IPOed, I think their about their stock has dropped about 50%. So I don't know if that's sending a message or not, but I think gaming is definitely an area that maybe leads the way here.[00:25:23] I have seen some good examples of what I alluded to early on in the session about the metaverse at work, where companies would use a virtual space, for example, to facilitate onboarding new employees. So in a remote work era when you don't necessarily bring all of your new hires into a common physical location, you could bring them into that virtual space and have them interact with other employees and go through training exercises and such there.[00:25:48] I think there's definitely a use case there. And then I've seen in the manufacturing side and, and production environments. If you're building a product and you need to either do maintenance on something, or you're trying to figure out how things are connected in a assembly line. You know, there there's some value in using an augmented reality experience there, which I would, again, still label as part of a metaverse that allows you to virtually manipulate some of the physical items that you're working with in a way that might help you understand how you need to manipulate them in the physical space.[00:26:19] So it's the idea that Shish mentioned earlier about digital twins. I think that's an early use case that makes a lot of sense for metaverse applications. I think what we're all kind of getting to, and I'm curious, everybody else here will think about this comment, that when we start looking at the commerce application of it, which is really what, what retailers care about, what consumers might care about, where are those use cases coming from? And I'm gonna let everybody comment, but I think the next thing we should probably get to, because I think it's related, you know, we often hear the term metaverse not too many sentences removed from terms like web 3.0 and NFTs. And I think there's a reason for that association when it comes to evaluating the commerce implications, but I'm gonna leave that comment there for us to come back to and see what everybody else here has to has to say in response to Ananda's comment.[00:27:06] Jeff Roster: Well, so I love that. And you can tell Ananda was a analyst. Cause if you draw the circle big enough, you mean you could, you could drag everything into it. But I think what I would say is in that's just now, since I've spent so long talking to some of the folks that are building these pieces of metaverses. There's technology that that's at play right now.[00:27:23] If you look at some of the interviews I did Obsess is doing 3d objects and that will clearly be a key capability in a metaverse world. And that's available on websites today. AR I think, you know, certainly not here, but far more interesting to me than, than VR is because I can, you know, being a pilot I'm used to having a lot of data feeds come in and I want to be able to walk through a store and look for nutritional information the way I do when I'm flying. So there's big chunks that were in the very, very early stages of a buildout, which is why I hate those articles that say it's a two or 3 trillion or $1 trillion market, because we're the early stages of this build out.[00:27:56] I think Roblox is, is their market cap is phenomenal and that's a component of it. So there's, there's pieces that are there and there's, speculation and everyone wants to get their, you know, get their clicks in. But there's a lot of real true value that I'm seeing already in pieces.[00:28:11] Trevor Sumner: So can we shift the conversation about who's doing really cool stuff in, in the metaverse and like start defining the problem space less by abstract lines that and define a little bit more about like real world stuff that people can do in the metaverse things that are interesting or even successful at this point.[00:28:28] Ananda Chakravarty: Would love to hear that Trevor. I mean, just, you know, when I think of metaverse, I'm thinking second life I'm thinking we had islands and all sorts of cool, neat stuff there with big huge I guess advertising, if you will a huge banner for IBM in, in a, you know, a corner of this quote world.[00:28:45] But what did it really translate into in terms of dollars in terms of value in terms of productivity for the, the world? I mean, that's the question at the end of the day. [00:28:54] Where physical and virtual converge[00:28:54] Shish Shridhar: And I kind of think the, the second world and the virtual worlds that's been done in the past is sort of just leading up to where we are now, the metaverse, which is the convergence of physical worlds and virtual worlds and, and really having a multidimensional interface to, to that environment. So people can join into a metaverse right from the physical world, could be shopping in an area or in a physical space and become and interact with people in the virtual space and the other way around. And I think that convergence of real world and virtual world is one of the, I would say the bigger differentiators in addition to you also mentioned, you know, the ability to, to monetize engagements, to be able to create things in the metaverse and experience those things by those things in the physical world, as well as the, the virtual world.[00:29:44] And I think that's the other aspect, which second life didn't really have. It didn't really have that convergence of real world and, and physical world and the, the ability to experience it, you know, no matter what, where you are. And I think that's really the, one of the differentiators anyway. [00:30:00] Trevor Sumner: Yeah, I, I would agree with that.[00:30:01] And so let's talk about what, what some of that looks like. Right? So stock X, for example launch an NFT where you'd get a, a physical product as well as your virtual product. And so, you'd get your Nike air Jordan's and you get a virtual version as well. Now, that's kind of a cool way to think about, collectibles, the challenge came several weeks later when Nike sued them and said, whoa, you're violating our trademarks by selling a virtual Nike item. And right, so like this, some stuff that needs to be worked out there are other people who are treating this physical purchase as also this digital representation patron, you could buy a bottle patron, they get like a special, you know, commemorative patron, icebox, I think they called it. And you get also a physical bottle that's, a limited addition, et cetera. [00:30:47] So I, I think of it almost as like a lot of this as a membership club and NFTs as like a deed to something. And in this case, like either a loyalty club or a membership club that gives you access to the physical world.[00:30:58] I think when you, you start, if you think about loyalty as like points, if, if the points in your metaverse as a game. Start giving you access to the real world. If your interaction in the metaverse with Chanel gets you to the new Chanel fashion show or the, the new, line that comes out and you get to, to go to the store or some V I P this starts becoming really, really compelling.[00:31:24] And it's a way for brands to create engagement with their brands across all different properties and convert to real world commerce and, and virtual commerce too. And, and I think that's exciting. [00:31:35] Brandon Rael: Yeah. And, and add to all that we talked about luxury being the, the ultimate sandbox for, for the metaverse it's, it's already happening.[00:31:42] Gucci's has sold a digital the honest purse, but thousands more than it's worth in real life. So versus a physical product. Dulce Gabbana, sold a a 5.7 million nine piece NFT collection. Saying that their gems can't be found in real life, on earth and in the digital world, metaverse, world's more, more exclusive and more prestigious.[00:32:01] And then Nike lands on the Roblox platform. And they also acquired the virtual sneaker and collectables company or a star company called RT FK T studios. So Nike has been one of the leaders and luxury space has been on fire. [00:32:13] Trevor Sumner: Let let's talk about Nike land for a second.[00:32:15] I think that's a great example. Right? So how are retailers using it? So Nike land, you can buy shoes that don't exist in the real world. Well, okay. Who cares? Well, they can look at the popularity and say, oh, people really like this shoe. We're gonna use it as kind of data demand data to determine which products that they are going to create.[00:32:37] So they may launch a hundred virtual shoes. Just take their top 10% performers and actually create real versions of those shoes. If you think about that as part of your marketing funnel, as your brand engagement funnel that's pretty exciting. And then you can start thinking about, well, if you bought that shoe and we end up making it, you get 20% off or you get it engraved or you get, the special version of it with, you know, who knows, you know, like, [00:33:03] Ricardo Belmar: yeah, there there's like a loyalty implication that goes along with that, right.[00:33:06] Loyalty, a hundred that makes it much more appealing in, in both spaces, right? Digital [00:33:11] Trevor Sumner: Totally. And if, because of all of these benefits, you spend time in Nike land and you spend hours and hours interacting with Nikes, Nikes, Nikes, Nikes, Nikes. What are you gonna do in the real world?[00:33:22] Ricardo Belmar: You need buy more Nike. [00:33:23] Trevor Sumner: Right. You're gonna buy more. Nike, you're gonna talk about Nike. You're gonna wear more Nike. You're gonna talk about how the Nikes you're wearing matches your avatar in Fortnite and allows you to jump 20% higher. [00:33:35] Ricardo Belmar: You're gonna post pictures on Instagram. [00:33:36] Ananda Chakravarty: Trevor, have a strange feeling.[00:33:38] You actually own a pair of Nikes, just a guess [00:33:42] Brandon Rael: strong feel. [00:33:42] Trevor Sumner: Okay. All right. So just virtual ones, one, I, I do own Nikes. I'm sure. Somewhere in my collection, but they're, they're, they're not my basketball show choice. And I'm not actually all that loyal to Nike as a brand. It turns out, but I think what they're doing here is really.[00:33:56] Ananda Chakravarty: Yeah, I kind of like that example, but because that's the closest I've gotten from what I've seen out there and Jeff kind of hit on the, a couple of points on this as well, by the way. And that is when we start thinking about these different pieces that are, that are coming together, are they really big enough to be mainstream, right?[00:34:13] I mean, that's what metaverse, and this whole thing that meta itself and Facebook is trying to push is that this is really a mainstream function. That's, that's gonna be, you know kind of a, a, a combination of what's gonna happen in movies, like ready player one and and The other one, right?[00:34:28] I mean, that's, what's eventually going to be the world, as we know it, if you will, the physical and the blurring of, of this digital avatar state, I just don't know how much reality there is to that. If these are very, you know, focused on these very specialized cases, it has to be something that is really very popular before it becomes anything close to mainstream.[00:34:48] And I don't think we're close to that at this time. [00:34:50] Ricardo Belmar: it's definitely early. [00:34:51] Trevor Sumner: So the, yes, but you know, you're talking about concerts in the metaverse being attended by tens of millions of people. Like that's pretty size. I mean, like, I don't know what you talk about scale, but like that's, that's the biggest concert in the world.[00:35:05] Ricardo Belmar: It depends on the category. Right. And you know, we started out this, with the Nike example, talking about an apparel example, and, I could argue, for example, apparel overall, I think is actually in some ways could be defined as a shrinking market, right? Because what the same amount of money that used to take for you to buy apparel 20 years ago, you can buy a lot more now, putting the side, whether it's a luxury brand or an off price brand, you can get more for your money in apparel, which means that individual apparel brands, they've gotta find other ways to diversify a bit and find new sources to get revenue from what potentially is a shrinking share. So one area where they can do that of course, is in this metaverse digital space. You know, another example of thrown an addition to Nike, Ralph Lauren, right? Ralph Lauren created a space in Roblox and they've, they're selling digital Ralph Lauren collection to Roblox gamers.[00:35:51] So is, is that a significant revenue source for them? I'm not sure that it is now, but I think, from an experimenting point of view, it's a great idea to try it. I think that's where we'll see lots of interest from retailers is just trying different things. This is one of those areas where there's gonna have to be a lot of experimentation now, long term, is that a significant amount of revenue?[00:36:11] And I think it could be cuz Trevor to your point, if millions of people start getting interested, that's a potentially, much larger audience than you get from a physical space. [00:36:20] Trevor Sumner: Right. And, and also, do we measure this as marketing dollars? Right. Right. I got 10 million people to look at this thing.[00:36:27] Like they didn't buy the thing, but did that translate to some [00:36:30] Ricardo Belmar: yeah. What did it do to our brand awareness [00:36:32] Trevor Sumner: brand awareness and eventual sales, right, [00:36:34] Ricardo Belmar: exactly. Yes. It's one more touch point to track in that customer journey. [00:36:38] Trevor Sumner: Right. And, and so, there's a company called pretty little things that created a digital only model that they're now using in their advertising, right? Like what if we start thinking about, the ability to leverage metaverse in all other types of digital content channels and then to the point of, Hey, let's not do the analogous thing. Like, oh, I wonder what a werewolf would look like in Gucci.[00:37:01] Like how do you start doing stuff that's more creative and interesting and, and goes across all of that. And what's the value of that from a marketing return on investment. [00:37:09] Shish Shridhar: I think the, idea that Trevor kind of pointed out about new idea validation is a very powerful one for brands. So really testing out the digital products, the popularity of the digital products before going into production in the real world, and this could apply to apparel shoes, it could apply to furniture, furnishing the digital twin of your home with, with furniture and then getting, a sense of, is this a good design enough before actually going into the real world and potentially maybe car designs, all of those kind of things.[00:37:38] I think it's got a huge potential. [00:37:40] Ananda Chakravarty: I know Michael. Hasn't had a chance to talk, but he's on the stage. So maybe [00:37:43] Ricardo Belmar: welcome, michael . [00:37:45] Michael Zakkour: Hey guys, [00:37:46] Brandon Rael: rockstar. Michael, [00:37:47] Ricardo Belmar: how are you? [00:37:48] Michael Zakkour: So many loved and familiar faces. [00:37:51] The foundation is only a beginning for retail[00:37:51] Michael Zakkour: Okay. Just a couple things I think that need to be cleared up. There's a lot of confusion, nevermind with the average person and consumer within our industry, whether it's retail technology, development, whatever between the metaverse, web three, NFT, and blockchain.[00:38:08] And we've been talking clearly about the metaverse, but there's some underlying foundational with web three NFT, blockchain, and how it relates to retail. The first thing I wanna say is they're not the same thing. The thing that we see most often, or I see most often out in the marketplace is people confusing web three and metaverse meaning sort of the same thing.[00:38:32] They're not. The second thing I'd wanna say is there is no metaverse yet. It doesn't exist. Okay. And if you run into a company Zuckerberg who tells you they're building the metaverse runaway quickly, if you run into anybody who has a complete answer that says, I know what the metaverse is and will be run away.[00:38:57] right. It's just not possible at this point. We are with metaverse web three NFT and blockchain integration, basically where internet technologies and eCommerce were in 1997. Right. We're at the very, very early stages of it. What I can tell you is you do need to think about where the metaverse web three NFT and blockchain exist as separate entities and how they integrate to eventually come to occlusion on something that is something we can call a metaverse or a multiple of a metaverse.[00:39:35] Okay. As it relates to retail one of the most surprising and, and happiest things I've seen is that, you know, six years ago, I was still arguing with all of my luxury clients about whether they should even recognize that something called the internet exists. And a lot of these luxury companies have gone all in and are the leading edge on developing metaverse based web three NFT, blockchain offering. So interesting there.[00:40:05] And so this is really guys on the retail front. I can't emphasize this enough. Retail is the leading edge of what will become the metaverse. I can't define for you what it is right now, but we are building it. So I think, I don't know if it was Ananda,[00:40:22] it might have been Ananda who asked, are there some real life examples of where this is going? We can look at the Gucci platform. We can look at what LVMH is doing with digital avatars, but all of this is it's something beyond an add-on to the internet. As we know it, it's a complete redefinition of how we experience, right.[00:40:44] And you guys have heard me talk about ecosystems and the new retail model being the complete integration of online, offline technology, supply chain, entertainment, and media. This is the next step above it. How do you bring that to life in 3d? Whether it's use of devices or not. It doesn't matter, guys. We don't know what the metaverse is yet.[00:41:08] Ricardo Belmar: Yeah. That's an interesting point. Certainly in the early phases of any new technological area, right though, that early phase, there's the novelty of it being new. That gets attention.[00:41:17] You can spend through any number of, of marketing outlets to drive traffic the first time. The real question is how do you keep them coming back. And I think there's a, a component there, you know, we've only touched or I realize we're coming up on the hour, so I'm gonna bring us to a closing point here.[00:41:31] With one last comment I'll throw out and you guys did a good job bringing this up and differentiating between web three NFTs and, and the metaverse. But it's the combination of these things, right? It's the combination of how brands are going to drive the usage of these elements to make that experience worth repeating and worth experiencing over and over and over again for those consumers.[00:41:52] And I think that's, what's going to be the, the key experiment area. We see happening at least over the next year. And in these, I'm gonna keep calling it the early phases. It may be here, but I think Michael, the way you put it was very nice that, you know, whatever it is, it's not well defined yet. And that's probably why we all struggled at the beginning of this hour to come up with a good definition that wasn't as clunky as the one that I read off from Wikipedia.[00:42:16] And that's because it really is still something that has to be figured out by everyone who's going to not just dip their toes in, but dive in and build something.[00:42:25] Especially when you have, what I would describe as the convergence of a number of different technologies that are making this possible at the same time that I guess opens the door for a lot of less interesting ,let's say, solutions and capabilities, but, we're essentially bringing together, I'm just gonna list out all the things that we've mentioned, there's blockchain, low code, VR, AR of course the internet, which was just thrown in, I love how that was thrown in that Wikipedia definition at the very end of the run on sentence.[00:42:50] And that's just to start right. There are a number of other technical capabilities and technologies, and all of these had to converge to get us to the point where we can start to build this out. So I think it's exciting to see where it's gonna go. It's exciting to see what retailers and brands are going to come up with.[00:43:03] And that's why we like to keep this discussion forum going. Cuz it gives us a way to, to speak to different things with our collection of speakers, everybody's got a different viewpoint, a different focus area that they've read about and we've all consumed different types of content and different pieces of articles and such.[00:43:20] So when we all get together and cover one topic, we can all bring a different angle to it. [00:43:24] And I think with that note, we're gonna wrap things up in the room today. The the fact is , this topic is so rich and so involved that we, we could have had just a short bullet point list of 10 other things to talk about and probably fill another 10 hours of this.[00:43:38] So I'm sure we will be scheduling more metaverse discussions in the future . And with that, I'm gonna thank everyone for joining us in the audience and thank our folks who came up here for some questions and all the other speakers, and we will close out the room from there. Thanks everybody. [00:43:54] Metaverse Recap[00:43:54] Ricardo Belmar: Welcome back retail, razor show listeners and viewers. We hope you enjoyed that Retail Avenger's clubhouse session on the metaverse.[00:44:07] Casey Golden: It was a great session. I love the focus on what the metaverse is and what it's not. And honestly, you guys just killed me with the debate on this trillion dollar opportunity. This is gonna, you know, grab your popcorn. Like this is gonna be fun.[00:44:21] Ricardo Belmar: Yeah, that really got everybody jumping on that one. A good, good discussion on a few retail examples too, like Nike for one, I mean, what, what do you think about what Nike's doing, Casey?[00:44:30] Casey Golden: It was really smart for them to just acquire artifact. really early. And throw legal to round up and protect their brand. They're filing new trademarks and sending out cease and desist to companies trying to make money off their swoosh. And I think that this is something that a lot of brands are doing right now is getting ready, getting prepared and protecting their brand.[00:44:53] And they're gonna have to do that. Nike land, their Roblox micro metaverse has already attracted like over 7 million people in 224 countries. Like this is not a bad start. This, this space has such low expectations on the design side.[00:45:12] just play[00:45:13] Ricardo Belmar: Right. Yeah.[00:45:14] Casey Golden: it. Doesn't have to be perfect.[00:45:17] Ricardo Belmar: Yeah, I have to agree. Have to agree with that one that that's so true and, and pretty impressive, that they've got so many people attracted to it at these early stages. So, one of the topics I do think we covered a bit, but honestly we could do another entire show on it. Is this idea of digital twins.[00:45:33] Shish brought it up first. I think we touched on it with Nike specifically, and then Trevor highlighted it a bit more for me, the idea of brands using these digital twins to test new products, see what's popular, then use that knowledge and insight and to decide what products and features they wanna drive to scale maybe for a big product launch.[00:45:53] And I think that's a massive use case. It certainly shortens the time to market. In that whole process. So I, I have to believe we're gonna see more and more of that. And I suppose it's kind of right up your alley. Isn't it. Casey.[00:46:03] Casey Golden: Yes, but I mean, the conversations I'm having is, defining a digital twin it's it's, it's turning into an omnichannel debate of like, what is a digital twin? And I've seen brands using digital twining as an opportunity to pre-sell the physical item include an avatar wearable file. So that they are digital twin to their avatar providing a gift with purchase for like a flex on the item, by sharing that an NFT with an, an artistic version or a very photo realistic version of the item kind of with that proof of purchase and authenticity.[00:46:45] And then just to test a new product into the crypto community, right. This web three and crypto community is a different consumer group. They may have had this consumer group already serviced in their stores or online, but they didn't know that trait necessarily. They didn't know that the, that consumer is also part of a different community, then what they might be familiar with or the way that they would've seen their communities in general.[00:47:13] So there's a lot of different digital twins that are out in the market. And I think we really need to understand what is a use case for these digital twins and what do they do because it's consumer facing. And so just like omnichannel, this is gonna get very confusing.[00:47:31] If we can't decide what a digital twin is, and maybe there's a wearable twin or a meta twin, or I don't know, we need to start coming together and using words that mean something[00:47:45] Ricardo Belmar: Be before we have another Omni channel.[00:47:47] Casey Golden: before we have another Omni channel[00:47:51] Ricardo Belmar: You have to agree with that. And you bring up a, a good point too there about the, community building aspect of all of this, especially when you start to tie in web three and NFTs and in the metaverse, which admittedly, we, we didn't have a lot of time to get into that in the clubhouse session. I'm sure there'll be some future sessions for that kind of discussion.[00:48:10] But I, with, with all these kinds of examples, would you say apparel and luxury brands are kind of taking over the early metaverse right now? Are they really the early adopters? I mean, who would you say is missing out right now? That should be jumping in.[00:48:22] Casey Golden: Luxury is leading technology. Like I just said that luxury is leading [00:48:27] Ricardo Belmar: out there now. [00:48:28] Casey Golden: Is out there and I am so, like, I just got goosebumps. Like I am so proud of the luxury industry adopting tech. And being on board this innovation train, it makes so much sense for the luxury space because the crypto and web three, the crypto space is literally the NFT space was built off of rarity, exclusivity, and these are all the values that are shared, you know, VIP's, this is something that luxury space can really get behind because they have the same core values, unlike a self serve model or a Facebook advertising model. It's very hard for them to get on board because the core values at the end of the day are so separate.[00:49:12] So that's why I believe there is a future over here. Luxury's going to figure it out. I don't know what that means at gap, but, Balenciaga is doing a really great job. Gucci's killing it and they're building it into their business. And I think that it's wonderful. They are early adopters. And at the end of the day, we're in the business of selling products, selling physical products.[00:49:37] I haven't spoken to a single brand that has been excited about selling a digital good. they're like, so if I make this 3d asset or this digital good, or this NFT, like how much product can I move?[00:49:50] Ricardo Belmar: Right. Yeah. How does that help me sell the physical products I'm sell.[00:49:55] Casey Golden: They want to sell physical goods. Even though like, it could be a lot cheaper to sell digital goods. We are going to be figuring out what these digital twins are and how they're going to facilitate these real life purchases. And that's essentially how it's going to be defined, but the brands see I'm finding, they just wanna sell more product.[00:50:15] Ricardo Belmar: right. [00:50:15] I mean, at the end of the day, the digital goods they might sell, it's like in the, all the video game, virtual worlds where you see all of these digital assets sold, it's, it's real money. It's, meaningful money, but compared to what these luxury brands are selling and, and generating in sales, in physical goods, it's an incremental revenue at most. It's not gonna replace the physical goods revenue, but it helps motivate more physical sales.[00:50:40] Casey Golden: oh my goodness. I just have to share this there is narrative out here right now. That that there are companies that are creating digital clothing saying that this is the most sustainable way to shop, and this is how we're going to save the world. I'm like, I'm sorry, but what are we wearing me buying a digital t-shirt.[00:51:02] How is that[00:51:03] Ricardo Belmar: help you in the real[00:51:04] Casey Golden: shopping? [00:51:07] Ricardo Belmar: How are you, how are you, wearing that digital t-shirt Casey[00:51:10] Casey Golden: Right. Like, I'm sorry, but that's not going to work. I still need to go buy physical clothes, but just the narrative twist on this, that this is the most sustainable way to shop, and [00:51:20] Ricardo Belmar: That's one way to look at[00:51:21] Casey Golden: these resources.[00:51:22] Ricardo Belmar: That's one way to look at it.[00:51:24] Casey Golden: I just couldn't, I just couldn't.[00:51:26] I had to, just leave for a moment and I'm like, yeah, I don't even know how to have a conversation with this person right now, because , they do not believe that anybody should be physically manufacturing clothes. I'm like, this is kinda impossible here.[00:51:41] Ricardo Belmar: That's gonna go far in the, in the industry for sure.[00:51:43] Casey Golden: Yeah. I just like, okay, I'm confused, but okay. Continue.[00:51:49] So one thing that, that came up in the clubhouse discussion that is worth more attention is this idea of multiple metaverses. What'd you get, let's just keep confusing the consumer, but you have some thoughts on this and I'd love to hear them.[00:52:05] Ricardo Belmar: Oh[00:52:05] Casey Golden: like, let's dive.[00:52:06] Ricardo Belmar: I let let's dive into this one. We didn't go too deep, deep into it, but yeah, I, I think there's at least, fundamentally three kinds of metaverses and yeah, it'll probably confuse consumers, but hopefully we'll we'll get through that.[00:52:17] Cuz I think much like omnichannel, consumers don't care about the terms or the words they just care about what are they doing with it? So, I think of these three groups, first being industrial and a big part of that is this whole discussion we just had on digital twins.[00:52:31] There's factory modeling and automation. There are a lot of consumer goods brands taking advantage of this, where they're modeling their entire production lines. It's helping them get better visibility into their operations. They can use historical sensor data. You see a lot of this being coupled with iOT technology. So that as that manufacturer, they learn over time. They look at the data over the history of their manufacturing process and they figure out how to make it better, how to operationalize new changes without having to physically do them at the factory so they can see what the impact is.[00:53:04] And that leads to a more efficient, lower cost production, so this one's all about simulating and then automating in the real world based on what you learned in that metaverse model. And you can think about things beyond retail, right? And you and I have talked about medical applications, there's telehealth, where this makes sense training for healthcare providers.[00:53:23] You can see how pharma companies might use this in their research work for designing new life saving drugs. And, you know, and then plus, we're already seeing healthcare converging with retail. So this is an area we could see some interesting things that none of us have thought of yet start to come up.[00:53:37] So that's industrial metaverse then, then I think of the workplace metaverse and this one's kind of interesting. So with all the work from home that everyone's been experiencing in the last few years, Accenture is an example that comes to my mind. They actually built a version of their headquarters, in a metaverse and they started doing their new hire onboarding in that metaverse space.[00:53:57] So rather than, giving you a whole bunch of PDF follows or emailing you a ton of material as a new employee, you actually join the office workplace. Metaverse. Meet other avatars of other new hires and other employees. And you can actually move around this place. You can manipulate, 3d models of what the office looks like.[00:54:16] You might have a 3d whiteboard space in there so that what you would've done in a conference room with a 2d whiteboard you're doing in this workplace metaverse and then after you've been onboarded , you start holding meetings in this virtual space and it starts to look like the sci-fi movies we see when people are waving their hands in the air, manipulating things on a holographic screen, and you can do that in the metaverse right with the right technology and the right tools that you can't do that on a 2d whiteboard.[00:54:41] This is where there's some interesting Microsoft technologies that are at play to make this interesting. I work with some partners who are doing this this kind of space.[00:54:48] So lots of possibilities there. And then the third metaverse I think of is probably the one that most consumers think of, which I'll, I'll call it the entertainment metaverse, but it's basically, where all the virtual reality games come into light, so , that's a pretty straightforward one to understand.[00:55:02] I would argue though, the real significance of all these is that any of these metaverses can be looked at as delivering a commerce capability. It's not just the entertainment metaverse that we expect to see commerce happening. It could be any of these. There's nothing that says I have to have a hard and fast rule about what that metaverse model is.[00:55:21] The whole point in this metaverse space is I'm not constrained by physical reality limitations. I can do things any way we want. So why couldn't there be commerce applications across all of them?[00:55:31] Casey Golden: Yeah. I mean, I'm not working with goggles on, so staring at a computer screen for 18 20 hours a day is bad enough with our eyes and mental health. There's lots of people who get migraines. This is very much a conductor for it. And the people who are building the meta for work or these metaverses for work, they don't even work in the metaverse that they're building.[00:55:58] So I just don't know how we're expected to participate. If the builders can't find the value in building the metaverse for work in it.[00:56:10] Ricardo Belmar: Right.[00:56:11] Casey Golden: I just it's. If they can't find the value to do it on a day to day and be building there, then I don't see how anybody else is expected to go in there and do it if they already don't wanna do it.[00:56:23] And don't find it as productive. [00:56:24] Ricardo Belmar: Yeah, we didn't get into that in the, the clubhouse session, but I, I can't remember. It might have been Shish that brought it up, that everybody gets excited talking about the capabilities with these metaverse technologies, but at the end of the day, the fact that no one's gonna sit around in the workplace metaverses for eight hours a day wearing all this equipment. Everybody's already stressed enough being on teams calls and zoom calls for hours on end during the day. So who's gonna add more layers to that. So, and I think again, shish brought up the point that while the technology's really good.[00:56:53] It's made a huge amount of progress. It's still not quite where we need it to be for these things to be a hundred percent mainstream. And to be totally comfortable. For short periods, sure. I mean, I can see the onboarding piece, right? You're the new hire. There's an onboarding session that might be an hour here, a half hour there, but it's not a straight 10 hour, day kind of thing, because nobody wants that.[00:57:15] Casey Golden: oh yeah. Most people work like eight, 10 hour days.[00:57:18] Ricardo Belmar: oh, yeah, yeah. Except maybe, you know, startup life, but that's another show[00:57:24] Casey Golden: so no, I think the retail training and the company onboarding in the metaverse is valid, I mean, I think we've all started a job at some point where our first day, we just, we get handed a four inch, six inch binder and told to read it, memorize it. This is your first day. So I think that, that definitely could change.[00:57:45] And even just being able to have that mentorship, even if it's like an AI in this type of situation where you can go through multi-step training multi-month multi-year. I think the retail training is a huge opportunity because it would allow for easier role play between a customer and the retail associate, even because, I mean, I don't know about you if somebody says, okay, go role play.[00:58:15] I'm like already on the floor, like laughing uncontrollably. Cause I can't do it.[00:58:20] Ricardo Belmar: Right. Yeah. Yeah.[00:58:21] Casey Golden: like [00:58:21] Ricardo Belmar: true. Yeah. That that's not an easy thing. Yeah. Yeah.[00:58:24] Casey Golden: not an actor for a reason. So I think that there's it does take a little bit of that personal personality or whatever away from us, so we can just kind of be and like play a video game. And it's a lot easier to absorb over time than it is reading this four inch book, especially in things where you need to be customer facing.[00:58:44] Ricardo Belmar: Yeah, I think you make a good point there. And with all of these caveats and, conditions and constraints that we're highlighting, I suppose we would be totally remiss if we didn't offer some thoughts on, okay, where do you go next with the metaverse? We've kind of told you what cool things there are happening, what it is.[00:59:03] We've talked about things to watch out for. So what do you do about it? And of course, this was one of our 2022 predictions from back in season one, episode four, back then , we said metaverse was an important trend for this year. Obviously we're still talking about it. So I think we kind of nailed that one.[00:59:17] But while we didn't go so far as to say it was gonna be a new money generating sales channel for retailers and brands, we did say that you should be experimenting with the metaverse and with NFTs and, and web three, start feeling out where your customers are, what appetite they have for all of this.[00:59:32] And I think we even mentioned digital twins back then, too, which we've highlighted a lot in this episode, and it's still my favorite use case right now. So Casey, what would be your top recommendations for brands?[00:59:43] Casey Golden: Yeah, I think number one, you've got to start building a community. An email address is not a relationship. Open up a discord account and start moving your email marketing list into discord members has two way conversation. Step two, I would pretty much say like get on Twitter, reactivate the brand's Twitter account.[01:00:05] Everybody in this space is not on Instagram, so, they need to go ahead and get onto Twitter. Third step I'd essentially say, like start collecting your customers' crypto wallet addresses. So you can start understanding, do you have an address? Do I need to provide education? And can you go ahead and make sure you know how many customers you have access to, to essentially airdrop think of it as like web three's email address?[01:00:30] That needs to essentially just happen now. I really suggest brands launching an NFT and not necessarily, this whole collection. It doesn't have to be a big deal. It doesn't even have to be in the press. It just needs to be hyper segmented to a small group to learn and build these initiatives with the brand for those NFT holders.[01:00:51] And until you have a compelling utility, this could be a V I P NFT, and you just invite 600 people or 200 people. And just really try to figure out how do you engage with these NFT holders? How do you talk to them? What do you do for them? What's the benefit? Does it get you a blowout at a salon in New York?[01:01:15] Because like they're friends, does it get you private shopping on e-com? Does it get you New York fashion week tickets, you know, really thinking about , what's the value of these customers having this NFT and just spend time until you can figure out something that makes sense. And then go ahead and move into those initiatives.[01:01:34] Also, I mean, it's been a constraint for me recently is just not having digital assets. They're not ready to move. So, I mean, going forward, I would love to see all the brands just create all of the 3d and wearable assets when they create the collection and decide like, as soon as you write the production order, please go send out the, the designers to go ahead and create all of those 3d digital assets so that if anything happens from the date of production, a lot of us do that, like six to nine months in advance all the way through the selling season.[01:02:12] If something interesting happens, you have the assets you can act, right. I've got 3d designers that are pulling stuff off in a matter of five days for New York fashion week right now from like multiple brands. I'm just like, okay, moving forward. Can you just go ahead and have this whole next collection that you have in production?[01:02:33] done. I don't know what we're using them for. You don't know what we're using them for, but if you just have them, it would be quite helpful. So I mean, to me, these are the most important things to get started. It's not flashy. It's not cool. It's not in the middle of times square , but we have to start at the very beginning.[01:02:57] Who are your customers? Where are they at right now? And that's kind of like what we need to know. And so I think just building the community, being a part of it, that's like step one.[01:03:09] Ricardo Belmar: Excellent. Excellent points. I think we could probably call that the the retail razor shows five step program or five step roadmap to the metaverse.[01:03:16] Casey Golden: yeah, so basic[01:03:19] Ricardo Belmar: it covers all the basics. Exactly. Exactly. So Casey, kinda like I said to the, the Retail Avengers in the clubhouse session, and we could just talk for hours and hours on this topic. So I'm sure we're gonna be coming back to this in the future.[01:03:32] Casey Golden: a hundred percent. I mean, the metaverse isn't going anywhere. You and I aren't going anywhere. So I'm really glad that we're going to revisit this in future episodes. but all good things must come to an end. So I think it's time we thank all of our clubhouse audience and wrap up this episode.[01:03:51] Ricardo Belmar: it is that time.[01:03:52] Clubhouse Thank You[01:03:52] Casey Golden: Before we close. We'd like to thank everyone who joined us on stage for this clubhouse session to talk metaverse and ask questions. So a special shout out[01:04:05] Ricardo Belmar: to frequent visitor to our clubhouse rooms, Ananda Chakravarty, currently the vice president of research at IDC in the retail group for his great question about real world examples of retailers in the metaverse looking for success.[01:04:18] Casey Golden: And a super friend of the show, Michael Zakkour, founder of five new digital for setting the foundation for what the metaverse really is today versus what it will become tomorrow. And what that means for retailers.[01:04:32] Ricardo Belmar: Thank you Ananda and thank you, Michael.[01:04:34] Casey Golden: so Ricardo, I think that's a wrap for our first episode of season two.[01:04:39] Ricardo Belmar: Indeed it is! [01:04:41] Show Close[01:04:41] Casey Golden: We hope you enjoyed our show and consider giving us a five star rating and review on apple podcasts. Don't forget to smash that subscribe button in your favorite podcast player so you don't miss a minute! [01:04:54] Wanna know more about today's show? Take a look at the show notes for handy links and more deets.[01:05:00] I'm your co-host Casey golden.[01:05:02] Ricardo Belmar: And if you'd like to learn more about us, follow us on Twitter at caseycgolden and Ricardo_Belmar, or find us on LinkedIn. Be sure to follow the show on LinkedIn and on Twitter at RetailRazor, plus our YouTube channel for videos of each episode and the occasional bonus content. [01:05:18] I'm your host Ricardo Belmar.[01:05:19] Casey Golden: Thanks for joining us.[01:05:21] Ricardo Belmar: And remember, there's never been a better time to be in retail. If you cut through the clutter.[01:05:28] Until next time, THIS is The Retail Razor Show!

Season 2 of The Retail Razor Show is almost here!Hosts Ricardo Belmar and Casey Golden are back to bring you another amazing show season!Retail isn't getting any easier, is it? From omnichannel experiences and supply chain headaches to labor shortages, we're all catching feels for the metaverse and building web three strategies. Discover the right retail tech to power your customer experiences, store ops, and the real work across the supply chain. What's a retailer to do in a post-pandemic world?That's where we come in. The retail razor show, an unapologetically authentic retail podcast for product junkies, commerce technologists, and everybody else in retail and retail tech alike.!Remember, this is the best time to be in retail - IF you can cut through the clutter! Until next time, THIS is the Retail Razor Show!Have you heard the news? We’re up to #20 on the Feedspot Top 60 Retail podcasts list, so please keep those 5-star reviews in Apple Podcasts coming! With your loyal help, we’ll be moving our way up the Top 20 in no time! Leave us a review and we’ll mention you in a future episode! https://blog.feedspot.com/retail_podcasts/Meet your hosts, helping you cut through the clutter in retail and retail tech:I’m Ricardo Belmar, a RETHINK Retail Top Retail Influencer for 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 lead partner marketing advisor for retail & consumer goods at Microsoft.And I’m Casey Golden, CEO of Luxlock. Obsessed with the customer relationship between the brand and the consumer. I've spent my career on the fashion and supply chain technology side of the business. Now I slay franken-stacks!Music provided by imunobeats.com, including E-Motive, and Overclocked, from the album Beat Hype, written by Hestron Mimms, published by Imuno.The Retail Razor ShowFollow us on Twitter: https://bit.ly/TwRRazorConnect with us on LinkedIn: https://bit.ly/LI-RRazorJoin our club on Clubhouse: http://bit.ly/RRazorClubListen to us on Callin: https://bit.ly/RRCallinSubscribe on YouTube: https://bit.ly/RRShowYouTubeSubscribe on Apple Podcasts: https://bit.ly/RetailRazorShowRetail Razor Show Episode Page: https://bit.ly/RRShowPodHost → Ricardo Belmar,Follow on Twitter - https://bit.ly/twRBelmarConnect on LinkedIn - https://bit.ly/LIRBelmarRead my comments on RetailWire - https://bit.ly/RWRBelmarCo-host → Casey Golden,Follow on Twitter - https://bit.ly/twCaseyConnect on LinkedIn - https://bit.ly/LICaseyRead my comments on RetailWire - https://bit.ly/RWCasey

S1E13 – Razor’s Edge: The Season 1 Finale!Welcome to Season 1, Episode 13 of The Retail Razor Show – the season one finale!It’s been an amazing opening season for the show, but now we have reached the Razor’s Edge – the end of our first season! Ready to finish with a bang? We’ve got a special guest host – yes, that’s right, guest host – Liza Amlani, principal and founder of Retail Strategy Group and The Merchant Life newsletter!Liza turns the tables on our regular hosts, Ricardo Belmar and Casey Golden, to hold a mid-year check in on their Top 10 Predictions for 2022 from Episode 4. Then, Liza walks our guests through highlights from throughout the season, remembering great moments with Andy Laudato, COO of The Vitamin Shoppe, Ron Thurston, author of Retail Pride and host of the Retail in America tour and podcast, and Gautham Vadakkepatt, director of the Center for Retail Transformation at George Mason University. Listen in to see if your favorite moments from Season 1 made it to the Razor’s Edge!Have you heard the news! We’re up to #20 on the Feedspot Top 60 Retail podcasts list, so please keep those 5-star reviews in Apple Podcasts coming! With your loyal help, we’ll be moving our way up the Top 20 in no time! Leave us a review and we’ll mention you in a future episode! https://blog.feedspot.com/retail_podcasts/Meet your hosts turned guests, helping you cut through the clutter in retail and retail tech:I’m Ricardo Belmar, a RETHINK Retail Top Retail Influencer for 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 lead partner marketing advisor for retail & consumer goods at Microsoft.And I’m Casey Golden, CEO of Luxlock. Obsessed with the customer relationship between the brand and the consumer. I've spent my career on the fashion and supply chain technology side of the business. Now I slay franken-stacks!The Retail Razor ShowFollow us on Twitter: https://bit.ly/TwRRazorConnect with us on LinkedIn: https://bit.ly/LI-RRazorJoin our club on Clubhouse: http://bit.ly/RRazorClubListen to us on Callin: https://bit.ly/RRCallinSubscribe on YouTube: https://bit.ly/RRShowYouTubeSubscribe on Apple Podcasts: https://bit.ly/RetailRazorShowRetail Razor Show Episode Page: https://bit.ly/RRShowPodHost → Ricardo Belmar,Follow on Twitter - https://bit.ly/twRBelmarConnect on LinkedIn - https://bit.ly/LIRBelmarRead my comments on RetailWire - https://bit.ly/RWRBelmarCo-host → Casey Golden,Follow on Twitter - https://bit.ly/twCaseyConnect on LinkedIn - https://bit.ly/LICaseyRead my comments on RetailWire - https://bit.ly/RWCaseyTRANSCRIPTS1E13 Razor’s Edge: The Season 1 Finale![00:00:00] Introduction[00:00:00] Liza Amlani: Hello, retail, razor listeners. Welcome to the season one grand finale episode. As you can tell, I'm not one of your usual hosts. I'm Liza Amlani principal and co-founder of retail strategy group and the merchant life newsletter. And I am your guest host today where I'll be turning the tables on your usual host and interviewing them.[00:00:41] So let's bring them in Ricardo Belmar and Casey golden, Casey and Ricardo. Thank you so much for having me guest host today.[00:00:48] Ricardo Belmar: Hey, Liza, it's awesome to have you here.[00:00:50] Casey Golden: So amazing to have you off of Twitter for a moment, on the podcast.[00:00:55] Liza Amlani: Of course we're, we're changing. We're changing it[00:00:57] Ricardo Belmar: Of[00:00:57] Liza Amlani: little bit. so how does it feel being on the other side of the mic today?[00:01:02] Casey Golden: It's a little different, somehow it doesn't feel like being a guest on somebody else's podcast. So it's a little bit strange, [00:01:07] but, [00:01:08] this was one of our most popular topics. So[00:01:10] Ricardo Belmar: That's true. Yeah, that's true. I mean, I, I would kinda say the same thing. It's a little, a little weird, not being the one, asking the questions like we usually do on, on the show. But this will be fun. This will be something different. And you're totally right. It doesn't feel the same as being a guest on somebody else's podcast.[00:01:24] So this will be an interesting one this time around.[00:01:26] Liza Amlani: Well, I'm excited to get you guys in the hot seat. So let's dive in. First I'm gonna run through the top 10 predictions you guys made in episode four. And we'll consider this a mid-year check-in. And just because I wanna keep you guys on your toes cuz you know, that's how I roll. I'm gonna keep score on whose predictions are performing better.[00:01:44] Nothing like a little competition to mix things up.[00:01:47] Ricardo Belmar: Well, this could get ugly, then Casey's so super competitive. it's a good thing. We're all remote. And there's no risks of things being thrown around the room.[00:01:55] Casey Golden: Yeah. Well, I mean, maybe not your room I think it's pretty obvious who's gonna have the, have the better record, but there's a reason you know, Ricardo and I are on here. I mean, I think we had a few times where we're like, no, you have to change it. Cuz we can't have everything the same. so.[00:02:12] Liza Amlani: well, this is definitely gonna be better than I expected. I love it. Okay, so let's not get ahead of ourselves. And the second part, I'm also gonna ask you both what your favorite parts of the season were, and a few other surprise questions about the season. So let's get started with the season one finale.[00:02:31] Revisiting the Top 10 Predictions for 2022 [00:02:31] Liza Amlani: Okay. The first prediction was about retail media networks. Ricardo, let's start with you.[00:02:36] Ricardo Belmar: Well, I think this one's definitely a winner because let's see, since we did episode four, there must be at least, I don't know, like another 50 retail media networks that have been announced by retailers this year. I don't know ranging from what. Like ulta beauty hadn't been announced when we recorded that.[00:02:49] That's the one that everybody wanted to talk about. I mean, just about, everybody that's either a a big box retailer. I mean, a bunch of specialty ones, that maybe we wouldn't have expected. I think this one's just continuing to grow, so I'm thinking I'm good on that one.[00:03:02] Liza Amlani: Okay, Casey, let's talk about brick, expansions. I love this one, cuz you know, I'm a big fan of physical retail. [00:03:08] Casey Golden: yeah, and I kind of focus on digital these days. So it's kind of nice to pop into bricks every once in a while. It's where we all started, right? [00:03:16] there was barely an internet.[00:03:18] not saying that anybody's old here, but you know, there wasn't very many commerce stories in the beginning, so the passion started on the floor. It's been interesting with Amazon's new, they're still kind of expanding on these, these in stores, reimagining the shopping and buying experience. I've actually seen a lot more traction in that, you know, with all of these tech enabled spaces and a lot more experimenting.[00:03:45] So, I mean, I think we kind of nailed that this is really going to be a tech enabled opportunity for a lot of bricks and changing the traditional big box. For more entertaining showrooms kind of tagged Glossier as the winner. There's been a lot of changes over there too. So there's a lot of opportunity here for somebody, for a whole group of people to really win on bricks.[00:04:07] Liza Amlani: Definitely. I also just placed a Glossier order yesterday.[00:04:11] Social commerce and live streaming, Ricardo., [00:04:14] Ricardo Belmar: Oh, this is S definitely one of my favorite topics. Still may, maybe second, only the retail media networks. I think it's still growing, right? I guess one of the big things in the prediction I talked about was this idea that retailers would start relying more on their store associates as the live streamers, as the way of really promoting the whole idea of, of live shopping that way. And I think overall, this one's still building momentum and, and gaining steam. all the social media networks are certainly still putting out more features what Twitter added a new shopping capabilities, which maybe we wouldn't have expected Twitter to do.[00:04:46] In episode 12, we even talked about Pinterest and, and their new capabilities. So I think there's a lot happening there. And if anything, maybe hasn't come true yet, but I'm gonna still hold out hope here for later in the year is when we start seeing more frontline store associates doing the live streams, and maybe that's picking up steam, I think in more of a, a one to one kind of shopping experience versus a one to many. But I still think that we're gonna see that. I just think it's a natural extension and we might see it first coming from smaller retailers. I, I think because it's easier for them to be more nimble with that and get somebody recording and going live whereas big retailers are just naturally have this motion where they're gonna want to go big and, have big production values and bring in lots of equipment.[00:05:25] And that's gonna slow them down a bit. But I think we'll still see it happen.[00:05:28] Liza Amlani: Yeah, I think[00:05:29] Casey Golden: Yeah. I mean, I. But I put a lot of emphasis on TikTok commerce, because I've been watching that [00:05:35] beta program since[00:05:36] Ricardo Belmar: Yeah. Yeah.[00:05:37] Casey Golden: Asia and then pulling out of the us and Europe last week, that announcement I think it's, gonna probably be better for smaller brands than the big ones, because TikTok would've been that commerce channel.[00:05:50] So who's to know. [00:05:52] Ricardo Belmar: Yeah, I think there's still plenty of startups coming up too, that I, I see focusing on, on live streaming. So if I was gonna add something, it would be how things turn out between the big social media platforms versus these dedicated livestream platforms that are mostly driven by startups and how retailers are gonna adopt one versus the other.[00:06:09] And, and maybe we'll seem do both because it just kind of makes sense to have one off your own website and not totally rely on, you know, a Facebook channel.[00:06:16] Liza Amlani: Oh, for sure. When we were at the retail innovation show, there were, I think core site had partnered with a live streaming platform, which was super interesting, but I feel like they weren't retailers. So it'd be interesting to see when retailers actually merge with live streamers and partner together to, to have the best CU customer experience[00:06:35] Casey personal shopping. I love this one.[00:06:38] Casey Golden: I'm obviously I'm biased. [00:06:40] So, brownie points here, customer expectations. I mean, I thought that they were high during the pandemic. [00:06:47] They're almost unachievable at the moment. Shoppers are no longer content with that simple transactional purchase outside of like commodity goods. And we, we saw a lot of innovation with the associate led shopping and it went big.[00:07:03] but I think that there's like a lot of rebuilds when it comes down to the tech on actually operationalizing. And really bringing that in-store experience online and working with customers remotely. We've seen a lot of team, a lot of brands building out specific dedicated frontline staff teams, but putting them online and building virtual teams to really have, you know Trusted product expert or that sales associate being able to, to help them shop and, and build that relationship.[00:07:33] I'm gonna still betting in that we're gonna see a lot more of it. [00:07:36] Liza Amlani: I think [00:07:36] so, too. [00:07:37] Casey Golden: with like, yeah, I mean, we, have to alleviate all of the mundane tasks that these sales associates have to deal with in order to manage these customers. And make sure that they don't lose their jobs. The sheer volume of online traffic and then trying to provide a personal shopping experience. I think everybody said that it was, this personal shopping shop with the stylist's going into client telling, and that's gonna be new platforms. It's working so. I think it's, it's really exciting to see the brands put this talent at the forefront of the narrative and start giving them software.[00:08:15] Liza Amlani: I love that you brought up client telling because I started on the shop floor and I definitely had a book that I used to, you know, bring to, to Harrods. That's where I worked in one of my, one of my store roles. And that book went everywhere with me. And that was my client telling software was manual pen and paper and technology would've definitely changed the game.[00:08:37] Ricardo, let's talk about the shopper experience.[00:08:40] Ricardo Belmar: Yeah, I think, you know, it technology and in-store experience. I mean, they're continuing down that March to converge. . And bring in more and more things into the store. We've got this year more examples of computer, vision and AI. You know, just look at Amazon's new style store and what they're doing there.[00:08:55] Some people like it, some not so much, but I think the, the point is we're seeing more and more experiments and more and more attempts to try things out. I think I mentioned when we first talked about this, we talked a little more about where we're AR and VR platform is gonna play in store.[00:09:09] I don't think we've seen as much with that. Although, I mean, I think there's more AR things happening. I'm I'm. More and more things happening around trying to improve fit in apparel. . It's always a challenge there. But to me, this is all about finding more and more technology in the store, but not in the way of the shopping experience, which makes it so much of a better experience and that we have people wanting to do more shopping in store.[00:09:32] Right now we've gotten past this idea that online was just gonna totally shut down physical experiences. And, and we're seeing that we're back to back to the norm there. For the most part, I think we'll just see more and more cashierless checkout, more shelf scanning types of. Technologies, whether it's robots or IOT sensors, we're gonna see more and more scan and go.[00:09:51] So I think this one's moving along, maybe not as fast as I, I would've expected at the beginning of the year when we talked about it. But that to me has more to do with retail is wanting to be cautious about some of these investments versus desire to do them at all. So I think it's all still happening.[00:10:05] Liza Amlani: Casey by now pay later.[00:10:07] Casey Golden: Oh, it gets hotter, then the bubble bursts. I'm a big believer and don't spend more than you have, but you know, Regulators are there they're coming. I read all my regulators. All I hear is Warren G [00:10:20] Liza Amlani: I love it. Now I have Warren G in my head. Good song.[00:10:24] Casey Golden: I know, right. We should all [00:10:25] have [00:10:26] Liza Amlani: I know[00:10:27] Casey Golden: God, good times. Good times. I think one day we'll look back at, buy now, pay later and say good times. It's, it's been a, they've been getting a lot of traction making, purchases, lack consumer protections and and they can really make hassle free returns 30% APR with just crazy, crazy APR rates.[00:10:50] There's easier ways to, block out these payments and they've been productive for all the brands. I mean, I don't know if you can even find a website that doesn't offer by now pay later. But I also think it's a very American thing. We are like, we invented the credit card, right? So whether or not it's consumer. So whether or not it's good for the consumer, it's been really good for businesses. But I think that there's gonna be a little bit more regulation and consumer protections on it to really make sure that, when you make a purchase for, $300, it's not gonna cost you three grand. cuz there's been some. Some, some more predatory behavior in this space, but Klarna has really stepped up their game and providing really interesting product discovery in their app rewards programs. And, you know, they recently just bought hero which was a personal shopping app. So they're offering, you know, just looking at the customer journey from start to finish and, you know, trying to set the.[00:11:50] Up to be more than just a payment system or at least feel like it. Right. So I think the competition's gonna get tougher and they're gonna have to be more interesting to branch out from the regulation, I think, [00:12:04] Ricardo Belmar: acquired or merge or combining something's gonna happen.[00:12:07] I don't think it's gonna keep on this growth path. [00:12:10] Casey Golden: ricardo, I'm really interested on your, thoughts on that too. [00:12:13] Ricardo Belmar: Oh, I mean you on, on buy now pay later. You pretty much had me at regulators.[00:12:19] Casey Golden: and I've used it once as an experiment. It's just like, well,[00:12:22] Ricardo Belmar: yeah. yeah. I, I, I mean, I, I think the very first thing we said back in, in that episode, on that one, right? The, the, it gets hotter and then the bubble burst, I think we're, we're just about, at that point, in my opinion, and there was more and more folks looking. Just what you said, right? The predatory terms, the insane APRs, and it's on a path to have an impact, right.[00:12:46] To put people into more and more depth when they don't need to be. So I, I don't know. I, I just, I think it's interesting that we see. The BPL companies trying to add more services to their offering that's not part of the core idea right. Of buy now pay later so that their business isn't totally dependent on it.[00:13:03] And I dunno, in some ways, this is one of these things where it was a huge bubble, but at the end of the day, I mean, How hard is it to replicate by now pay later functionality for a payments company. So where's the differentiator for all these guys to stay in business? I think , the bubble , has to burst.[00:13:17] Liza Amlani: And when we think about Ricardo, this is one for you, the analytics. AI and machine learning and sustainability and traceability and merchandising returns and predictive analytics, all this stuff that I love to talk about from a merchant perspective. Let's talk about your prediction around this.[00:13:33] Ricardo Belmar: . So in, in that one I saw that we're just gonna, so, so much more automation. A lot of this technology being used to remove all the mundane and tedious tasks that store employees have to deal with. And, and there are so many new tools coming out with that. I I've been working with a number of different companies now who have new technologies, just for that to make the life easier for those frontline teams.[00:13:55] And then just looking at returns, returns is becoming an even bigger problem, I think now than it was at the beginning of the year. And I see more technology being thrown at how to solve returns, not in terms of what do you do when somebody wants to return something, but what can you do preventively to make it so that people don't need to buy three versions of the same thing to see which one's gonna be the right one and return the other two. Now there's ways that AI machine learning can help with that analysis. And I think we're seeing solutions that do that. I've seen more retailers implement those and they're seeing tangible changes, where we're seeing reductions of returns in double digit percentages, which is, is obviously going to be meaningful to their sales numbers. You know, think sustainability has just continued down a march , I think more and more news coming out where people start to question some brands as to, are they really engaging in those sustainability practices they've been talking about? Or is there, are they doing one thing in with their right hand, but the left hand's doing something else.[00:14:50] It kind of works against that sustainability. So to me that says that people are paying more attention to sustainability is starting to matter more which I see as a positive and, and again, I think this is one where , without technology, none of the brands are gonna be able to solve this in a, in a meaningful enough way that's gonna accomplish, the dual purpose goal, which is to demonstrate to their customers that they are engaging in sustainable practices, but at the same time, not do it in a manner that's gonna make their cost skyrocket and make them unprofitable.[00:15:17] So I think that that's still happening. So I think that's on a good, good March. Predictive analytics. I mean, I, I'm always still surprised when you see retailers show you that, oh, they're still doing their forecasting on a spreadsheet in Excel versus using something more, you know, more appropriately let's say size for, for their business that allows them to, to leverage AI in a better way.[00:15:36] And I mean, yes, during the pandemic, all these systems tended to, to create more problems and solutions because nobody let's face it, could have the right model that was gonna predict what was gonna be a shortage and, and factor in the supply chain challenges and all that. But now, now those models are starting to get worked in and now[00:15:53] some of the companies I've been working with are finding that the real reason those solutions led them down the wrong path is because the people that were reading the results were taking different actions than they probably should have been. So it was less the technology as it was the human intervention, that didn't wanna accept what the technology was saying.[00:16:08] Because they felt that, you know, that was gonna be a different result. So I, I think that's all working itself out. In some ways I think this is one of the , most exciting technology areas in retail because it has the potential to have so much change, even if it's more behind the scenes and most consumers don't see this, it's not obvious to you if you walk into a retailer store.[00:16:26] But there's so much of this behind the scenes, it has to happen to make the business work. I, just think it's nowhere to go, but up.[00:16:32] Casey Golden: Yeah, I'm gonna just add a point on there just to kind of leave our listeners with something to think about. We've been measuring the wholesale business for like a hundred years. This is really the very beginning of taking direct to consumer analytics. As we grow these business models out on selling direct to the consumer, there is so much data, so more data than we've ever had.[00:16:58] And so we're gonna be able to get so an amount of knowledge from this over the next, like three years. That we've never seen or understood about our brand or sales. And I think it's, I, I agree, Ricardo, it's super exciting. I mean, you can just geek out on this[00:17:16] Ricardo Belmar: Oh, oh yeah. There's we're gonna, we're already keeping those data scientists employed for a long time.[00:17:23] Liza Amlani: I, I definitely geek out. Yes. I definitely geek out on all that. You know, coming from that merchants and product creation space, the challenge I find is that, we have all this data and we always have so had so much data from loyalty programs and even client telling, but are we really using it to drive? You know, product decisions, assortment decisions. So it will be very interesting to see, you know, in the next three years, I think we should come back to this one in three years and let's see where we are. Let's talk [00:17:52] Ricardo Belmar: Yeah, I think, I [00:17:52] Casey Golden: We got a [00:17:53] Ricardo Belmar: safely put this one on every top 10 list.[00:17:55] Liza Amlani: Oh yeah. [00:17:57] Casey Golden: Yeah, no, we've [00:17:59] Liza Amlani: exactly. Well, let's, let's talk about rapid [00:18:02] delivery. [00:18:03] Casey Golden: Yeah, rapid delivery. [00:18:05] Goodness gracious. Does access delivery from any company you're Canada. So[00:18:14] Liza Amlani: I know I do. I know. Come on. No, no, no, no, no. Getting here. Maybe not two hours, but definitely we're getting[00:18:26] Casey Golden: I feel yeah, I mean, Rapid delivery gets a rapid shakeout. I mean, too many popped up during the pandemic. It was an incredible opportunity to force, like for force adoption, for consumers to shop buying things online that they, they never even thought was possible. The amount of grocery online. I mean, without the pandemic, would you ever think like rural areas are getting.[00:18:51] We're getting, you know, two to same day delivery. But we asked in the beginning of the year, is this really sustainable? And I think the, the market has decided that it's not cost effective. And we'll continue to see a lot of acquisitions and consolidation M and a potential here with like micro fulfillment and last mile delivery.[00:19:10] Very hot space. A major's gonna win. , but there's been a lot of adjustments here, especially this year with even Uber eats. They're not, incredible how long it takes. Amazon canceled their two hour delivery and metropolitan areas. And a lot of them grocery delivery services have ceased to exist in a lot of you know, non-chain grocery stores that was, that were leveraging it.[00:19:32] I think, we're gonna have to figure out how you can afford to have[00:19:35] last mile. I'm very curious on how consumers feel about having this amazing service and then it going away and how that affects brand loyalty. So I think there's still a lot to watch here. There's a big opportunity. But it's gonna take a lot of money.[00:19:48] Liza Amlani: Yeah. And it's almost like we haven't really seen who pays for this. Who's P and L is this really impacting[00:19:56] right. [00:19:56] Ricardo Belmar: I don't know that anybody has the model down yet, to make money off of it because it's kind of this thing where, you know, the. The faster you want to deliver it automatically means the closer you have to stage it to the customer to have a chance, of getting it there. I mean like two hours, we had like the quick commerce brands in 15 minute delivery in cities.[00:20:14] I mean, if you're gonna do that, then you have to have so many different staging locations and fulfillment centers and you've gotta have the best predictive analytics to know exactly what are the items everybody's likely to order that they want in 15 minutes. And, and then you end up. All the, the providers say, well, we hope to make this work with larger basket sizes, but okay.[00:20:33] You don't really want a big order because then if you're trying to deliver it in 15 minutes, it takes you too many minutes to pick and pack the order to get what I wanted to get it to someone. . If it's more than a handful of items. So that means, okay, if you can't get your volume based on basket size, you've gotta have it on number of orders.[00:20:48] Okay. But then you mean more labor, right? Or, or more automation. And either one of those has a cost implication. So you still need to. Work that out. So I don't know. It just doesn't seem like it's sustainable. And then at the end of the day, I think Casey, you asked the right question. What do consumers really need to have delivered in less than two hours?[00:21:05] Casey Golden: my[00:21:06] Ricardo Belmar: often enough to make a business out of it.[00:21:09] Casey Golden: Yeah. I mean, I'm, I'm, I'm telling I'm, I'm probably oversharing here, but like the amount of times I ordered a chocolate donut from dunk and dunking donuts around like 11 to 1:00 AM in the morning from Uber eats during the pandemic is ridiculous. but it cost me literally nothing. Now, if I wanted to order that same donut for just to hit a craving at like midnight. It would cost me like $32. Like there are so many fees attached to that now that I'm like, yeah, I don't need,[00:21:39] Ricardo Belmar: Yeah. Yeah. Do you really need it delivered right now? Is it really worth it?[00:21:43] Casey Golden: yeah. So, I mean, it's those impulses versus primary way of going grocery shopping. So I think that there's, the volume has, has definitely adjusted the purpose of what people are buying the basket size. And then people are out and about, and they, you it's much easier to swing by the grocery store on your way home. [00:22:01] Liza Amlani: Exactly. [00:22:02] Casey Golden: that just takes your volume away from your pricing.[00:22:04] Liza Amlani: Yeah. And speaking of pricing and volume , I'm not sure if this is a segue, but Ricardo we're, we're almost done. We're at number nine, low code revolution. Tell us more.[00:22:15] Ricardo Belmar: Yeah. So I, I kind of hang my hat on this one as , the hidden secret that let's retailers figure out how to do things that used to take them six months and do it in six weeks because you can't wait for an army of your in-house developers to come up with a brand new system for you for any task, like you used to pre pandemic. Now you need things done right away and you wanna build into the schedule, how often you're gonna iterate on that solution to make it better and better. And if there's any technology that makes that doable, it it's everything around low code technologies where you're visually building applications, creating reports and dashboards to keep everybody informed.[00:22:49] If I just go by, what I hear from my Microsoft colleagues who are doing these deployments with customers, it's like every single opportunity they have involves some kind of low code technology aspect. And most of the partners that I work with all have some sort of an implementation in their solution that lets a retailer customize something via a visual kind of development platform.[00:23:10] So I'm beginning to feel like there isn't any technology that's gonna be put in front of a retailer that doesn't have a low-code design component to it just to make life easier for the retailer and to gain adoption.[00:23:19] Liza Amlani: Casey number 10. This is our last one. Everyone web three metaverse crypto NFTs. I don't think you know anything about this space, right? Casey. You actually teach me a lot. I'll [00:23:31] Casey Golden: Does anybody like really does anybody? I mean, I think I I've, every conversation I've ever been on is like, well, I'm not an expert. I'm like, come on. None of us are like, we're all learning together. Prepare for some whiplash. It's getting interesting and web three's here to stay. It's not, it's not just one thing.[00:23:47] We've got an incredibly passionate creator community and consumers are, curious, and we're getting a pretty rapid adoption rate. And, and adding a lot of payment opportunities for commerce and making this bridge. Commerce is going to drive this space to turn it into something that's here to last the biggest challenges are gonna be around data interoperability.[00:24:14] Retail is famous for silos and web three developers are, are staying aligned with that methodology. So hopefully hopefully we can all break that down. And a lot of companies, thousands of companies have come together to create standards for web three From file sizes to ethics. So I think that that's really exciting.[00:24:34] I've never seen companies come together quite like this. So fast in a market to say, we want this to stay. We need to work together. Let's not compete. So that's pretty interesting and brands are experimenting. Brands that typically do not experiment, period, are experimenting and they are supporting very large global initiatives to accept crypto at their stores, to launch NFTs and collaborate with content creators, or artists that are not in house, which is another really great, opportunity. That's just rare. So I wanna see a lot more brands build community and really see what they can turn this space into. It's not going anywhere. I can say that. It's definitely not going anywhere. I think it could make all of our predictions in some way. There's probably some piece that could be innovated by using some piece of web three and make our lives a little bit easier and a little bit more, enjoyable, you know, from the consumer to the brand, there's an opportunity here. But we're, the brands are gonna have to experiment to figure out what piece is gonna be the way that they roll it out. So I'm excited about this space. Take it slow.[00:25:47] Liza Amlani: I'm excited too. I was actually in the the Soho Faragamo store a couple weeks ago, and I saw the the NFT station, I guess. And as a consumer, I was definitely fascinated. So I'm excited to, to see. More of what happens in that space. [00:26:05] well, I'm sure that everyone listening is wondering how the score turned out.[00:26:08] So now as a, an impartial judge and to friends, to you both, you know, I will say that I would say you guys are both pretty spot on. Do you think that there's there's anything that you should have predicted that, should have been on this list? I think that's a, that's an interesting question to ask you both.[00:26:26] Ricardo Belmar: that's a tough one. And if I were to pick anything, I would say the one thing we didn't, we came close to it, right in Casey's brick and mortar expansion. I don't know that we really talked about whether it was gonna be sort of this pendulum swing, between online commerce growth versus physical stores and just how much people were gonna rush back to stores this year and, and want to enjoy that physical shopping experience. And, and what that implication was towards, the trends the last two years where our e-commerce was just gonna take over everything. Which isn't to say that it's still, you know, moving ahead, it's not like it's gonna contract, it's gonna keep growing just that the pace is back to normal.[00:26:58] So maybe that's one that we didn't talk about that we, we could have gone a step further maybe in, in that one prediction, but that's the one that comes to my mind. [00:27:05] Casey Golden: Yeah. I mean, coming out, we spoke about it maybe a couple times throughout this entire season, knowing that when that pendulum swings, it's gonna come with a recession. And we didn't really dive in. I think we could have used an entire episode just to talk about. The timing, the impacts of all of this with some type of recession coming into play, because it was obvious the timing wasn't.[00:27:28] And so it aligning up our holiday season or the kickoff of the new year. You know, there's a lot of companies are expecting to hit their numbers this year because of holiday. So I think we could have definitely dived into a little bit more of the consumer behavior coming out of the [00:27:45] pandemic[00:27:45] Ricardo Belmar: yeah. [00:27:46] Casey Golden: say which one of these things is gonna be what a retailer is gonna need to make it through that recession [00:27:51] Ricardo Belmar: yeah, and closely relating to that, we didn't predict the, wonky supply chain problems that were been continuous right throughout this year still. Right. I don't think we would've back at the, be when we recorded that episode, would've predicted that oh yeah.[00:28:04] Target and Walmart , are not gonna figure out how to get their inventory turned straightened out and they're gonna end up stuck with too much product. Right. We would never [00:28:10] Casey Golden: is what we do, right? Like, why are we still having, why are we still having issues?[00:28:14] Ricardo Belmar: Yeah, exactly. [00:28:15] Casey Golden: yeah, I agree.[00:28:16] Season 1 Highlights[00:28:16] Liza Amlani: Well, you know, I'll say that it's definitely a merchandising strategy issue, but you know, nobody asked me let's, let's talk about some highlights from season one. So Ricardo, , which was your favorite clubhouse discussion? I love these by the[00:28:31] Ricardo Belmar: Ah, oh yeah. Oh yeah. We, we really enjoy these too. I, I have to say, I think my favorite one was the one we did with Andy Laudato COO of the vitamin shop from his book, fostering innovation and, and how to build that culture of innovation in your IT shop. I think that one was my favorite one, just because it was such a wide variety of topics that we cover.[00:28:50] I mean, we asked Andy about his project management style. We talked about, how that impacts the corporate culture. There was some pretty clever tidbits in there that he talked about in terms of, how to consider how you hire people to align to that culture of innovation.[00:29:05] He talked about his hierarchy of IT needs and how you can get to earn the privilege to innovate, which I think was really clever. And then, one of my favorite, if I'm gonna pick catch phrases to come out of the season, that one had one of my favorites, which was be a diode that Andy had.[00:29:19] If you remember that one where he said, as the team manager, you're a diode, you take all the negative things that come to the team, those stop with you as the team leader. And you don't pass those on, but when you get all the good comments, you don't keep those, you pass those on to your team so they can all benefit from the, from the praise.[00:29:34] That one should, there should be a t-shirt for that one.[00:29:35] Liza Amlani: I love it [00:29:36] Casey Golden: Yeah. I actually took a lot of quotes from Andy. I love his perspective of project management and how to get tech in and actually deployed rather than running so many projects simultaneously. Almost nothing gets done in three years. I really haven't quoted anybody as much as I've quoted Andy from these podcasts, he is a gem. So everybody rewind, go back to that episode and [00:30:02] take a listen. It was really good.[00:30:06] Liza Amlani: I love that episode too. Casey, I have a question for you. Who was your most memorable guest speaker and who surprised you the most? It's a double whammy question.[00:30:16] Casey Golden: Ron Thurston and it's for both of them. There's probably no coincidence. He's been, he's been in. More than more, no, less than three, three of our episodes. We kicked off with Ron. And, and once you hear Ron advocate for the frontline store teams, you just can't help, but gain a better understanding of the people working in those roles and also feel motivated to wanna improve the work environment for , these associates.[00:30:42] I knew of him. I had met him on zoom. But that conversation, that podcast, I just completely fell in love with him. And I had no idea he had so much passion for these people until we started talking and like, we didn't stop talking. It was season one, episode one season one, episode two. It was just continued to bring in Ron that, he has this platform, like his voice needed to be out there and share his stories.[00:31:10] He's an amazing human, so definitely made it to my most memorable[00:31:16] Liza Amlani: I love Ron too. I love watching where he's gonna be next on his Airstream tour. That is it's super cool. And now I want an Airstream. Obviously. I know that. Yes, we all want it. . [00:31:26] Ricardo Belmar: Exactly.[00:31:27] Casey Golden: I hope it turns into documentary.[00:31:31] Liza Amlani: I love it. What about you, Ricardo? , which guest would you say? Did you learn the most from.[00:31:35] Ricardo Belmar: So, I have sort of an interesting way to think of, of that one. So as far as where I learned the most from , I think it was on the episode that we call the sea of academia. We actually had a couple guests there and, and big big shocker. Ron was one of those guests on that episode, too.[00:31:49] But we also had Gotham Vadakkepatt. Who's the, director of the center for retail transformation at George Mason university. And I, I think that was the one where I learned the most from, because it had a very different view that. I think all of us that talk about retail all the time, we don't often talk about the educational aspect of it and how that plays a role in creating the next generation of retail leaders.[00:32:09] And I think in that episode, I learned a lot about different perspectives on how to look at that. You know, the thing that sticks in my mind and that one is when Gotham said at the beginning of one of his classes in the semester, he asked his students, how many of you work in retail right now?[00:32:22] It was something like a big percentage of his class raised their hand and said, yeah, they work in retail and then he asked them, well, how many of you think you want to pursue a career in retail and all the hands went down.[00:32:31] None of them wanted to. But then by the end of his class, when he brought in a series of guest speakers to talk about different career journeys in retail, in different areas that you can work in in the industry. When he asked the question again at the end, at least half those hands came back up.[00:32:44] People finally realized, oh, there really is something interesting. It's not just what they thought was a harsh experience, I guess, working in those stores. And, and to me, it kind of ties together what Casey was just saying about the episodes we did with Ron. And advocating for those frontline store teams and this kind of gives a different spin to it.[00:33:01] So I, I came away learning a lot from that one and how there's an opportunity to influence, those future generation of retail leaders through those educational programs and through those university programs that they're going through to get them to come up with a, different new perspective on the industry, which I think oftentimes people in retail get stuck in their ways. And they're just used to doing things a certain way and you need that , new, new set of ideas to, to change things up.[00:33:26] Casey Golden: Yeah. I mean, one in six people on the planet, work in retail in some capacity. And for there not to be a way for you to go to school or go to college or university or specialize. In retail or commerce. I mean, that's kind of mind blowing the amount of education that, and curriculums that are popping up now at major universities to focus on digital transformation and retail , is so hopeful.[00:33:52] I feel that this is actually going to be. I, I feel like it's really about being respected as a career and getting those good salaries, being able to attract top tier talent. We have big problems to solve, and it's nice to see the universities turn this into an actual specialty.[00:34:11] Liza Amlani: I totally agree. And it's interesting cuz I also, I went to fashion school and got my degree in fashion. And it's so interesting to see how the programs have evolved to include, you know, things like data scientists or material scientists or textile innovation. So I love that episode two. Now tell us, do you have any special plans for season two?[00:34:31] What can we look forward to?[00:34:33] Ricardo Belmar: We'll have some surprises. We've been talking to some folks about a couple of unique segments we may try and do in season two. I'll try not to give away too much, but there'll be some people who might be familiar to listeners from season one who may come back and some who, who will be new to come and gives kinda like a, I'll call it a data angle to our conversations where we'll have one of these guests come in on a segment and it'll be related to the topic.[00:34:56] They might have an interesting data point or a research statistic that has come up and we'll spend a couple minutes talking about how that has an impact on the topic that week. So I think that that'll kind of mix things up a bit. It's almost kind, if you think of an ask me anything type of scenario, except it'll focus around a specific data theme.[00:35:15] So that should be a, a clever one and we'll have a new theme. You know, we, some folks maybe didn't realize we had a theme to the episodes that we set for season one. There was a structure to it. We were focusing in on digital transformation and innovation and, and people.[00:35:30] Which I think was the unique spin that we brought to those other two areas. So we'll have a new theme which we're not gonna spoil for season two, but we'll we'll definitely have a trailer coming out soon to give everybody an idea of what we're thinking for season two and what to expect.[00:35:43] Liza Amlani: Casey, any last thoughts? [00:35:45] Casey Golden: Yeah, our training wheels are off. You know, this started as a, I miss talking to everybody and we all kind of jumped in a room in clubhouse when it was super cool. I don't think anybody's logged into clubhouse for several months. So pretty exciting that, you know, this is season two's gonna be fresh you know, fully planned on purpose in real time, and it's gonna be interesting to see how we started to really like where we are now. And bringing some incredible guests that didn't have a clubhouse invitation and[00:36:21] Liza Amlani: I know[00:36:22] Ricardo Belmar: there is that [00:36:23] Yeah. Yeah. [00:36:24] Liza Amlani: they were, they were [00:36:25] hard to come. [00:36:26] Casey Golden: They were hard to [00:36:27] Ricardo Belmar: yeah, For a while, right? yeah. [00:36:28] yeah. [00:36:29] Casey Golden: we had some really great guests that [00:36:31] Ricardo Belmar: yeah.[00:36:31] Casey Golden: two.[00:36:37] Ricardo Belmar: yeah, right. It took a while for them. Yeah.[00:36:41] Liza Amlani: Yeah.[00:36:42] Ricardo Belmar: So listeners can expect more of those like the retail transformers series that we kicked off with April Sabral we'll do more of those in season two with some unique guests.[00:36:50] Liza Amlani: That's awesome. Well, thank you both for having [00:36:53] Casey Golden: And flip the script on you. [00:36:56] Liza Amlani: oh yeah, you should. [00:36:57] Casey Golden: in.[00:36:58] Liza Amlani: I'd love that, but thank you so much for having me and allowing me to put, put you guys in the hot seat, cuz you know, I love that. And I can't wait to do this again [00:37:08] I will. I will talk about all things merchandising and the retail silos. We need to break those down.[00:37:15] Casey Golden: they're gonna crash.[00:37:20] Ricardo Belmar: with us, Liza. Oh yeah. [00:37:21] Casey Golden: it will happen.[00:37:22] Ricardo Belmar: That's right. That's right. [00:37:23] so, Casey, I think that means we're ready to wrap this one[00:37:26] Casey Golden: It's a full wrap goodbye to season one[00:37:29] Ricardo Belmar: and season two awaits. [00:37:30] Show Close[00:37:30] Casey Golden: if you enjoy our show, please consider giving us that special five star rating and review on apple podcasts. Smash that subscribe button in your favorite podcast player so you don't miss a minute. Want to know more about what we talked about today? Take a look at the show notes for handy links and more deets.[00:37:49] I'm your cohost Casey Golden.[00:37:51] Ricardo Belmar: And if you'd like to learn more about us, follow us on Twitter at casey c golden and ricardo underscore belmar, or find us on LinkedIn. Be sure and follow the show on LinkedIn and on Twitter at retail razor, and on our YouTube channel for videos of each episode and some bonus content. I'm your host, Ricardo Belmar.[00:38:06] Casey Golden: Thanks for joining us. [00:38:07] Ricardo Belmar: And remember there's never been a better time to be in retail. If you cut through the clutter.[00:38:14] Until next time, this is the retail razor show. 

S1E12 – The Retail Avengers & The Future of Social CommerceWelcome to Season 1, Episode 12 of The Retail Razor Show!Social Commerce is one of the hottest (and noisiest!) topics in retail today! What exactly is it? How does livestreaming fit in? And what should retailers do to take advantage of this trend? As a retailer, how will you find the right platform to work with, and convert sales transactions? So many questions!The Retail Avengers team is back with two special guests to cut through the clutter in social commerce: First, Mohamed Amer, a member of multiple retail tech advisory boards, a RetailWire BrainTrust member, and former global head of strategic communications for consumer industries at SAP. Second, a friend of the Retail Avengers on Clubhouse, Darius Vasefi, co-founder and CEO of Visional Commerce, host of the Retail Tech podcast, and frequent contract chief product officer. From our Retail Avengers team, Brandon Rael, Shish Shridhar and Jeff Roster join. Plus, for the recap returning guest, Alicia Esposito, VP of Content for Retail Touchpoints and a fellow RETHINK Retail top retail influencer, joins us to spice things up with some not-to-miss items you will not see coming!Have you heard the news! We’re up to #20 on the Feedspot Top 60 Retail podcasts list, so please keep those 5-star reviews in Apple Podcasts coming! With your loyal help, we’ll be moving our way up the Top 20 in no time! https://blog.feedspot.com/retail_podcasts/Meet your hosts, helping you cut through the clutter in retail & retail tech:I’m Ricardo Belmar, a RETHINK Retail Top Retail Influencer for 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 lead partner marketing advisor for retail & consumer goods at Microsoft.And I’m Casey Golden, CEO of Luxlock. Obsessed with the customer relationship between the brand and the consumer. I've spent my career on the fashion and supply chain technology side of the business. Now I slay franken-stacks!The Retail Razor ShowFollow us on Twitter: https://bit.ly/TwRRazorConnect with us on LinkedIn: https://bit.ly/LI-RRazorJoin our club on Clubhouse: http://bit.ly/RRazorClubListen to us on Callin: https://bit.ly/RRCallinSubscribe on YouTube: https://bit.ly/RRShowYouTubeSubscribe on Apple Podcasts: https://bit.ly/RetailRazorShowRetail Razor Show Episode Page: https://bit.ly/RRShowPodHost → Ricardo Belmar,Follow on Twitter - https://bit.ly/twRBelmarConnect on LinkedIn - https://bit.ly/LIRBelmarRead my comments on RetailWire - https://bit.ly/RWRBelmarCo-host → Casey Golden,Follow on Twitter - https://bit.ly/twCaseyConnect on LinkedIn - https://bit.ly/LICaseyRead my comments on RetailWire - https://bit.ly/RWCaseyTRANSCRIPTS1E12 The Retail Avengers & The Future of Social Commerce[00:00:20] Introduction[00:00:20] Ricardo Belmar: Hello. Good morning. Good afternoon. And good evening, whatever time of day you're listening. Welcome. Welcome to season one episode 12 of the retail razor show. I'm your host, Ricardo Belmar, a RETHINK retail top retail influencer, and lead partner marketing advisor for retail and consumer goods at Microsoft.[00:00:36] Casey Golden: And I'm your co-host Casey golden CEO of Lux lock. I'm obsessed between the relationship of brands and consumers. The experience is everything. I spent my career on the fashion side and supply chain technology of the business. Now I'm slaying Franken stacks to power the future of commerce. [00:00:53] Ricardo Belmar: Well, Casey, this episode, we've got another amazing clubhouse discussion to share, and the topic is social commerce. Definitely one of the buzziest trends going on in retail right now. And of course, one of our 2022 predictions.[00:01:06] Casey Golden: not surprised that our predictions keep working out this year.[00:01:11] Ricardo Belmar: no kidding.[00:01:11] Casey Golden: really hit a groove and dug into fundamental challenges to find these opportunities. I hate that I missed this clubhouse session. It's just a real treat for our listeners.[00:01:21] Ricardo Belmar: Yes, indeed. It is. And keeping with last episodes example, we had two guests join the retail Avengers team this time in clubhouse. First, we had Mohamed Amer. Member of multiple retail tech advisory boards, a retail wire brain trust member, and former global head of strategic communications for consumer industries at SAP and second, a frequent friend of the retail Avengers on clubhouse, Darius Vasefi, a co-founder and CEO of visional commerce, host of the retail tech podcast and frequent contract chief product officer plus from our regular retail Avengers team, we had Brandon Rael, Shish Shridhar and Jeff Roster joining.[00:01:57] Casey Golden: You guys took a deep dive on the value of current social commerce platforms and really identifying what works, what doesn't, and how live streaming is a centerpiece to this equation. I can't wait to listen and come back here and chat some more about it. Plus, we've got a repeat visitor to the show.[00:02:15] Alicia Esposito from retail touchpoints, joining us for the recap.[00:02:18] Ricardo Belmar: And spoiler alert. Our recap will have a few surprise discussion points that listeners will not see coming. So stick around.[00:02:26] Casey Golden: I thought I was the one that takes us off script.[00:02:28] Ricardo Belmar: No, I can do it too. You know, we have there's equal hosting privileges and everything.[00:02:32] Casey Golden: In that case, let's go straight to the clubhouse session. Let's listen in to the Retail Avengers and the Future of Social Commerce. [00:02:44] Clubhouse Session[00:02:44] Ricardo Belmar: Welcome everyone to the Retail Razor club. Our session today is the Retail Avengers and the Future of Social Commerce. So let me move into doing some introductions here with the folks we have up on stage. I'm Ricardo Belmar. I founded the retail razor club here on clubhouse, and I've been in the retail tech side of the industry for a better part of the last two decades working for different technology providers and managed service providers.[00:03:08] Most recently joined Microsoft as a senior partner marketing advisor for retail and consumer goods. So I'm gonna move across the stage here. Darius, why don't you introduce yourself? [00:03:17] Darius Vasefi: Hey Ricardo. And everybody else good friends and the audience thanks for having me.[00:03:22] My name is Darius Vasefi. I am the co-founder CEO of a company called Visional Commerce. As well as a startup studio called Infini Ventures. My passion is e-commerce and retail, especially retail tech, the picks and shovels of what makes retail and e-commerce move forward. So look forward to our interesting conversation today.[00:03:42] Ricardo Belmar: All right, thanks. Darius, and we have another guest speaker today, Mohamed [00:03:45] Mohammed Amer: thank you very much, Ricardo. Mohamed Amer in Southern California Ventura area. And I've been in retail, retail technology for the past about two decades similar to you. And most of that time in the large enterprise space with with SAP. [00:04:02] Ricardo Belmar: Great. Thank you. Jeff. [00:04:03] Jeff Roster: Jeff Roster, former retail sector analyst for Gartner and IHL.[00:04:07] Now a cohost on This Week In Innovation and serving on several advisory boards in retail. [00:04:12] Ricardo Belmar: Right. Thanks Jeff. Shish. [00:04:14] Shish Shridhar: Good afternoon. Shish. I've been in retail for about 20 years working with retailers specifically around AI, IOT analytics. I'm currently the retail lead for Microsoft for Startups and I'm building out a portfolio of innovative, disruptive startups.[00:04:30] Thank you. [00:04:30] Ricardo Belmar: Thanks, Shish. And Brandon. [00:04:31] Brandon Rael: Well, everyone happy Friday. Brendan Rael, I'm up in the the Tristate New York area been in and around the retail consumer industry, my whole career, then made the shift over to the digital transformation work on the strategy side to help enable and empower retailers and consumer companies to accelerate growth and pivot to the new digital world we live in today.[00:04:48] Ricardo Belmar: All right. Great. Thanks Brandon. So what do we mean when we say social commerce? When you hear those words start thinking immediately about all of the big social media platforms, places like Facebook, Instagram, TikTok, Pinterest, even Twitter is now getting into the idea of social commerce. You're probably familiar with Facebook shops and Instagram as those have launched over recent years. And we also hear more about social commerce because of activities coming out of China.[00:05:15] And as it moves into Western countries, we hear about live streaming and other specialized platforms that maybe focus around particular retail segments, like apparel and all of these things play together to enable an ability to have commerce, just like you want on your e-commerce site, but natively within some kind of social networking platform.[00:05:34] So I wanted to share some stats just to put some of this into context, and then maybe we can go around and see what to everyone's reactions are to that. A number of these stats come from eMarketer. So for example, china's estimated social commerce sales are gonna be somewhere on the order of 315 billion, and social commerce will represent about 13% of all e-commerce sales in China. If we look at what's been happening in the us, e-marketer had an interesting forecast that this year we should see social commerce sales rise up to about 36 billion dollars, which is an increase of about 35% and will represent about 4.3% of all retail e-commerce sales.[00:06:10] let go around the stage here and just get everyone's reaction. Darius, wanna start with you. What, what do you think about those stats? [00:06:15] Darius Vasefi: So I think definitely the difference between China and the us, I is something that I've also heard.[00:06:21] Now one thing that I don't know as much about the details of what e-marketer means by social commerce is I guess one, one question that I would just like put out there, but I think if we make an assumption that they are talking about transactions made on some form of social media channel and then the definition of what do they think, what these social media channels is?[00:06:46] Another thing we can probably talk about later, but I think the numbers sound good. And actually, I mean, the us definitely makes sense. 4.3%. The sounds about right, because it's just getting started here. [00:06:59] Ricardo Belmar: And my understanding reading through the e-marketer report, they are considering these to be any transactions originating from social media platforms, which they view right now the leaders in that being Facebook, Instagram but also up and coming from Pinterest, Twitter and Snapchat. [00:07:13] Jeff Roster: What do we do with live streaming though? Is that, I mean, I know that is social commerce, but that really isn't the social platform. It's a digital media platform, but [00:07:21] Ricardo Belmar: yeah, I view live streaming, like you said, Jeff, as a hundred percent part of social commerce. Now some of that live streaming might originate from those social platforms that I could do a live stream through Instagram or Facebook.[00:07:33] Social Commerce or Social Network?[00:07:33] Ricardo Belmar: But also there are lots of options that have nothing to do with those networks that are native platforms that retailers can use for live streaming. I'm not clear myself how e-marketer is tracking those. But I thought, it was interesting to take a look at these stats and for us to consider do we think that's is that a reasonable number?[00:07:48] Do we think that it might grow faster than that? Do we think that's too aggressive? And you're right. It does depend on what we're including in that count.[00:07:55] Darius Vasefi: Yeah. The term social and the fact that it only has to take place on a social network is probably incomplete. And even looking towards 20, 25. [00:08:05] Shish Shridhar: I tend to agree with that. go on [00:08:08] Darius Vasefi: so yeah, that, that's basically what I wanted to throw in there is that if, that's the only channels that we're looking at for the definition of social commerce, I think it's not enough and it's gonna change and we'll probably come back and revisit it.[00:08:22] Brandon Rael: I, yeah. And Darius, and Shish, I completely agree. I think the culture and where China and, most of the Asian countries are with, with WeChat is everything is integrated with the one major platform, all social, all commerce, all interactions, all financial and transactions take place in one app centralized and seamless and real time and, and accelerated lightening speed.[00:08:42] Whereas we're just, we're finally embracing that paradigm shift and, you know, seeing the emergence of Instagram shop now capabilities and Facebook and TikTok shop now capabilities and live streaming. And it's starting to gain momentum, but China certainly has such a far advantage way ahead of the rest of the world, including the us.[00:08:57] Shish Shridhar: I tend to agree that, you know, the the social network platforms, the social media platforms is one aspect of it. But really the social aspect of shopping and all of the capabilities and technologies available today that enable social within, within shopping, I think is another element. And what I mean by that is one of the very early startups that I worked with, this was a few years ago. They built a platform where when you're researching a product in a store and you look at product feedback, you're not sure whether the feedback is, is fraud or not. [00:09:31] Rather you want to have feedback from your network. What does your network think about it? What do your friends think about it? And what they really built was this QR codes where when you scan it, it will filter out your network and their opinion about a product. And that was a social element to it as well.[00:09:50] Where there was that social trust element that was brought in that enabled you to make decisions on what product is good. And look at a trusted network to tell you this is good, or it's not, and, and give you some feedback. And that was the, the early one I saw a few years ago. And also a few years ago when smart mirrors were popular there were startups that were building network interfaces into the smart mirrors. So when you're trying out outfits virtually you could pretty much ping your network for opinions on it and, and ratings and rankings. And there was that social element to the shopping which was, which was sort of a physical and digital combination. The other thing that I also worked with this was a startup called spot.[00:10:37] They were looking at shopable media. So really looking at. You know, influencers and, and Instagram Pinterest feeds, and then using vision AI to detect products within either images of video. And when you're, when you're watching the video or looking at these streams from your network, you could actually find products and shop the products directly from the media.[00:11:03] So that is, again, something that's prevalent. And that is again, a capability that the social networks are adopting, but it doesn't have to be social networks. It could be on any media. And of course, the other element that I see as well as the, the chat bots chat bots are increasingly becoming a way in which, and as they're getting better, it is becoming a way in which shoppers can interface with a chat bot and find what they want, get recommendations and interact and engage through a chat Bott as well.[00:11:33] And I think all of these capabilities are not necessarily connected with a social media network, but do have a social aspect to it. And I kind of believe the same with live streaming as well. [00:11:46] Jeff Roster: Yeah. So really interesting shish, do you see then chat bots in that social commerce component.[00:11:52] And then what about call centers? [00:11:53] Shish Shridhar: Well, so call centers one of the developments that we've been seeing is that combination of chat bot and human elements in call centers. But at the same time, there is a chat bot that is listening and transcribing looking for questions, looking for the intent of the questions from customers, finding recommendations and providing it to the human who's at the call center to be able to provide recommendations and things like that.[00:12:21] So that's, again, one element that is seeing for call centers. [00:12:25] Mohammed Amer: So Ricardo, I kind of take a, a different avenue or out of when we're talking about social commerce, at least the way the numbers have been set up and looking at statistics. I believe also the, these are really social platforms, the way that we know most of us know social platforms, the Instagrams, the Facebooks and, and so.[00:12:47] And Twitter trying to get into that with their new shopping module. And, that's the same number that e-marketer was talking about that 36 billion this year with, which had surged 39% during the, the lockdown. So clearly they're looking at where people are spending their time.[00:13:07] And they're combining where you're spending your time, where you're getting, where you're comfortable and trust the platform. When we're online, there's kind of a risk element. When we're making a purchase, you're wondering, are you really getting what you want or not, but when you back that up by a platform or a social platform that you already trust, you've been using it, you're familiar with it.[00:13:30] It has a reputation then all of a sudden it takes some of that risk away. And it allows you to go on the early steps of you know, the metaverse where now you're, you're doing things that you would do in the real world, but now you're doing it in the, in a social platform. And shopping is a social activity.[00:13:49] It's as well as a functional thing that we all need to do. [00:13:53] Ricardo Belmar: I agree with you on that. What is social commerce trying to mimic for us? And in some ways I look at it as it's trying to take what was a, a straight e-commerce experience, which I think I would describe as somewhat a detached shopping experience because shopping is a social activity and it normally involves some human interaction, at least in the way that we're all used to.[00:14:14] Although you could make an argument about different age demographics and how they view what a social human shopping experience may be. But I see social commerce as trying to in effect, bridge a gap between taking what would've otherwise been e-commerce and making it a more as the words implies social, but therefore more, more human interaction in commerce.[00:14:32] So doing things like what we we've mentioned making media shoppable. There's some startups doing some dedicated I'll call them social networks. But I think maybe they're a little bit different. Me spoke is one that, that I see often where it's designed to allow you to shop any of the things you see in images or videos posted in the app.[00:14:51] And they actually link back to brands. So they have a connection that goes to a brand to help you shop directly from them. Because you see that item on someone you say, I want this and that's how you would be able to, to shop for it. So another way of looking at it, which I think is also interesting is that this is another mechanism to search for items. So if we think about search, and I think we've all heard stats anywhere from, you know, 65, 70, 80% of product searches people just naturally go to Amazon to search before they even go to Google in the search. But if you think about how often do you search for products on social media?[00:15:23] And I've seen some surveys that actually show that us as much as 70% of consumers will say they search for products. They wanna buy on Instagram and Facebook which tells me that that's almost as much as people use Amazon as their go to for product search. So if you're starting your search on social where do you go from there?[00:15:40] Do, do you want to, as a consumer immediately be able to buy when you find it there? Or do you wanna click through to an eCommerce site and have a more traditional, transactional interaction at that? What I think is interesting is these same surveys. It'll tell you, 70% of consumers start their search for products on Instagram or Facebook, and the same surveys ask, well, would you buy directly a product from within a platform like Facebook, Instagram, or Twitter, Pinterest, and so forth.[00:16:06] And the numbers drop. Then you see numbers like 30% say that of people will actively buy. But if you break it into demographics, then you say, well, what about millennials? Millennials will say more than 50% of them are willing to buy that way.[00:16:17] So I'll ask everyone what your impression of that is. [00:16:19] Defining social commerce vs e-commerce[00:16:19] Darius Vasefi: Okay. Sorry. Here, here's a question from what you actually mentioned, if I go to a website and I purchase an item based from a video that's on the website even if I can click on it and it can actually drill down, for example, a wardrobe in two different parts of it.[00:16:37] Are we considering that a social commerce? [00:16:41] Jeff Roster: I would not. I would say that's part of the website. That's that's classic to me as a classic [00:16:46] e-commerce [00:16:47] Ricardo Belmar: if it takes you to the website first. Yeah. From [00:16:49] Darius Vasefi: just because it's a video, just because it's a clickable video on a website. [00:16:54] Jeff Roster: Oh, wait a minute. What, whose website?[00:16:56] Yeah. What kind? [00:16:57] Darius Vasefi: That person's website. That brand's own web [00:17:00] web website.[00:17:00] Jeff Roster: That's e-commerce [00:17:01] Ricardo Belmar: yeah. I, I would, I agree. [00:17:02] Jeff Roster: It's their website's e-commerce [00:17:04] Darius Vasefi: okay. [00:17:04] Ricardo Belmar: Yeah. I, I think in this case, if you saw that video on Instagram and while you were watching it on Instagram, you click and buy it without having to click through to the brand's e-commerce site, then I'd consider that transaction as social commerce.[00:17:15] Jeff Roster: Exactly. I agree. [00:17:17] Darius Vasefi: Okay, but, so, so again, we're talking a little bit more definitions here. If you, if you see something on Instagram and it takes you to that brand's website and they make a purchase off Instagram, that's you don't, that's not considered social commerce.[00:17:35] Ricardo Belmar: If you have to click through to the brands e-commerce site, their, their existing e-commerce site, I, I would consider that a standard e-commerce.[00:17:42] That was just a click through the social post, [00:17:45] Darius Vasefi: even though it was [00:17:45] okay. [00:17:46] So it's a transaction since seems like it's the where the transaction actually happens is how we're [00:17:53] Jeff Roster: it's location. It's located on the eCommerce [00:17:55] website. Then it's eCommerce. If it's off the eCommerce website, then it's social. I would say even even the same video, I would think.[00:18:03] Ricardo Belmar: Yeah, I think in, in one instance, we're talking about a referral process, right? Where my click through from say a Facebook post referred me to the brand's website and that's where I completed the transaction. So in that scenario, I call that an e-commerce transaction, not a social, but if I was in a Facebook shop and I never have to leave that Facebook interface to complete the transaction that I would consider as social commerce [00:18:26] Jeff Roster: a hundred percent.[00:18:28] Ricardo Belmar: I'll give you some other interesting stats since we're on this point, and I'm glad you brought this up, Darius. If you think about a way to measure how valuable could this be? Right. How much could it grow ? There's one argument to be made that I'm, I'm reducing some friction in the process[00:18:40] if I can just complete that transaction natively in the social platform, I don't have to click through to an e-commerce site. I don't have to do any of the things I do on a normal e-commerce site to put payment information in or any of those things. So in a way, I've reduced the friction in completing that purchase.[00:18:54] I did find the following numbers kind of interesting. So if you were to track now this would be based on referrals, click throughs through social. So from Facebook or Twitter clicking through and if you were to measure what's the average transaction value of transactions came through those clickthroughs for the different social platforms. I think it's interesting to see which ones generate more valuable transactions. So I'll give you a few examples. From Facebook customers referred through Facebook, see an average order of $55. If you go to Twitter, the average value is $46 29 cents.[00:19:26] And it's worth noting that that Twitter click through rate for this type of commerce is about somewhere between one and 3%. If you are on Instagram and, and wanna know what's the, what's the average value of click through from Instagram, it's $65. So it's even higher than Facebook. And if you see a click through from a YouTube video, that's only about $37.[00:19:43] So there are differences today in the types of things people will click through within these different platforms.[00:19:47] Darius Vasefi: Yeah. That's a very interesting dis this, I guess differentiation. Definitely the product category and the pricing makes a difference. Especially like what I've seen personally on a lot of what is being sold in China. And on a lot of social live streaming, I guess I'm talking more about live streaming.[00:20:06] It's a lot of lower priced items. I have not seen any high priced considered purchases being sold yet on that, especially like the, the one too many, the public type of live streaming. And I don't know if that translates across all social or not [00:20:24] Jeff Roster: Darius in China, you're talking about or in here in the us, [00:20:27] Darius Vasefi: both, both.[00:20:29] I mean, if you, if you go to Amazon live right now, you go to Facebook, live shop, you'll see the kind of products that are being sold over there. [00:20:36] Jeff Roster: Now, I don't know enough about the China market to comment on that, that bit of nuance, but here in the us, I think we're still so, so early in this whole evolution of social commerce that I would expect the items that are really gonna push on social are gonna be fairly low priced, immediate kind of purchase engagements.[00:20:52] I think that we, as we evolve in that, I think that's gonna change pretty dramatically, but I just can't imagine a complex purchase being done through social. It can start the process and then lead to the website where there's more engagement [00:21:05] yet to be determined though.[00:21:06] What are consumers buying via social commerce?[00:21:06] Ricardo Belmar: Yeah. I think there is something to the category. I'll give you another a data point there. And I think this is us in 2020 apparel made up just under 22% of the total social commerce revenue. So a little over a fifth. Just thinking in terms of what items are people more inclined to buy in social commerce?[00:21:22] I view it as it needs to be more of an impulse buy? Something has to entice me either in the visual that I'm seeing, whether it's a photo or a video clip, or if it's a live stream, something about the way that product is shown or described has to make me wanna buy it right now in a slightly more enticing way than just looking at a product page on eCommerce and without having a desire to go physically see it and touch it in a store.[00:21:45] So I, I think it's an interesting thing to consider luxury items. How would luxury items do in this scenario? Do we think that there's a future for true luxury apparel, for example, or some of the more aspirational luxury brands selling significant numbers this way, or is it more, you know, maybe Darius to your point of what you see in China that it's more lower cost items?[00:22:07] Shish Shridhar: I would imagine that's, lower cost and also the target demographic I think is primarily gen Z. And from that perspective my opinion is lower cost and apparel seems like the most likely I see a point about, there's certain things you wanna try out and not necessarily the kind of thing you wanna buy on a social platform without touching it, seeing it, trying it out.[00:22:31] But I believe for low cost, fast fashion, that's probably a good fit. [00:22:37] Jeff Roster: But if you add in live streaming I think that changes, cuz I dang near bought a thousand dollars lens from BNH photo a hundred percent because of live streaming. Now I would've, you know, I have bought $2,000 lenses through chat and just the website because without trying 'em out.[00:22:52] But that live streaming is so sticky in that kind of a, that kind of an app. So you're basically just talking about a, digital sales engagement and that I absolutely can see becoming very high end.[00:23:03] Darius Vasefi: So from my, from my point of view that it depends on the format. There is two key formats for live streaming. One is the one to many, like which is the QVC style. You have one person setting up this show, highly curated and many people watching. Then there is the private live streaming, and I think that they're completely different and they're also different in the product category.[00:23:28] So that's what we do at visional is private live streaming. And we only focus on the top end or the considered purchases, things that are not just impulse purchases and were the advice of somebody, a human being on the other side makes the shopper not only buy something better, actually buy more buy a whole wardrobe instead of just buying a shirt when they thought they just wanted a shirt.[00:23:54] So I think it depends on, on the format, but there is definite potential for everything. [00:24:00] Ricardo Belmar: Yeah, that's a good point. I think I just saw a, a retail dive article that stitch fix is planning to beef up their one to one. Live video sessions as a way of increasing their sales. [00:24:09] Darius Vasefi: Yeah. But they're still working on.[00:24:11] So the, the challenge with stitch fix is that it's still an eCommerce company, so they are, I don't know how they're gonna handle, and I've, I've tried this actually with lulule lemon, which is another 4runner in trying live to bring live into the commerce. And basically what you're connecting with is somebody in their home, again, running through a catalog with you, they don't have products to show you.[00:24:34] Now, maybe stitch fix is gonna improve on that and actually have some products that people can look at. But if they're doing it from their home, there is no way they can have access to the inventory and the experience of the store. So that's something that I'm interested to learn how they do it.[00:24:52] Brandon Rael: I think there's a certain delicate balance between the highly pro high production value live streaming, but also remaining authentic with the micro influencer, real, real, real shoppers. So how do you balance those two together so that it's more authentic and it's really lifestyle driven approach versus, and has some level of production value?[00:25:10] I mean, TikTok it's is a fascinating platform, not so necessarily for live streaming, but just the amount of creativity and innovation that's coming out of there. The videos and just resonate the current generation of shoppers it's emerging. So yeah, I, I agree with Darius. I mean, the ones I've done at your home access to the physical store or least merging those two experiences together, it's a, it it's a delicate balance.[00:25:34] Mohammed Amer: And like in the example, I'm sorry, Darius. So just in example, that Jeff was mentioning the $1,000 lens from BNH you start out with, there is a, a comfort level of trust factor that he has with that company must have made some purchases before or their reputation or online reviews.[00:25:53] And you're more comfortable about making that high ticket purchase item, given that you can see the details about the product. You can ask questions performance, specs feedback and, and that's something, again that can be, can come to life very well in a video commerce setting [00:26:15] Jeff Roster: and Mohammed you're a hundred percent right[00:26:16] the best camera shop in America, in my opinion Excellent return policy, beautiful website super knowledgeable people, a hundred percent. You're a hundred percent, right. That's why that, that video streaming is so, so such a slam dunk for that organization. And by the way, the actual live streaming was, was pretty poor quality.[00:26:34] I, I think they literally probably just set it, set up a camera and out they were going nothing like what Darius is working with and, and developing, but just the concept alone was enough for me to say, wow, [00:26:45] Ricardo Belmar: I can really see how this is gonna work well. And a related point to that, that's making me think about Jeff, so this was already a trusted retail brand for you.[00:26:54] If I separate the live streaming from this, but if I just thinking of social commerce and its ability to add more merchants to it, right. What, what do we think is happening as far as returns, for example we, we know, you know, e-commerce has an issue with return rates and various product categories.[00:27:10] Don't you think that in social commerce, this could actually get worse in terms of how you're gonna handle returns?[00:27:15] Jeff Roster: I would think it might be maybe a little bit better other than other than apparel I, I just, I think the more, the more knowledge you get about a part or a lens or, or anything along those lines, hopefully the less returns you're gonna have other again than apparel, where it's about size and fit and look and all that sort of stuff.[00:27:32] I don't think it's a driver though. Ricardo. Yeah. I don't think, I don't think social commerce is a driver. [00:27:36] Ricardo Belmar: that's probably true. I guess what I'm thinking of is if you're searching for products in social commerce, well, I'll put it this way. It's not all that different from a problem you might have with Amazon marketplace sellers, where you do a search and you get a hundred different results.[00:27:50] Right. And they're from 99 different sellers you've never heard of, but how do you choose? Which one do you want? Same thing on, on any social commerce platform. If I'm searching by product and I see a big number of merchants come back. I don't know who any of them are. How am I gonna choose? And am I taking my chances when I pick one, if I say, decide to pick it on price, just like I would with a marketplace.[00:28:11] Am I gonna have an issue? If I have a problem with later, do I know that it's an authentic product? Am I gonna have an issue with, fake products in this space. Where is the quality control there? I'm curious what everybody thinks about these issues. [00:28:22] Darius Vasefi: So if we are talking specifically about returns I think definitely the more snap judgment is involved in the making of transaction the more the returns are gonna be probably. So if you are Again, I don't have exact data from any, places, but what I do know is that like, for us, when we've done sales, when you build a relationship with a person on the other end, actually the number of returns actually become less than really like the 50% that you're seeing in apparel on eCommerce.[00:28:53] So I dunno if that answers your question, Ricardo, or did I miss a part of it? [00:28:57] Live streaming makes it more social[00:28:57] Ricardo Belmar: No, I think you're. Getting it exactly at it. So for example, if I bring the live streaming component back into this, that having the ability to build the relationship first, which is how I'm viewing the live streaming component to this, that's gonna help, I believe in, in building that trust factor, building some, authenticity with the customer versus just scrolling through a series of product posts on a social platform, which is in, in some ways, almost the same thing that you'd be doing on just a standard e-commerce marketplace. You're just scrolling through a lot of products in a social platform. So there isn't anything additive. I would argue there that helps enhance trust or authenticity.[00:29:33] I'll throw another variable into this that we haven't talked about yet, because I think another thing that we see come up quite often in any discussion on social commerce is influencers, especially around live streaming. I'm sure everybody's seen that the crazy photos from China, where there are influencers standing in front of 500 different phones and ring lights of all these influencer videos being done to promote different products. So influencers have a role to play, I think, in this social commerce space where do you see that? You know, is this, I'll ask this, the question here. Is it more less, does it affect how retailers and brands should be viewing social commerce?[00:30:08] Mohammed Amer: So I I'm gonna bring in China in the, to address that question you know, in China's a outfit called little red book, how appropriate, huh. And they are doing a lot of you know, facilitating social commerce. And they're basically aimed at gen Z and millennials and they, they have even been able to live stream with Louiston.[00:30:32] So even, a luxury retailer is getting on board in that. And where I was getting to is their influencers are called key opinion leaders, KOLs, and they pair that with blog posts. So they, they, bring the personality, the influencer, the expertise, the live streaming, the product, and they they're creating an experience around, around all that in a social commerce factor.[00:31:00] Brandon Rael: Yeah, I think we are, again the, the outstanding point, there are light years ahead of the of the west, especially our country. We, we are just scratching the surface of social commerce and live streaming. This has been part of their culture and their, and their commerce operating models for, for almost a decade now.[00:31:16] And they had the technology, the infrastructure, the. I think the centralization of, of commerce via Wechat and, and Tencent and Alibaba really enables that to be possible. And there is really no disparate apps you need to go to, or different retail that, you know, go across. And that influencer model, it works so, so effectively in, in their culture.[00:31:36] And I think we'll, we'll get there eventually, but again, there's some, there's some regulatory factors to consider it as well. If you have a monopoly such as WeChat controlling everything.[00:31:44] The TikTok Effect[00:31:44] Ricardo Belmar: So what about platforms like TikTok, which I know Brandon, this is always a, a hot topic for you, what influence is TikTok having on this whole social commerce space? [00:31:53] Brandon Rael: Oh, you called me out. I see am I [00:31:55] Ricardo Belmar: know this is one of your favorites. Yeah. One of your favorite topics. [00:31:57] Brandon Rael: It is. I, I think there's just a fatigue overall with Facebook for many reasons and a fatigue almost with Instagram, cuz the lack of storytelling, everyone's showing the perfect state of the world and Instagram and I think TikTok is the algorithms built to, to match the trends and the, the news and and all the creator, the creators that come outta that, the innovations come outta that the retailers and brands have started to pay close attention to this and find ways to monetize and commercialize off of just the, the rapid expansion of TikTok as, as a presence in our culture. And it's not just gen Z and the millennials it's ing all the generations. And there has to be a way for retailers like Louiston and others to capitalize and jump on the bandwagon because it's here, it's here and it's serious day.[00:32:38] And I think we'll have a lot more momentum on, on side versus Facebook shopping or Instagram shop now capabilities. I think that those days are numbered. It's just the, the live streaming slash TikTok creative engines are, are often running. So I think they'll have, it'll have a significant presence and a significant factor and customers decision making, whether it's on the app or outside the app, or it's gonna be part of that customer journey for sure.[00:33:02] I think go across platforms. [00:33:03] Ricardo Belmar: Yeah. And we've seen Walmart do, was it two events now that they've done on TikTok? [00:33:07] Brandon Rael: Exactly. And they were probably the last retailer I thought would be on there, but we see we've underestimated Walmart for a decade now, but they like jet.com and the revenue Ascension eCommerce and their BOPIS and their digital first acceleration they could do.[00:33:21] And they have the power and they, and their capital do anything. And they proved it. [00:33:24] Shish Shridhar: Well, there was a attempt by Walmart and Microsoft to acquire TikTok. And I think there's a huge, influence there. I mean, the whole thing about short form video, I think that is driving a lot of engagement and it is becoming a big content platform, even though today I think it's still Instagram and Facebook, that's driving most of the sales but TikTok is from what I can tell is growing very fast. [00:33:50] Brandon Rael: Very true. [00:33:51] Ricardo Belmar: Yeah, I agree. And if you think of influencers on the platform and tie that back into the use of influencers for live streaming in this, in support of social commerce, I think that a TikTok of any of the platforms probably has the, the greatest growth potential.[00:34:05] Brandon Rael: Brands and retailers have to go where the, where the consumers are and where the consumer behaviors are. And the consumer, the consumers are engaging with content on TikTok or Instagram. That's where you need to be. And then you're, you know, obviously I think we haven't done our due diligence, so it has been studies on what the revenue potential is or opportunities are for the retailers.[00:34:22] But there is certainly a lot you can learn from this model and how you can leverage TikTok's growth and, just acceleration to grow your own revenues accelerations as well is go where go where the customers are. And they're not necessarily in a physical store or not necessarily in the mall any more they're engaging content on tikTok and Instagram.[00:34:38] Ricardo Belmar: Well, and, and to that point, if the retailer or a brand is gonna treat social commerce as if it were another channel, and I know there's probably a lot of people shaking their head and down the audience saying, oh, no, we're gonna talk about channels again. But at the end of the day even though consumers don't, think about channels.[00:34:52] I think it it's just a fact that retailers, brands, they, think in terms of channels because they have to know where to put their advertising money and where to put their marketing money, how they're gonna generate a campaign to target customers. And they need some kind of a framework to be able to, to characterize this.[00:35:07] Measuring success with social commerce[00:35:07] Ricardo Belmar: So I'm just gonna go with that for the moment and let's treat social commerce as a channel. And the reason I say that is, every brand and retailer wants to measure their activities in that channel. So if I look at social commerce and live streaming, other of course, than, understanding, what are the different analytics I'm looking for to help me understand whether I'm successful or not in social commerce and more importantly, whether my customers are there.[00:35:28] Darius Vasefi: So, I mean, as far as like live streaming for us, what we are looking at in, in our format is the number of appointments. What appointment actually translates into a purchase, the amount of the purchase, the repeat visit from that same customer, even to the same agent to the same store and the conversion the order, average order value.[00:35:50] And, you know, maybe the the maximum order value is really interesting. Also the type of products. So, I mean, all of these metrics are things that we have to be, measuring and monitoring. And then, of course customer acquisition costs is, when it gets to the marketing and what channels we go to .[00:36:06] Brandon Rael: I think that's the scalability is the factor here. I think the cost of acquiring new customers is significant Darius, but can that be mitigated somewhat with the the expansion and the growth of a TikTok or Instagram, where there is lower carrying costs of acquiring new customers, , the challenge is, how would you make the content authentic and, and satisfying enough to drive that conversion, to drive that engagement, to lead it into the actual, the shopping journey?[00:36:29] I think that traditional customer journey has been, was so fragmenting. And then now it's, now it's originally social commerce across many different paths and it's not too linear anymore. It may start in social commerce may end up in the store. It may start in the store and they can actually be engaging on the app or TikTok within the store itself.[00:36:44] And then they can final a decision. So all those customer journey touchpoint across, across the channels, digital and physical matter, like you said, it's about the editorial value. The conversion rates, the turns, everything we, everything you would consider from a eCommerce perspective, that would really change what we used to talk about from a retail perspective, inventory terms, gross margin percentage EBIDA, which all are very relevant by that customer journey.[00:37:08] It it's so, so significant different than it used to be. [00:37:11] Mohammed Amer: Yeah, it's a fractured buying journey and the attribution problem continues with now the multiple paths that are available and they can start anywhere. They can end anywhere, but social commerce, the way we defined it is it ends for sure within, that social platform. I think going where your targeted customer base that you're going after for that specific product where they spend their time, that's the biggest nut that you need to, to crack. And whether that ends up being TikTok, Instagram, Facebook, something else. And then, then you get to the content, creating the kind of content that, that attracts them that gives them the right information they need. And how do you convert that into an actual transaction and then the follow on after the sale to ensure that they're happy and talk well about it, .[00:38:03] Shish Shridhar: So one of the areas that I'm seeing a lot of spike in, in the startup world is the emergence of social commerce platforms. These have plugins to all the popular social media networks, so TikTok and Instagram and Facebook all of these, and as ones emerge, they will have connectors to it.[00:38:24] What really enables the brands to do is. Hook in their inventories and their product catalogs to it and enable creating embedable links to, to social media. So if I'm an influencer on Instagram or TikTok, I can, I can, I can embed products through the social commerce platform. It is akin to the Amazon associate tags where the attribution goes to the Amazon associate and they're paid a percentage.[00:38:56] So that same model has been applied to, to social commerce as well. And being able to find and engage with influencers through that social commerce platform. And, and that's something I'm seeing and emergence, and also the, the, not necessarily reliance on a single network, but really looking at whatever network that the influencer is on the brand is able to create that connector.[00:39:20] Alternate models[00:39:20] Ricardo Belmar: Yeah, that's, that's an interesting point there Shish. So we've been talking about, I would say a pretty foundational aspect around social commerce and where it's headed from brands and retailers perspective. I'm curious what everyone thinks is gonna happen in the startup community, or I think everybody up here on stage has some experience in some form or another talking to different retail tech startups.[00:39:40] Is social commerce and, and you just mentioned a number of examples, Shish, are there other areas besides those who think that social commerce is gonna see a lot of investment in, in retail tech? We we've had this conversation before about oftentimes seeing a lack of investment in retail tech, but is social commerce. One of those areas that may see a bigger share of that investment.[00:39:58] Jeff Roster: Well, bigger shares. It's a loaded, a loaded word. [00:40:00] That's I mean, it depends you can't the nanosecond, you start talking about artificial intelligence. You can't talk about bigger share, but that's because that share is so gigantic, is it right , for significant growths, Shish is gonna love to hear this, absolutely 100% and there's, there's very solid evidence then in, in the investment community.[00:40:18] But it's, it's gonna be nowhere near artificial intelligence. [00:40:22] Darius Vasefi: So on the startup side Ricardo, I, personally think that we're gonna see a major investment shift into the companies that enable the next I guess, generation of what we call or what we don't wanna call omnichannel retailing is where the direct and deep integration within the social channels and the brand's own experiences are gonna enable.[00:40:47] I think about as like the picks and shovels of making social commerce work and in, in general retail work, I mean, if you look, let's say at 20, 25, right, we're looking at 20, 25, do you think that there's gonna be any major retailer in 2025 that doesn't have some form of integration to at least a major social channels directly going into their inventory system.[00:41:12] And like the tracking and everything analytics,[00:41:15] Jeff Roster: I would say the answer to that is if, if you're saying, well, the all be the a hundred percent, they will all not be. I can think of TJ max. I doubt that ever happens. Probably two or three others, even in the tier ones, but the majority, as long as you say, the majority, [00:41:29] I'll I'll agree with you on that.[00:41:31] Darius Vasefi: I'll change majority. [00:41:32] Ricardo Belmar: If you think, for example, the existing integrations that Shopify has on their platform. To TikTok and other social platforms, you can tie, if you're Shopify merchant, you can tie all your product listings right off the bat in, into TikTok, Facebook, Instagram you know, if Twitter shops takes off, I'm sure they'll add that one later, but so yeah, I would have to say majority.[00:41:50] Yes, I would. I would agree with that. And actually, Jeff, you brought up like, like a TJ X, TJ max. So obviously those brands like them, they're not fans of e-commerce, but I, I wonder would they have a different mindset around social commerce only because, and I, and I'm thinking particularly of a brand like home goods, because home goods, in addition to living off of the treasure hunts, they already generate significant social traffic from people just posting about their finds and what they found at a given store. So do you think they would view social commerce differently than they view e-commerce? [00:42:24] Jeff Roster: No. And because it's the same issue, how do you, how do you have social commerce if you don't have a sustainable or a, a, a long term plan on inventory?[00:42:34] So posting about your finds. I mean, that's that's history. Hey, I, you know, look at this, look at this piece of data, you know, I found it's not, Hey, you can find, this could be a hundred percent wrong in that, but it's. [00:42:45] It's just such a, a far. [00:42:47] Ricardo Belmar: Yeah. What if you consider livestreaming ?[00:42:48] Mohammed Amer: The current [00:42:49] model?[00:42:50] Yeah. The current model that I agree with you, Jeff, the current model that TJM max Ross stores, those, kinds have, does not fit the models that we've been discussing and they don't have the infrastructure nor do they have the, the, the will to, to spend that kind of money and investment, because that will just upset the model that they currently have.[00:43:10] So I, I just don't think that that will work for them. [00:43:13] Brandon Rael: It won't work cuz they're the building, the treasure hunt and opportunistic merchandise and buys it's in the marketplace. They can't necessarily predict what's gonna be available in the next six months or, or anticipate demands on the, on the top trending items on, on, across the social channels. Where it could work is, is complicated to have the agility and flexibility to pivot their designs and, and meet the, the surging consumer demands a lot faster than a necessarily a discount or off price retailer could.[00:43:39] Maximum stores. [00:43:40] Jeff Roster: So I agree. So what would be interesting to see if somebody like a Costco pivots to a social commerce model, even though they are also sort of a treasure hunt, but I mean, I, I can think of about a couple thousand dollars worth of stuff I've bought over the years with no desire. My, my high end blender being, being the number one thing, just walking through, seeing the demonstration, boom, off we go.[00:44:00] Maybe that's a different type of retail that might really embrace social that you wouldn't necessarily think of. I could, I could, [00:44:05] Ricardo Belmar: yeah. You could especially see that in livestream scenario, right? Yeah. And the same way that you exist. Yeah, definitely. I think, I think the way I look at a TJX, you know, so, so they they introduced, I guess, was it right before the pandemic started on Marshall's e-commerce site where they positioned it as it was going to be special merchandise that was still gonna try to promote the flavor of the treasure hunt and that it wasn't gonna be the same thing, always available day in, day out on that site. And it, it speaks to me in terms of what, what if they look at limited drops and turned into events, where again, the live streaming model maybe helps in a one to many scenario there and, and they treat it that way. Which I, I agree, it's not the existing business model, right. It's a little bit of a pivot for them to do that, but still, maybe on brand. And that that's the way I'm thinking about it.[00:44:48] Darius Vasefi: So I, I think that this is a really interesting conversation, especially when you bring in TJ, max and home goods. We, we personally actually have done some experiments and those models actually work perfectly for what we do because the, the inventory is changing so fast. They can never keep up with it.[00:45:07] and the treasure hunt can really be enhanced with another human being, like doing it, helping you in the store. So it's a very interesting concept. And same thing applies to like flea markets, resale, used clothing, like stores, which is like really getting big. I think that's a, that's another very interesting side of the market for me, especially because that's like, you know, we could definitely make a difference in that.[00:45:31] Ricardo Belmar: It's very much like a newer version of a flash sale.[00:45:34] Mohammed Amer: Yeah. And, and your model Darius with the one on one is ideally suited for that, that type of an environment. It, it works as well in other environments, but where other models would not work, whether TJ Max or Ross Stores yours definitely would because you were bringing their shopper via video to that store to do, to go and do their treasure hunt.[00:45:58] And and that, that will make it happen. And, you know, you don't versus what we're discussing before about social commerce and the kind of investment and the visibility into inventory and the systems and so on.[00:46:09] Darius Vasefi: Yeah. I mean, outlets is another interesting concept, probably somewhat to that, or maybe not, but I know like, like Simon is really investing a lot into their outlets and how to bring eCommerce into their outlet malls and it's good to see that. So, and, and it goes to like what Jeff was saying is like that direct integration to the inventory and supply chain is is a lot harder to do when you get into these like highly unique and fast moving inventory type situations, [00:46:38] Brandon Rael: so how do you tangibly analyze the impact of this? Because that, that path of purchase is so dynamic right now, and it's so far from what the linear understanding we had of it five years ago, 10 years ago, even last year, it's, it's pivoting so quickly. [00:46:53] Ultimately it's about brand engagement and building trust and, and the relationships with, with products and, and also influencers. It may actually lead to a immediate conversion that lead to the customer, going to a store or, or shopping via eCommerce. It may lead to an engagement that leads to buying something months from now because of that, that experience they had via via social commerce and live streaming or TikTok videos.[00:47:15] Mohammed Amer: And that's why I wanna talk to retailers and they they're talking about, well, you know, e-commerce is giving us this or the website I'm gonna, you, you don't know, you don't really know you want, we need, we have this need to, to be certain about things, to have a number, to have be precise, we'll go 27.7%.[00:47:33] I mean, it, it's still a guessing game because you don't understand how to really attribute that you, you can get a direction, get an idea, but you, you never really are going to be a hundred percent confident of that, of the numbers that you think you're dealing with regarding the attribution.[00:47:50] And that exactly Brandon brings it to, you know, every, every moment that you're interacting the brand and the, and the shopper consumer, the potential shopper, it, it has to be done the way that you would like it. But again, it's not a one way communication mechanism anymore. It's interactive. There are influencers or opinion leaders that are now inserted in this and just have to have a, a broad brand message value proposition that you can then operationalize across those different points. [00:48:24] Ricardo Belmar: Yeah. I think those are excellent, excellent points. So we've had a really great discussion here on social commerce. We're gonna go ahead and close out the room and I'm gonna thank everybody up here on, on stage today. This has been a really great dive into the nuances of social commerce. We do expect the majority of retailers to be very much involved in some form of social commerce whether it's on one of the big social network platforms or whether it's engaging in live streaming because it's where the customers are. And you have to go where your customers are if you want to grow. [00:48:55] So with that again, thanks to all my speakers, thanks to the audience for joining us. [00:48:59] Deep Dive with Alicia Esposito[00:48:59] Ricardo Belmar: Welcome back retail, razor show listeners. We hope you enjoy that great clubhouse discussion on social commerce.[00:49:10] Casey Golden: Great discussion and incredibly disappointed I missed out on this one[00:49:14] Ricardo Belmar: Yeah, we definitely missed you on that one, Casey. But fortunately you get to be here for the special discussion with our special guest on this very special topic. That's a lot of specials I worked in there. Isn't it?[00:49:24] Casey Golden: we noticed, but with the voice made for radio, no one's complaining.[00:49:27] Ricardo Belmar: Oh, well, thank you. It was really special.[00:49:29] Casey Golden: voice made for radio, no, one's complaining . And on that note, let's introduce our extra special guest today. We have Alicia Esposito, VP of content at retail touchpoints. She's here with us. Let's talk some shop[00:49:42] Alicia Esposito: Hello everyone thanks for having me. [00:49:44] Ricardo Belmar: So, this is a fun one for us this week and a little bit out of our normal routine. We usually invite someone who was in the clubhouse discussion we just heard to come join us on the show, but this time Alicia, we thought this was a really good time to bring you back to the show. And I say back cuz you were on in our episode last time when we talked about Loyalty in the last clubhouse episode.[00:50:03] And plus I guess it was what, last month when I was on your show, retail remix, and we talked about social commerce, right. So this kind of feels a little bit like a part two to that discussion.[00:50:13] Alicia Esposito: exactly. Because there's so much to unpack and like, anytime you get me started on this topic, I can just go on and [00:50:18] Ricardo Belmar: Yeah. Yeah. We can go for hours, right?[00:50:21] Casey Golden: this is why we've never been on a call together.[00:50:27] Ricardo Belmar: Right. It it'll never [00:50:28] Casey Golden: eight [00:50:29] Ricardo Belmar: Yeah. We, we would never end. Yeah. Yeah. And, and like we've said before, I think the one comment we never get from listeners in our show is that, you know, if only you could make the episodes longer[00:50:39] Casey Golden: hours.[00:50:40] Alicia Esposito: I just need[00:50:42] Ricardo Belmar: Yeah, more content, more content. So obviously there's a lot to talk about. Cause social commerce is just so big. You know, where, how retailers and brands are gonna invest in it. I think it on, on your show Alicia I think we talked a little bit about live streaming too. Right. And how that relates into, social commerce and that's a worthy investment.[00:50:59] We see lots of folks making you know, I think we, we didn't quite touch on if there's an angle for retail media in, in social commerce, how do they all intersect? And when we were talking ahead of time, before , we were recording here, you brought up something super interesting, I think and maybe that's where we should start this conversation and that's, what are all the platforms that matter here.[00:51:18] In the clubhouse session, we talked about, what, I'll call it the big three. It's Facebook, Instagram, and TikTok, but they're not the only platforms. . And Alicia, you, you mentioned at least one that I had honestly kind of almost forgotten about. But, but we shouldn't right.[00:51:31] Alicia Esposito: Right. Poor Pinterest. Everybody forgets about them. and I think it's largely because there there's, this really close association with things like recipes with even home renovations and home decorating. But there is a really clear opportunity for commerce. I think it's just. They, they haven't, it feels like they haven't really gone all in, but what I find really interesting right now is recently they acquired the yes.[00:51:58] Which, you know, they're kind of seeing as the vehicle or the driver for. What they want their AI powered, highly curated shopping experience to look like they actually indicated, you know, this is a fashion app fashion platform, but we want to explore what this will look like in other categories. So I thought that was my first little hint of like, oh, they, it seems like they're gonna try and double down on this or, or really in invest in it.[00:52:26] And we also recently covered that they have a new CEO, which is huge. And as we dug deeper into Bill Ready's credentials, most recently, president of commerce payments and next billion users for Google, like huge[00:52:41] direct connection right there. Prior to that EVP and COO of PayPal. And also held roles at Braintree and Venmo and what I find interesting there very payment centric.[00:52:52] And as I think about the challenges around social commerce, I mean, we, we kind of chatted about this a little bit before we started recording, is that payment component, that payment experience is still very much disconnected and flawed. And that, you know, we talk about social commerce being a commerce moment inside of the platform.[00:53:13] And that's still very much not happening. A lot of it is redirects and clickthroughs, it's still very much not to the level where, people say oh, this is where it needs to be.[00:53:23] Ricardo Belmar: Yeah, that was one of the things we kept talking about in the clubhouse session too, is it's it's not like a, a thin veiled layer on top of eCommerce. It needs to be it's own commerce platform. So just to click through is not the same.[00:53:35] Casey Golden: payment makes it commerce.[00:53:37] Ricardo Belmar: Yeah.[00:53:38] Alicia Esposito: Right. Exactly. you need to pay, you[00:53:41] need to be able to pay for [00:53:42] Casey Golden: That is the commerce piece. Otherwise is it really commerce?[00:53:45] Alicia Esposito: Discovery, inspiration. Sure. I mean, Pinterest is great because it is a content driven platform and we're seeing this really powerful. Intersection of content and commerce. The ones that invest in content are creating those moments that people feel inspired to act, but they may be inspired, but if you're not giving them that next[00:54:05] Ricardo Belmar: Yeah, but without the[00:54:06] Alicia Esposito: and easily, it's like, all right, well now[00:54:08] Ricardo Belmar: yeah, you can't convert to a sale. If there's no payment processing,[00:54:11] Casey Golden: Yeah. I think it's really interesting. Pinterest has always done a really great job of pulling back the right content when you're looking for like Google images. So, by them bringing somebody over with so deep over on the Google side I think it could be completely detrimental to Google shopping[00:54:29] Ricardo Belmar: yeah.[00:54:30] Casey Golden: was able to take over Google shopping because Google shopping is not a great discovery or search experience.[00:54:37] And Pinterest has always been really great at a search experience and discovery. So.[00:54:41] Ricardo Belmar: Yeah.[00:54:42] Alicia Esposito: is funny. You say that because I know they've been doing a lot of announcements. They being Google around how they're improving their visual search capabilities and how they're trying to make that more curated. AR and digital Tryon capabilities. So it seems like they're almost working in parallel of each other.[00:55:00] Right now. I'm trying to kind of find that right. Mix of commerce capabilities for their businesses. So it'll, it'll be interesting to see how it all plays[00:55:08] Ricardo Belmar: Everybody wants to converge, I think on the right formula and flavor for social commerce. And, you know, it's interesting, you bring, you bring up Google, right. But I think Google has another one of these platforms that are big, but seems to get left out of the social commerce and live streaming conversation.[00:55:23] And that's YouTube. YouTube is at the end of the day, the king of, of video platforms. But I don't think we usually think of YouTube when we start having live streaming conversations, focused on commerce, because again, and Casey you're gonna say the same thing, it's where's the payments.[00:55:38] where's the payment part of the commerce equation. . And [00:55:40] Casey Golden: Where's inventory. Where's the[00:55:42] Ricardo Belmar: Yeah. And[00:55:43] Casey Golden: payment. Like I see a lot of it as ad.[00:55:45] Ricardo Belmar: yeah. Yeah. It's still designed and originally geared towards driving a click through to complete a transaction on an e-commerce property rather than being the commerce transaction. We throw around terms like shoppable video. And shoppable images, meaning, or by definition, it's not a click through, .[00:56:03] If I see the item I wanna buy, if I'm clicking it, I expect to be taken to a payment mode and immediately complete a transaction. I always like to look at those and say, well, let's assume that the interface is there for that. And they've integrated the payment processing. What's the rest of the purchase experience look like for the customer. How does the customer know exactly who they're buying it from?[00:56:22] In that scenario and what's the post purchase experience like? So let's say I, I order it that way. How am I finding out how long it's gonna take to ship to me? And when I do get it, if it's not right, how do I handle a return? Who am I returning it to? How do I connect with that business to, process that return.[00:56:38] Alicia Esposito: Like, if it happens through Instagram, would it be like an Instagram DM, like, or, or do they create that direct link to the branded e-com site? Which personally I would recommend, because then you're kind of in this little box of Instagram, which we all know how that, that has turned out for some folks in the past.[00:56:55] It's it requires a lot of orchestration. And I think to your point, Ricardo, around what does that final selection and payment process look like? I mean, I can't tell you how many times I'm still clicking on Instagram ads. I feel like I'm picking on Instagram. I'm sorry. On social [00:57:11] Casey Golden: apologize. [00:57:14] Alicia Esposito: It's a beautiful item.[00:57:16] I get, so I'm like, oh, I gotta check this out, click it outta stock, cross the board. It's not even like, oh, it's not my size. It's just completely outta[00:57:23] Ricardo Belmar: Yeah. Yeah. There's no inventory connect.[00:57:25] Alicia Esposito: how, how is this still happening? And I know. You have to manage all the content with like the buys. And I know it's complicated, but , how are we expecting these brands to really master that commerce experience?[00:57:36] If they can't get the core of what makes commerce seamless and good that's not even nailed yet,[00:57:43] Casey Golden: Instagram doesn't make money off of the conversion. They make money off of the traffic and, and when you don't have accountability for like the actual end result. because they can't control it and they didn't build it. And that's not how they monetize. They're not making a percentage of net sales.[00:58:01] They're making money off of impressions and clickthroughs whether or not somebody buys it or not. I mean, I see a lot, I feel like the last 10 years, like literally it's a million versions of P.[00:58:14] Alicia Esposito: Oh, my gosh, you're bringing me back.[00:58:19] Ricardo Belmar: Wow.[00:58:19] Alicia Esposito: that one.[00:58:20] Casey Golden: It's a million versions of and we haven't moved on to the next stage of integration with inventory, universal carts, the commerce piece.[00:58:30] Ricardo Belmar: Yeah. Yeah. and then just to throw another factor , out there, how about making it more personalized? Shouldn't this somehow facilitate making it a more personalized shopping experience?[00:58:39] Casey Golden: There's enough data to know the difference between me, Alicia and you. It just doesn't[00:58:44] Ricardo Belmar: right,[00:58:47] Casey Golden: seem to get put together in a way that can distinguish one product from the next. One preference from the next, it'll be interesting because the yeses was built for, to focus on building AI for fashion to make it personalized using AI, coming from stitch fix, which boast the best, a fashion AI in the world. So it'll be interesting to.[00:59:12] Alicia Esposito: I guess my follow up question, there would be like, is this going to be data that these platforms hold onto and kind of keep hostage from bran and retailers? Or is this gonna be something that they open up? Because I know there have been qualms about and issues around the depth of data that these platforms provide and how sometimes that prohibits brands from creating that seamless.[00:59:36] That we're talking about. I don't know the answer. I'm not as[00:59:38] like deep dive [00:59:39] Ricardo Belmar: it's a who owns the customer in that transaction. Right? Who is it? Are, are you a Instagram? Or Pinterest customer, or are you the retailer's customer at that point? Who, you know, who are you completing the transaction with and to the shopper. Who does it look like you're doing the transaction with, you know, forget who it is on the back end, but what does it look like to that customer who's benefiting, which brand is benefiting from that customer's experience?[01:00:01] For better or worse, if it goes well, or if it doesn't go well, who's the customer either praising or blaming for how well that transaction goes and who gets control over that. .[01:00:08] Casey Golden: Blaming is a really good there because a lot of e-commerce stores have close to, 30% returns. So whether or not you're, they're making these social commerce experiences and platforms, their business model, isn't based off of the net result because it's really high return rates[01:00:28] Ricardo Belmar: Yeah. [01:00:29] Casey Golden: and they don't wanna deal with customer service.[01:00:31] They don't wanna deal with returns. They don't wanna make have to go into their pockets if the customer decided not to keep. I think that there's gonna have to be a, a lot more, the brands are adopting technology at a rate right now that I feel a lot of these social commerce platforms are going to have to step up to provide better integrations and better performance because the brands are getting savvy and they're getting better digital tech stacks.[01:00:59] And they're starting to have more of that direct to consumer. Experience. I think we have to remember a lot of retail has traditionally been not only physical. It's also been whole [01:01:10] Ricardo Belmar: That's true. I'll add another variable to that. So, I mean, all of the things that we're talking about here on, on the challenges side of the equation, part of me says, if you are a really large retailer, where, where normally we would say, oh, that gives them an advantage because they've got more resources to throw at it to solve this, this problem.[01:01:28] Maybe that's not the case in this, maybe because of these challenges and because of all the, the size of these social platforms and the amount of data and, and the intricacies, like the returns piece of it, maybe if you're a smaller or midsize retailer, it might actually be easier for you to get in the middle of this social commerce and take advantage of it to gain customer mind share, [01:01:47] And to build on that customer relationship in a way that's, you can do faster and, and easier than some of the big guys. I often feel the same way with live streaming that in some ways it's easier for the smaller brands to take advantage of live streaming than it is for the larger ones.[01:02:01] And maybe that helps them build on, you know, whether they're building on momentum of a, of a shop local move Or they're just building local community, cuz they're a small store. But they have interesting curated products. It might actually be easier. I don't know. What do you think?[01:02:14] Casey Golden: I think that I'm gonna add onto that. So I can, we can go back to Alicia here for this because Pinterest has the SMB.[01:02:20] They have the Etsy creators bus, the small to medium size businesses. Their CPM is not atrocious. I don't know anyone that will even work on a brand, a fashion brand's media spend. They're not spending at least $60,000 a month.[01:02:40] I don't know anybody that will even work on the account. And that's like a bare minimum. These SMBs can't afford that, but Pinterest already has that customer base and they could really edge out an area for SMBs to actually be able to compete and ha and. because you can't really play on Instagram ads with, you know, a 10 to $20,000 budget.[01:03:05] Like it's not moving your needle.[01:03:06] Alicia Esposito: Right. Well, and I've also seen a lot of a lot of negative reactions to Instagram, really trying to be a video first platform now, like they are FA go figure go figure. They're like, but you're a photo platform and like their, their whole business, their bread and butter is creating content, right?[01:03:28] Like I'm talking smaller brands or even influencers and content creators. So they're kind of throwing, throwing the whole toolkit that, these, these entities individuals or brands have spent years trying to build out and perfect. And they're basically like, all right, well just video now. Some people hate video.[01:03:49] Sometimes I don't wanna, I don't wanna look at video. I think sometimes the best Instagram content is a very nicely curated photo opportunities. So I think that that point you made around Pinterest being able to own. that sweet spot own the SMB own. The, the scaling brands I think is a really interesting one.[01:04:11] I'm curious if they're gonna lean into that or not.[01:04:13] Casey Golden: I feel that there's a, a really good alignment between Pinterest and Etsy.[01:04:17] Alicia Esposito: Mm-hmm[01:04:18] Ricardo Belmar: that's a good point.[01:04:19] Casey Golden: Still a little bit shocked on like why they're not the same company[01:04:23] Alicia Esposito: I mean, maybe give it a few weeks. Who knows? but like, there are so many interesting acquisitions[01:04:28] happening, right? [01:04:29] Ricardo Belmar: with some really cool combinations here.[01:04:32] Alicia Esposito: right. Or even a strategic partnership. Right. Like and I'm also curious why, like, they're not trying to make more of a connection to the big commerces, the Shopify, because like, that's, that's their core as well.[01:04:45] And I think it ties back to your point, Ricardo, that, you know, these smaller organizations, they really lean into content and creative as a way to reach their audience, connect with them. They, they know what their people like, you know what I mean? Like they have that, deep relationship, but they also have the They may not have the capacity to scale as quickly or, or funnel as much money into advertising, but they can test, they can stand up some pretty cool services and experiences relatively quickly.[01:05:17] They can test something on Instagram and be like, you know what? Instagram's not right for us. Let's just focus on TikTok and Pinterest. Like they can make those moves in a way that I think the bigger brands can't, especially as we think about. Okay. We have the branded account and then we have the individual store levels and we have X number of stores and who's managing these accounts and oh, oh, these associates are doing live streams.[01:05:40] They have access to all like it, it becomes like this, this big ball of complexity as you kind of get into the, how are we going to test these different, these different offerings?[01:05:51] Casey Golden: So I think it, it's gonna be really interesting to see what Pinterest might be able to do while Instagram's figuring out that whole video, because the only videos I see on Instagram are.[01:06:04] TikTok videos,[01:06:05] Ricardo Belmar: Yeah, they're just repurposed. Yeah. They're[01:06:07] Alicia Esposito: Oh, don't get me into the repurposing conversation.[01:06:10] Ricardo Belmar: that second whole that's another episode. I think that's like the that's part three and four of the social commerce discussion.[01:06:19] Casey Golden: huge opportunity there to, you know, move up a couple lanes, coming around the corner here.[01:06:27] Ricardo Belmar: Yep. So I, I guess we're kind of concluding here that everybody should watch Pinterest as sort of the dark horse that might upend the whole social commerce field and retailers should pay attention. Not kind of forget about them. The way we, we almost did until at Alicia reminded us[01:06:42] Alicia Esposito: Glad to be of[01:06:44] Ricardo Belmar: Yeah. Particularly if you're in that SMB retail space. And I'm, still gonna throw out too, let's not forget about YouTube. They've gotta figure out how they're gonna convert that into more of a social commerce platform. It, it's almost there not quite, but it, it seems like the base is there and the, raw materials are there to, to make it work.[01:07:00] So we'll see how that goes. Well, Alicia, this has been yet another fabulous discussion. I'm so glad you're able to join us today.[01:07:07] Alicia Esposito: yeah, me too. Thanks for inviting me.[01:07:09] Ricardo Belmar: Well, Casey, I think on that note it's probably time to call this one a wrap.[01:07:13] Casey Golden: That it is more to come.[01:07:15] Show Close[01:07:15] Casey Golden: if you enjoy our show, please consider giving us that special five star rating and review on apple podcasts. Smash that subscribe button in your favorite podcast player so you don't miss a minute. Want to know more about what we talked about today? Take a look at the show notes for handy links and more deets.[01:07:34] I'm your cohost Casey Golden.[01:07:36] Ricardo Belmar: And if you'd like to learn more about us, follow us on Twitter at casey c golden and ricardo underscore belmar, or find us on LinkedIn. Be sure and follow the show on LinkedIn and on Twitter at retail razor, and on our YouTube channel for videos of each episode and some bonus content. I'm your host, Ricardo Belmar.[01:07:51] Casey Golden: Thanks for joining us. [01:07:52] Ricardo Belmar: And remember there's never been a better time to be in retail. If you cut through the clutter.[01:07:59] Until next time, this is the retail razor show. 

S1E11 – The Retail Avengers & The Legions of LoyaltyWelcome to Season 1, Episode 11 of The Retail Razor Show!As a retailer transforming your business post-pandemic, where do you stand on customer loyalty and loyalty programs?The Retail Avengers team is back for a topic so big, and so challenging, we brought in TWO special guests to tackle the future of loyalty in retail: Erin Raese, co-founder of Loyalty 360, a cutting-edge association for research, best practices, and networking opportunities for loyalty practitioners, and now the global SVP of revenue for Annex Cloud; and Alicia Esposito, VP of Content for Retail Touchpoints and a fellow RETHINK Retail top retail influencer!Together the team covers a wide range of loyalty topics, while hosts Ricardo & Casey wrap up with a few key thoughts on the latest technology trends driving the future of customer loyalty. Don’t be surprised if they dig into web3, NFTs, and crypto before the end of this pod!Have you heard the news! We’re up to #20 on the Feedspot Top 60 Retail podcasts list, so please keep those 5-star reviews in Apple Podcasts coming! With your loyal help, we’ll be moving our way up the Top 20 in no time! https://blog.feedspot.com/retail_podcasts/Meet your hosts, helping you cut through the clutter in retail and retail techI’m Ricardo Belmar, a RETHINK Retail Top Retail Influencer for 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 lead partner marketing advisor for retail & consumer goods at Microsoft.And I’m Casey Golden, CEO of Luxlock. Obsessed with the customer relationship between the brand and the consumer. I've spent my career on the fashion and supply chain technology side of the business. Now I slay franken-stacks!The Retail Razor ShowFollow us on Twitter: https://bit.ly/TwRRazorConnect with us on LinkedIn: https://bit.ly/LI-RRazorJoin our club on Clubhouse: http://bit.ly/RRazorClubListen to us on Callin: https://bit.ly/RRCallinSubscribe on YouTube: https://bit.ly/RRShowYouTubeSubscribe on Apple Podcasts: https://bit.ly/RetailRazorShowRetail Razor Show Episode Page: https://bit.ly/RRShowPodHost → Ricardo Belmar,Follow on Twitter - https://bit.ly/twRBelmarConnect on LinkedIn - https://bit.ly/LIRBelmarRead my comments on RetailWire - https://bit.ly/RWRBelmarCo-host → Casey Golden,Follow on Twitter - https://bit.ly/twCaseyConnect on LinkedIn - https://bit.ly/LICaseyRead my comments on RetailWire - https://bit.ly/RWCaseyTRANSCRIPTS1E11 The Retail Avengers & The Legions of Loyalty [00:00:20] Show Intro[00:00:20] Ricardo Belmar: Hello. Good morning. Good afternoon. And good evening, whatever time of day you're listening. Welcome. Welcome to season one episode 11 of the Retail Razor Show. I'm your host Ricardo Belmar a two years in a row, RETHINK Retail top retail influencer and lead partner marketing advisor for retail and consumer goods at Microsoft.[00:00:38] Casey Golden: And I'm your co-host Casey Golden CEO of Lux lock. I've been obsessed with the relationship between the brand and the consumer. The experience is everything. I spent my career on the fashion and supply chain side of the business. Now I'm slaying Franken stacks to power the future of commerce.[00:00:53] Ricardo Belmar: So Casey, we are back to another Clubhouse session. This time, the topic was loyalty. Understanding and building customer loyalty, both with, and without loyalty programs. And keeping with our recent themes on innovation and leadership, our Retail Avengers crew brought in not one but two leading experts on the subject of loyalty to really dive into how loyalty needs to transform in the industry.[00:01:16] Casey Golden: This was another really killer clubhouse discussion. I'm a retention girl. So really building that loyalty and you're right. It, it was so big. We had to bring in two guests. First, we had co-founder of loyalty 360, a cutting-edge association for research, best practices, and networking opportunities for loyalty practitioners, and now the global SVP of revenue for annex cloud, Erin Raese. And second, we had Alicia Esposito, VP of content for Retail Touchpoints and a RETHINK Retail top retail influencer as well. This one really dials it up for a few notches. As we cover a lot of ground in the loyalty space. [00:01:57] Ricardo Belmar: Yeah, 100% and loyalty is a tricky topic going from, you know, how to make your best customers become loyal customers that are also advocates of your brand, not just loyal shoppers to having free versus paid loyalty programs to grow your brand. To consumer relationships and coming outta the pandemic, this field is really changing. Lifetime customer value is something every brand and retailer has to look at now as part of their growth plans. And you have to build more loyal customers. If you wanna see that metric go up.[00:02:24] Casey Golden: Yeah, spoiler alert. You'd be surprised how dramatically loyalty has changed for consumers since the start of this pandemic, and how that has impacted how retailers and brands use the customer data that they have. seen a rise in the paid memberships, like you mentioned for loyalty program pricing, personal services as a tier that's being productized that we used to kind of just keep secret.[00:02:46] I think it's 80, 86% of adults belong to at least one loyalty program, but managing multiple is increasingly difficult. It has to be more about price. With honey providing that instant cash back or coupon codes. So grab your notebooks. This is gonna be a great discussion to really start getting the, the wheels turning on how to drive this and create the value because emotion is still a very important factor to driving loyalty.[00:03:16] And that doesn't even consider how new technology is going to change loyalty, even more going forward [00:03:21] Ricardo Belmar: Yeah, that is so true. So I remember, like 75% of US consumers reported new shopping behaviors since the pandemic started and 50% of consumers globally saying they switched brands during the pandemic. This is definitely one of our more meaty topics for discussion. So let's not keep our listeners waiting. We'll be back here to layer on a few game changing ideas for loyalty that we didn't have time for in the clubhouse session. But first let's give a listen to the Retail Avengers and the legions of loyalty. [00:03:52] Clubhouse Session[00:03:52] Ricardo Belmar: And welcome everyone to the Retail Razor room. We're back today with a couple of special guests that we'll introduce in a few moments. Our topic today is the future of loyalty. And let's get started with some introductions.[00:04:04] I'll kick that off I'm Ricardo Belmar. I started the retail razor club here on clubhouse. I've been in retail tech for the better part of the last two decades working for managed service providers, technology providers most recently joined Microsoft as a senior partner marketing advisor for retail, and I've also done some advisory work for other retail tech startups in the past.[00:04:25] So I've got a lot of fun experiences helping retailers implement technology and digital transformation. I'm gonna move through the list here starting with one of our special guests this week. Erin Raese, why don't you introduce yourself?[00:04:38] Erin Raese: Hi everybody. This is Erin Reese. Thank you so much for having me for a couple of decades now on the vendor side selling different technologies and services. And then back in 2008, I co-founded an organization called loyalty 360, and the whole idea was to bring people together around the concept of loyalty, not necessarily programmatic loyalty, but the, the concept of, Hey, we all need long loyal, profitable customers in order to succeed.[00:05:04] So I'm excited to be here , and learn from you all. [00:05:07] Ricardo Belmar: Great. Thanks, Erin. We're really pleased to have you here this week. Jeff. [00:05:11] Jeff Roster: Jeff Roster, former Gartner and IHL retail sector analyst now co-host of this week in innovation. [00:05:16] Ricardo Belmar: Great. Thanks Jeff. Shish[00:05:17] Shish Shridhar: good afternoon. Shish I'm part of Microsoft for startups.[00:05:21] I'm the retail lead and I'm creating a portfolio retail tech startups been in Microsoft for 24 years working primarily retail, consumer goods with a focus on AI and IOT. Thank you. [00:05:33] Ricardo Belmar: Great. Thanks Shish, Brandon. [00:05:35] Brandon Rael: Thanks Ricardo. Great to be back after the hiatus Brandon Rael I've been in and around the retail consumer sector, it's my entire career.[00:05:41] Having worked for some fortune 100 retailers directly in their merchandising and planning and fashion teams. And now I've migrated over to the business transformation and digital transformation side, to help drive outstanding customer experiences and, and revenue growth.[00:05:54] Thanks again. [00:05:55] Ricardo Belmar: . Thanks Brandon .Casey? [00:05:57] Casey Golden: Hi, I'm Casey golden. I'm the founder of LuxLock a retail experience platform. We mobilize a digital workforce and allow everybody to shop live with a stylist online. All about the luxury experiences on my end. Bridged all the enterprise software and had about every single job in a fashion house.[00:06:16] So happy to be here as always. Thank you so much. [00:06:20] Ricardo Belmar: Thanks Casey, Trevor! [00:06:21] Trevor Sumner: Hey everybody. I'm Trevor Sumner. I'm the CEO of perch. Perch is interactive digital engagement platform in store. So you can think of it as digital signage, although digital signage is terrible.[00:06:32] What's great about what we do is we use computer vision to automatically detect that click stream about what actually happens in the shelf and the types of content and promotions that actually change cut shopper behavior at the shelf, including loyalty.[00:06:45] So excited to talk about this topic today. [00:06:47] Ricardo Belmar: Great. Thanks Trevor. And last but not least, another special guest, Alicia.[00:06:51] Alicia Esposito: Hello everyone. I'm Alicia Esposito. I'm the director of content and new media for Retail TouchPoints. We're a online media network and producer of retail events. Customer loyalty has been a very big topic of coverage for us over the past few weeks, we actually did some new research around it.[00:07:11] So I'm excited to dig into some of the trends, hear what other folks are hearing, and of course get some some new trends and best practices. Thanks for having me. [00:07:21] Ricardo Belmar: Great. Thanks everyone. Thanks to all our speakers. Our topic this week, again, we're gonna talk about the future of loyalty and retail and loyalty programs.[00:07:30] The Loyalty Dynamic from the Pandemic[00:07:30] Ricardo Belmar: A good place for us to start is with some interesting stats around loyalty and where things are today. In fact, during the height of the pandemic, we see numbers along the lines of 50% or more consumers saying that they switched brands or considered switching brands throughout the pandemic most likely given to stock out considerations when they couldn't find their favorite brand.[00:07:51] But in my mind, it's fair to say that one of the major issues going forward is that brand loyalty that consumers have shown in the past, may be up for grabs again, in the sense that there's been more of a willingness now to try new brands and recognize that you don't always have to have that, that brand loyalty.[00:08:07] And of course this may vary by age demographics and other factors, but I think that's something to consider. Other points that I have found noteworthy is stats like 75% of consumers saying they have new shopping behaviors. You know, a lot of that also is going to impact their expression of brand loyalty.[00:08:23] And then I know of recent studies have shown retailers reporting that when they have fee-based loyalty programs, whether we're talking to extreme versions like an Amazon prime or Walmart plus or CVS' Carepass, those loyalty members are worth as much as four X or more in terms of lifetime customer value to the retailer as compared to non-members. So definitely some incentives there for that.[00:08:45] I'd like to kick things off and Alicia, I'm gonna go to you first, because I know you've got some interesting studies that you guys have recently published what retailers are saying about their loyalty program. So I thought you might have some interesting facts to share with us. [00:08:57] Alicia Esposito: Yeah, a absolutely.[00:08:59] And we actually just published a benchmark survey, essentially covering some new realities around customer acquisition. Some of the issues or challenges that retailers faced in terms of customer retention. So kind of looking for those new opportunities, but most importantly, the gaps that retailers have seen over the past year.[00:09:21] And there's a really interesting juxtaposition that we saw. So from an acquisition standpoint, obviously digital was huge for them. 58% said they gained new e-commerce customers over the past 18 months. So they invested more in those digital engagement and digital acquisition tools, which I think kind of is in line with what the broader industry has been saying.[00:09:44] But what I thought was interesting for loyalty programs specifically, Is that we actually saw a bit of a year over year shift when we were looking at total revenue generated by loyalty program members, which, there's always that benchmark data point around how more loyal customers buy more frequently.[00:10:04] They have higher basket sizes, et cetera. So in twenty twenty, twenty two percent of retailers said 50% or more of revenue came from loyalty program members in 2021 that dropped to 8%. So I think it kind of speaks to your point, Ricardo, around that brand switching that took place over the course of the pandemic and our findings also point to out of stocks and overall supply chain and delivery issues, being that big pain point from a retention perspective.[00:10:35] So even though they get that acquisition, there's kind of a bit of a gap, right. And being able to fulfill that brand promise. Looking a bit more closely into those loyalty programs specifically. We saw general loyalty programs, pretty much status quo in terms of the benefits, you know purchase discounts and points were the top two tactics, but some really interesting movement in the way of premium loyalty programs.[00:11:00] So I'm not sure if we're gonna be getting into that a little bit later, but we saw things like free gifts with purchase being widely implemented, but sadly not as much movement in the more high value, in my opinion, offering such as services you know, guided selling that those richer engagements that I think really have a true impact.[00:11:19] So I know I just kind of jammed a lot out there, but really, really interesting times, like you said, those shifts that took place over the past 18 months in the way of brand loyalty and changing brands. But definitely a lot of opportunity I think moving forward. [00:11:33] Ricardo Belmar: Thanks. Alicia has a lot of good data points to unpack there.[00:11:38] I wanna ask Erin what your thoughts are on that and how that may, or may not may be in sync with other factors that you may be seeing.[00:11:45] Erin Raese: Thank you. Yeah, we are. We're seeing some of the same things. I mean, certainly the, the supply chain has affected so many people and left a lot of brands reeling a bit and where we're coaching our clients. It was through the whole thing, make sure you're, utilizing your loyalty initiatives and staying connected to those customers because if they did have to leave for whatever reason you have that as a tool to bring them back.[00:12:11] And on the premium side, we, see premium. But we typically will guide toward Really, why do you want to do it? And perhaps using it more surgically than as a blanket, because it may make sense for a particular segment of your audience, but not all. And then I guess the third with retail in particular, especially when we're looking forward the discounts obviously have, have been out there for a long time, and are associated more with loyalty programs and such, and talking more and more to people and they seem to really be grasping this.[00:12:46] I think also because of the third party data going away how do I get more of that data and how do I use that data to build my relationships and, and try trying to get away from the discounts. I think everybody's realizing that so much discounting has obviously hurt the bottom line and there's fatigue.[00:13:04] And so can I turn this around and build more stronger emotional bonds with my customers? And by doing that, can I begin to raise the price a little bit and can I provide a value that's different. [00:13:18] Loyalty Tactics & Benefits[00:13:18] Ricardo Belmar: So with that, let's talk a little more about tactics in loyalty programs, in terms of, there's always a lot of discussion of what consumers say they want in loyalty versus what retailers either think consumers want, or what the benefits the retailer wants to see from the loyalty program.[00:13:34] So I'll open this up to everybody on the panel. I have some thoughts here, but I'll, I'll let everybody else jump in here. I mean, what do you think are tactics? You, you don't see enough of today, but feel we should see more of them tomorrow just based on the history of loyalty programs and what you feel works or doesn't work.[00:13:50] Trevor Sumner: So one thing that's interesting in balancing these competing desires and goals, you mentioned CVS and care pass. You know, one of the things I, I do think that value is, is the key thing to a loyalty program. And, you know, especially in a broad range of segments, not at a, you know, a Gucci or Chanel or Macy's necessarily, but definitely at the, at the grocery stores or CVS, and one of the big ways that you can continue to do that is by promoting private label.[00:14:17] So CVS care pass, which you mentioned it gives you a 20% discount, 20% discount on private label products. Right? And I think loyalty increasingly will be adapted to promote private label products, because that is a tactic being used by all retailers to capture more margin. Which also gives them the ability to offer better discounts.[00:14:38] And one of the things that we're seeing in, in a push to private label is I was talking to a supplement provider who has a very large retail partnership. And one of the things they talk about is yes, that first sale happens at the retailer, but the refill happens usually off the side of the retailer, right?[00:14:55] So if you own the private label, you can own the full life cycle value of the client, which is why private label and loyalty becomes so entwined in private label that I think you're gonna see a lot more of that tied together. [00:15:08] Brandon Rael: Great points, Trevor don't mind jumping in here. I think we've seen that movement to that direct to consumer model, especially with Nike, who are taking ownership of the brand ownership, of the experience, ownership of that personalization imperative to, to drive what the experiences as the customers are looking for to gather only the insights and to really offer things that the customers want based on their preferences and the behaviors.[00:15:31] So that private label proposition is a big one. And I also think the direct consumer model is is an open, open landscape for brands to engage and to provide great experiences to customers. [00:15:43] Ricardo Belmar: That's an interesting point. As far as how private label can be intertwined with loyalty, given that we know a consumers really expect to be rewarded for a loyalty program.[00:15:52] So what better way from the retailer's point of view, and to offer that reward on a private label where presumably if they've done the private label correctly, there's more margin, there's more room to offer a discount. I always find it interesting in a lot of studies that get published about this, that the expectation is consumers want number one discounts, better pricing from being on loyalty. And there's either a hesitation from a lot of retailers to offer that. And of course, to Trevor, Brendan, to your points, private label is a good mechanism in which to offer that. But let's go a little deeper in this one, too. I'm curious what everyone thinks about loyalty tactics, other than discounts and price and where you think that's going.[00:16:29] So for example, gap announced their loyalty program that's cross brand. So it's one unified program across gap stores, banana Republic, Athleta and Old Navy. And one of the interesting options on there are using your points to generate charitable donations to charities that gap works with, and that I believe gaps comment when they announce this is that they heard their customers voices on how they care about what the retailer's contribution to the world is and that's one way that they're giving back. So what do you think about tactics like that as an enticement in a loyalty program.[00:17:03] Shish Shridhar: So one of the things you mentioned just now about social impact and brands really driving that is I think one of those areas that I'm seeing a lot of in the startup world, for example, and working with a company called Sparrow, that's doing exactly that they're providing this API so that brands and retailers can really embed that capability into transactions and enable shoppers to be able to select charities of their choice and, and really have that social impact element really stand out with the brand.[00:17:34] The other one that I think is key and we are probably not seeing enough of is personalization. And I would say hyperpersonalization this is along the lines of, what maybe Netflix is doing or Spotify is doing where the personalization, the relevance of the content for the customer is really what draws or, or defines that loyalty.[00:17:57] I think that is an element that a lot of retailers and brands should be doing more of. And this is really to do with the data ,data across all of the channels and pulling it all together and, and driving more than just segmentation, but going very hyper personal in, in providing offers and experiences that are personal and relevant to the customer.[00:18:20] And that really reduces the churn. And I think that's, that's an element that has a lot of potential the advances in, in data and AI is making this even more real and more impactful than it has before. And then of course the other element being, the gamification aspect where there that continuous engagement with that data enables brain to be continuously keeping that connection alive.[00:18:47] Brandon Rael: Add to those points. It's the relationship and the brand and the consumer is, is the paramount here. We all know that shipping or free shipping is losing some game and some aspects discounts or just loyalty points that result in lower price of discounts could be losing somebody as well.[00:19:02] So it's that gamification, that experiences exclusivity factor that if you're a member, if you're a member, you actually reap the benefits of being member. So membership has its privileges with the old ad from American express. I think that's very applicable in today's day and age, where brands want engage and retain their, their top customers.[00:19:18] Casey Golden: hundred percent, really believe in providing time well spent and just really creating, giving people what they want, you know, do you want 20% off or do you want a soul cycle session? And I think that there's gonna be a lot more experiential marketing opportunities opening up. Luxury brands have been doing it for hundreds of years.[00:19:37] I think it's about time that it comes down the funnel so that everybody starts being able to get spoiled by these brands rather than spend the money on Facebook. Just start spending the money on your customers. Candle's not that expensive for your birthday, especially if you buy 2 million of them.[00:19:53] Trevor Sumner: So , Ricardo, you started off with talking about giving away to charity. I'm investing in this interesting company called Griffin. And what they do is as you spend money on Starbucks or a retailer a certain portion of those funds end up getting invested in stock in that company.[00:20:12] So I think there's some interesting dynamics here. I mean, it's really early stage and I just think it's fascinating, right? Re as opposed to offering, you know, some type of discount that hurts your bottom line, you think about this as an executive, right? Like instead you build a loyal following that holds your stock, which increases your stock price, which is great for, you know executive compensation, right?[00:20:34] So that's one piece of it. But the second piece of it is, this goes to a little bit towards the money side of the house and thinking of it as an appreciating asset, which also that asset is tied directly into the brand and brand building. And one of the things that they've been able to do, whereas Robin hood, and a lot of these stock trading companies they've been able to appeal to a young male audience they've been able to unlock a younger female audience.[00:21:01] And I think that's really kind of exciting thinking through, on a demographic basis, you know, what are different needs from a loyalty perspective and what can be motivations to drive different behaviors that are both good for the corporation but also great for the shopper and your customers.[00:21:17] Ricardo Belmar: Yeah. That's a great point. And I find that example you have of the basically turning the loyalty into an investment opportunity is a really interesting one. What we're all really saying is. Loyalty has to move to, we can use a word like experiential, but I'm gonna stay away from that for the moment and say, instead, it, it just has to be about something other than discounts.[00:21:36] We, we know that consumers love discounts that ultimately price does matter in the end, but it's not the only thing. Right. You can get benefit and deliver value to the customer in a loyalty program without having to exclusively rely on discounts. The social aspect that the gap is doing the investment model that Trevor, you just mentioned, those are great examples.[00:21:55] Transactional to Emotional Loyalty [00:21:55] Ricardo Belmar: I'm gonna bring up another example. One that I think is really useful is what about loyalty programs that are in some way related. Let's say that because I'm retailer a knows they have customers with an affinity to retailer B. What if they both had some sort of connection between their loyalty programs?[00:22:12] What could you do there that could add more value that customers would then therefore want to be part of both loyalty programs?[00:22:20] Casey Golden: A hundred percent. There's such a huge overlap across brands in the entire lifestyle. Being able to collab, cross collaborate, and partner to be able to serve the customer. There's such an opportunity to be able to give customers something that actually delights them whether or not that's a coffee or a bottle of bubbles or.[00:22:44] Even a new product from a different brand that this brand thought that you might like, and it's non-competitive I think being able to spend more money together keeps everybody's bottom line a lot more green. [00:22:56] Alicia Esposito: I love that point, Casey. And I think it helps tell a much richer story too, from a marketing and engagement perspective too. Because we're zooming out. We're not thinking about, just about this very specific experience the customer is having in my store or on my e-commerce site. It is the bigger picture of what they experience every day of their lives. Right. And that encompasses so many different things, so many different brands.[00:23:23] There are so many opportunities. I think about the day in the life of, you know, you're a target customer, where does she go? Or he go. What are the different interfaces that they engage with, whether they're at the gym or on their commute, or, in a mall.[00:23:37] Or, or sitting at home. There are more opportunities in the media perspective too. So I think it just opens up so many more opportunities for co-creation and for innovation through collaboration. [00:23:48] Casey Golden: Yeah. I mean, right now we have two customers, one is evening wear and another one is hair jewelry.[00:23:56] So it's like ets for, for grownups. Right. Love it. And we also have a, the hair salon and Saks. So all three clients essentially if you spend $250 on one website or you spend $50 on a website with one of the brands, then you get a blowout at one of the Saks salons, the salon project. And so they're collaborating because they're both clients, we want them to share customers. It's non-competitive. If you're buying a dress, you're getting your hair done. You're buying shampoo conditioner. A berret. Fact is, is $65 ponytail, $70 shampoo and a $4,000 dress. It's the same customer. So I think that these marketplaces have really opened up another world where maybe you don't need to go into a multi-brand retailer as much, if more of the brands actually start connecting and leveraging each other.[00:24:47] And I think technology is gonna be, what's gonna make that happen. [00:24:51] Brandon Rael: Obviously echo sentiments that we challenge our clients to open up their silos, to become more holistic, look at the customers, one channel, one experience. Now we can challenge these brands to service this customer with offerings and, and benefits and lifestyle enhancements that this cross brand cross company collaboration is a, win-win not only for the customer for the brand.[00:25:12] So why not capitalize that customer coming to your department store or the mall and provide those experiences they're seeking.[00:25:18] Erin Raese: Well, what that begins to do is it, it changes it from being more transactional as well to more emotional. And we really we're having this conversation on loyalty for about 30 minutes.[00:25:29] Now, I noticed that we really haven't talked about what makes people loyal is that emotional aspect. And, and that's what turns you away from the, the discounts and, and gives you more elasticity with your pricing as well. [00:25:42] Ricardo Belmar: Yeah. I love that point about the emotional connection, because isn't that really why the retailer wants to have this loyalty program and wants to have more customers in it is to create a better bond to the brand with the customer.[00:25:53] And I think if you don't have that emotional connection, which in my opinion, price, discount alone is not going to move the needle on. Then how loyal are they really, are you really just then growing a loyalty program for the sake of large numbers that you just have a lot of people in it, but are they really doing anything for you?[00:26:09] Ultimately your goal should be to get a better lifetime customer value out of every member that joins that loyalty program? One of my favorite loyalty program, examples, is Ulta Beauty. When I last looked in one of their annual reports, something on the order of what is it, 75% between 70 of a 90% of their best customers, 9 98.[00:26:26] Wow. It's even even high 98. Coming from loyalty members, right? [00:26:30] Erin Raese: 98% of their transactions. That's unbelievable are, are loyalty. I think [00:26:34] Ricardo Belmar: that's unbelievable. Wow. That's just amazing. [00:26:36] Brandon Rael: That's amazing. [00:26:37] Trevor Sumner: And why, what do they get?[00:26:39] Brandon Rael: Yeah. What does Ulta provide that makes them come back for more? That's the, really the question, what differentiates them versus Sephora? [00:26:44] Erin Raese: Well, the story behind Ulta is remember they started as a discounter and then they started their loyalty program and people weren't allowed then to get discounts unless they joined the loyalty program.[00:26:55] So they were trying to move upstream as an organization overall. And that was really from the beginning. And then now that they've been established in doing this for years it, it still is that way. So if you want to get extra value, you wanna get any kind of benefits. You have to be part of the program.[00:27:11] And so they made their program really synonymous with their brand and they get a variety of additional benefit. So there's, there's services, there's other options. There's, early access, depending on, on the type of customer you are. So a lot of extra I think we were kind of going in that direction with this conversation at one point, but there's these, what can you deliver as a retailer that that's extra service or extra support of customers yeah.[00:27:38] Is what an Ulta is doing in some of the other retailers like a Nordstrom doing as well. [00:27:43] Trevor Sumner: Yeah. But I think it's interesting that again, it leads with discounts and value, right? And I do think that that's a big part of the story. Even though there, it, it kind of detracts some lifetime value because you're reducing margin on a per transaction basis.[00:27:55] Value, I think being the best at value, like we're trying to find clever ways to not discount and keep the margins up. And there are clever ways that people are doing it. But I think if you're great at the value story, that that enough is a success. And I think that some of the future around is, we talk about marketplaces, but I think like one of the underlying technologies that's really fascinating right now is just what's going on in FinTech and transaction processing and, and enabling skew level data.[00:28:21] It's All About the Data[00:28:21] Trevor Sumner: We talk about retailers collaborating to provide discounting across them, but you could also, with the death of the cookie, right, start thinking about how you can share data, get better first party transaction data as to what consumers want and share that data as a, as a value in your loyalty program and, and understanding of the customer base.[00:28:41] So I think there's a bunch of stuff that's gonna happen where retailers are gonna combine in interesting ways and underlying a lot of this is that a lot of retailers will become banks and get into a finTech stack. [00:28:53] Ricardo Belmar: And you see that as potentially an added service value to a loyalty program, for example.[00:28:58] Trevor Sumner: Absolutely right, because you're taking part of the margin of the transaction. But more importantly, you're connecting the, all the, collecting all the transaction data as well both in store to online, all of it together. And so that data is huge. And once you have that data, you can start sharing it in interesting ways.[00:29:16] So like Walmart and Sam's club and all these different, kind of properties that you own, but even in an extended way across your brands, like a gap and Old Navy bath and body works, et cetera. But then maybe even cross, like you could create models where, you could create some, Hey, I've got this mobile number, which is Trevor's mobile number and you ping it.[00:29:36] And Walmart tells you what Trevor likes to buy and shares that data in some interesting way. Now, I don't think retailers will naturally do that. In some open fashion, because they're very proprietary about that, but there's some interesting ways you could collaborate. [00:29:47] The question is of course, how do you get data? And, we talk about a AI machine learning. And whenever I see a technology company with AI and ML, it's like, well, what's your data advantage, right.[00:29:58] And I think that's gonna be something that that, that we should really be looking at, not just in the. The technology for analyzing the data, but how do retailers and brands get access to new data streams that give them a proprietary advantage? And I think there's gonna be a lot that happens in the next five years around that.[00:30:19] And you're gonna see in just interesting partnerships and acquisitions really just solely associated with data. [00:30:25] Erin Raese: loyalty programs can't do it all. But if you think about loyalty and the loyalty concept at its core, and you stop thinking about it as points and discounts and all of that, you actually can begin to collect that kind of information.[00:30:41] So you use the loyalty, call it a club, call it an initiative or something is if you give me your information, I promise to give you a better experience, cuz then you have that. And there's loyalty technologies that are out there that have the ability to take in that information, allow you to action on any data point, any combination of data points and they can collect it from any one of your technology.[00:31:07] Partners and, be like a backbone to connect everything. And they also have some of them also have social aspects. So you can track people's behavior around social. If you wanted to, recognize the fact that they were talking about your brand somewhere, or if you wanted to bring in your influencers into the mix and, and do something special for them.[00:31:27] So there, there are some that are out there that can actually make this. And loyalty is one of those places that can help. I'm not, I know there's a lot more to it. I'm not trying to oversimplify, but but it, there is an opportunity to look at loyalty a little differently. [00:31:39] Ricardo Belmar: Yeah. I agree with that and you know, certainly not the least of which is the elimination of this reliance on, third party data like cookies that we all know are going to be going away and, forcing a requirement for more first party data, which obviously loyalty programs are a great source to drive that.[00:31:54] But one of the things I can certainly expect to see much better results from over the next few years. And as we're thinking of 2025 and how retailers are gonna leverage first party data be able to personalize better, feed that back into loyalty programs, to define those more unique experiences they can offer to the most loyal customers.[00:32:13] I think that will happen. There are solutions today that I could point to that talk about how they're using, Trevor, your point, AI and ML to pull together and, and recognize customers within a program, which, let's take an extreme case where a customer is signed up for a loyalty program with a retailer a year ago, and then doesn't remember they signed up, you know, did some interactions with the retailer and then maybe signs up again with a different email address. A retailer wants a system where the AI or the machine learning can actually figure out, you know what, this is the same customer.[00:32:43] So let's merge that data and build an even better profile about that customer. I think Erin, you mentioned the social listening aspect and how you could also connect the dots between what those customers are saying in social. So you certainly expect a better understanding of the customer as your loyalty programs, ask those customers to put in a, a link to their Twitter account or their Instagram. So you do get an understanding, what kinds of things do they talk about? And if they mention your brand, then you can connect those dots back into that profile that your loyalty program is building for this customer. Then let's say they're in the store.[00:33:16] And I think we haven't talked too much about how the loyalty program can help you in store. So I'll throw out a couple of points there. I'm thinking about one is something that Trevor has talked about in this forum before and how you interact with merchandise in the store, through sensors and, and other computer vision types of applications.[00:33:33] If I can know something about that customer or let's say it's not even directly manipulating the merchandise. Let's not forget we have ideally, really well trained staff in that store. And those frontline workers are engaging with this customer. And now let's give them access to some of the loyalty information hopefully not in a creepy, mysterious way, but in a way that they acknowledge to the customer that they're opening up this type of access in a manner that helps them better serve that customer.[00:34:00] So now your loyalty program is feeding data into those store associates, so they can better interact with the customer and hopefully provide an even larger transaction value out out of that interaction. I think all of these things relate and, I feel, we haven't gotten to a discussion yet, which I, I did want to get us to.[00:34:17] And before the end of the hour here and how we can tie in loyalty in the future to what's happening in store, as well as online. I'll come back to that. [00:34:24] Trevor Sumner: All right. One other piece that that also is, if you get to know your, your loyal customers really well, how can you actually profile them in a way that you can then better target new customers,[00:34:36] Ricardo Belmar: right. That's right. And that, yeah. Use that as a model to improve your targeting. Absolutely. [00:34:41] Trevor Sumner: Totally. I download the app now, you know, everywhere I go.[00:34:44] Right, right. You know, the things that I do and now you can do lookalike type audiences. And again, really understand the behaviors that drive new client acquisition as well. [00:34:52] Ricardo Belmar:[00:34:52] Favorite Loyalty Examples[00:34:52] Ricardo Belmar: 1 thing that makes me think about that I'm gonna ask this to everybody up on the stage here, if I were to ask you right now in today's loyalty programs, what retailer do you like that does successfully create that emotional connection through experiences or other tactics they provide within that loyalty program?[00:35:07] Jeff Roster: REI, much to my wife's chagrin . [00:35:11] Ricardo Belmar: What specifically, Jeff, are you thinking that REI does well? [00:35:13] Jeff Roster: Just, you know, just an ongoing reasonably placed communication about what's happening, [00:35:18] You know, based on season. So we're just finishing up the summer season getting ready for, for ski season, things like that.[00:35:25] It's not really a discount program, but it's a co-op model. So the more money you spend, the more you get back, kind of a deal. It's just a good environment. [00:35:33] Trevor Sumner: And also I think it's very interest driven and it's a membership, right?[00:35:37] And it feels like, it feels like you're part of a community and it's part of a community that stands for something. And, so there's an identity there that is much more than the very value oriented discount play that I'm still a great advocate for. [00:35:53] Jeff Roster: Yeah, not a lot of, not a lot of, discount when you talk about REI that's for sure.[00:35:57] Casey Golden: You know, it's the weirdest thing. I have been a Mac cosmetic customer since I saw Ru Paul the first time when I was like 17 years old and they have a recycling program where you bring six empty containers and then you get to pick out something for free. It's the only thing I really recycle and I've been doing it for over 20 years.[00:36:21] I only recently started exploring other brands because I always got amazing service and I never bought eyeshadow, lipstick, or any of these things because I just recycled them. I have to say that's like the only loyalty program that has literally been in place for so many years. That did definitely work on me.[00:36:42] But I feel like there's so much more V I P experiences. I don't think it's a loyalty program at Equinox. I think I just have like VIP access to certain stuff. And some other brands where you've just gone up a tier. [00:36:55] But, I don't think that, you know, there's no points or anything like that, you know, [00:36:58] Jeff Roster: that's that's loyalty though. Yeah, that's the, absolutely.[00:37:01] Casey Golden: Yeah. I mean, they're just very unstructured, [00:37:03] Ricardo Belmar: but it still gives you that, that VIP status. So in a sense, the program is working and that it makes you feel like you're getting some special value out of it. [00:37:11] Casey Golden: Exactly. I mean, I know that they're done very manually.[00:37:14] You have to remind them who you are. , [00:37:18] Ricardo Belmar: there's a case for how technology [00:37:19] Casey Golden: a lot of time[00:37:20] Brandon Rael: it's painful, [00:37:22] Casey Golden: but there's a lot of opportunity in those, those types of experiences, especially now when people are fighting for business we just opened up the salon on a Sunday for somebody almost any hair salon that's closed, will literally open up their doors for business.[00:37:37] But somebody felt like a V I P for the day, they're like, oh, you got me a hair appointment. You're kidding me. You know? And it's just like, everybody wants business. I think it's just a matter of like, starting to operationalize these things a little bit more to recognize that customer and, and anticipate what they would like.[00:37:56] Shish Shridhar: The other one that I'm very fascinated about, I'm sure a lot of people are, is Patagonia. Patagonia primarily uses their social impact platform and the environment really to, to drive that loyal fan base. And I think that that's a really, to me a powerful example. [00:38:13] Brandon Rael: Just a few, a few brands I wanna call out.[00:38:16] We Starbucks is, is an underrated app. They integrated their payments and their loyalty program it in the app itself at the surface. It's a pretty straightforward, transactional based system where you get points for your purchases. You can redeem them. There's a lot of gamification as well at bingo and everything else.[00:38:32] Another underrated one is I think Marriot from a hospitality standpoint, it gives you a lot of access to obviously hotel points, but also premium rooms and other experiences and also interested what Uber is done and how they pivoted during the pandemic to UberEATS model when people weren't actually going anywhere and how you can accumulate points and, Uber cash and everything else.[00:38:51] So there are unique and interesting things brands could do that pivot during challenging times. And Uber is Uber is one of them. [00:38:59] Ricardo Belmar: If I broaden it even to luxury as well, right. Luxury in some ways I would describe this as an advantage that you have the ability to use extended products as a way to create more brand loyalty.[00:39:11] I mean, I could argue that. You know, brands like apple, for example, are exceptionally good at that by creating other products that loyal fans automatically want. And that just deepens the brand loyalty once they acquire those additional products.[00:39:26] And that's an example of where you don't even need a specific loyalty program. You just have to do things that create loyalty through let's broadly, call it trust and authenticity of your brand with customers. [00:39:39] There are plenty of studies that come out that keep reporting how gen Z is much more willing to switch brands and maybe don't care so much about the traditional brands that used to engender that kind of intense brand loyalty as previous generations did. So there are definite things that can be done there.[00:39:56] Additional experiences that can be offered to loyalty members. That's another area where we just generate even more affinity. And it becomes a matter of trust. I would argue because those experiences, you know, customers take them on because they trust the brand has curated a valuable experience.[00:40:13] And because that experience has value, that's why they're going to stick with it and keep coming back more, more and more into the brand. [00:40:20] The Value of Customer Data & Experiences[00:40:20] Casey Golden: The way that data has just been so abused and we've just lost a lot of trust and there's so much regulation and all of these different things are changing so fast. Once the consumer can hold and use their data.[00:40:34] They don't need to be paid for it. They just want value for it. Nobody's gonna get rich by Facebook giving you, a quarter of a quarter of a percent of a penny for every single time. Your data's like used on something. I think that it's just gonna end up compliance is just a lot easier if you're just dealing with individuals rather than doing all of this stuff behind the scenes. There's just more context. You have somebody saying I'm here. I want to engage. I'll tell you everything about me. Just provide me service, help me save time, help me have a better time. Help me find the right product. Show me something new.[00:41:15] Surprise me. You know, the whole entire concierge side of retail is just, it's absolutely booming right now. I mean, I have so many friends that just have concierge businesses. They're overbooked, they're slammed, they're hiring like crazy. And they're doing so much stuff other than booking a restaurant or booking a trip.[00:41:36] I don't feel that one strategy is gonna be right for all of retail. We all shop across different whether or not you're at Amazon or target or gap or Walmart or Chanel. We are very dynamic individuals. So I think everybody will have a bit of a difference, but I think ecosystems is the way to go.[00:41:57] And it's gonna come down to where do you have access to, to product, but you get the best experience and marketplaces they're popping up like crazy right now.[00:42:05] It's as if they never, they haven't been existed in the last 15 years. They're everybody has a new marketplace open with a point of view. I've never been able to buy so much exclusive product in so many places online in my life. But again, that doesn't help a gen Z or an alpha connect with the brand and people who are used to shopping with these brands, they're getting worse service than they have ever had in their life.[00:42:27] So I think that this is the race that's on for like from now until 2025. It's I think it's gonna be more about personalization, customization, finding value for data and earning that. [00:42:42] Ricardo Belmar: Yeah, it's almost [00:42:43] Comes down to a, a brand versus marketplace kind of mentality around loyalty, right?[00:42:48] Because to your point, if I can get that same product at 20 different places, and 19 of them are a marketplace, where is my loyalty going to, is the consumer, is it going to the brand or the marketplace? Is it going to the person that sold it to me? Cuz they happen to have it at the right time, at the right place at the right moment that I was looking for it or is it intrinsic loyalty to the actual brand of the product that I bought. It's much clearer, right? If you buy it direct from the brand, whether it's in their store, their website, whether their mobile app or wherever you interact with them, it's much clearer that way. If anything, I might even go back and say, if I'm gen Z, then I probably have gotten used to shopping around and finding that best place to buy item X, Y, Z from, and therefore my loyalty is really to the process, right? Not so much to the brand and no loyalty program can change that inherently unless it's doing something to improve the experience, whether the experience is in the store, because I interacted with some, a person at the store who helped me understand why this is actually the item that the most important item that I really want to get.[00:43:53] And it's the one that I wanna buy versus anything else. And therefore, now my loyalty might go, not just to the, the store's brand, but maybe even to that store associate. Now I'm gonna seek them out later. That's an experience that helped build some of that loyalty versus just a click through by now button on a marketplace.[00:44:10] Casey Golden: Yeah. I'm not even convinced we're gonna be continue using the word loyalty. I mean, I think it's, it's been diluted. I don't. I I'd like to see more customer retention costs and, and retention spoiling your customers versus acquisition. So instead of acquisition and LTV, I'd like to see, you know, retention and customer retention costs.[00:44:33] Like how much are you willing to spend on a customer that spends a thousand dollars a year with you or $500,000 a year with you are, what are you willing to spend to give something to that customer to make a meaningful impact and, and build brand equity, not just a transaction. [00:44:52] Erin Raese: Casey. I, I love what you're saying. We, one of our clients actually, it's a grocer, a higher end grocer. They're doing exactly that. I mean, they're looking they're they're loyalty strategy is about putting a value on that particular customer and then working to figure out, okay, if I can if it's $50, a hundred dollars, $200, whatever it is that I, I can spend to keep this person, what am I going to deliver to them uniquely when they come and shop?[00:45:21] Casey Golden: And I'm like, why is a new customer worth more than me? I've been with you for 10 years. Like I want the same deal. And I'll fight that for like two weeks. If I have to, until I get the deal for new customers. but I just feel like I should have been offered as a loyal customer.[00:45:38] Who's already giving you money and staying spoil me. I will tell people and more people will sign up because you're spoiling your customers. And there's long term value. Like if I stay loyal, I'm continually rewarded rather than I'm. Rewarded by switching every six months or every 12 months or chasing the next new deal, reward me for staying [00:46:04] Session Summary & Closing Remarks[00:46:04] Ricardo Belmar: Yeah, it's a good point. I mean, this is gonna be fascinating to, to compare the numbers each year, to see how this changes and to see how different loyalty programs evolve. I think that's what makes this such an interesting topic is because of how it impacts how retailers engage with their customers and how retailers measure that, engagement.[00:46:23] I think Casey, you had mentioned some interesting points earlier about which sort of metrics might be more meaningful if once you are looking at loyalty versus just pure transactional relationships. And I think that's gonna evolve as well as we look to the next few years and how retailers look at loyal customers.[00:46:39] I'm a big proponent of putting more emphasis on lifetime customer value and obviously loyalty programs are intended to drive a lot of that increased value and increased relationship increased spend. And we know that the most successful loyalty programs tend to do that. They create an environment where those loyalty members, they spend more with the retailer particularly when those are fee-based loyalty programs that deliver a lot of additional value beyond just discounts and things of that sort.[00:47:08] Now we know that those types of programs really do have an impact and benefit for the retailer. And, some of the good examples that we mentioned , Jeff had a good example with REI. We talked about Ulta and interesting that we all managed to avoid talking about Amazon prime, which in some ways is the ultimate loyalty program.[00:47:25] But the results for that were pretty obvious to see how that's come about. Walmart has had interesting results and I honestly was surprised with the numbers we heard over the past year of how many folks have signed up for Walmart plus but that seems to be working for them. [00:47:37] So I think there's definitely lots of room for change in loyalty programs. I think there's lots of room for new types of tactics and experiences to be built. I think we probably all agreed through this session that it it's about more than just pricing and discounts that the best programs develop community.[00:47:54] They develop trust with the customer. They use experiences to drive that relationship and that those tend to be the ones that are most well received by customers. So Erin, I wanna give you one more opportunity if there's any kind of closing comment that you'd like to make that maybe is something we didn't cover in loyalty programs that you think is really worth mentioning here at this point.[00:48:14] Erin Raese: Wow. No pressure. [00:48:15] Ricardo Belmar: Yeah, no pressure. [00:48:16] Friday. [00:48:18] Erin Raese: yeah, I think we, I think we covered a lot of the things that are important to cover. The way we look at it is it it's all about the collecting of the data in using the data well, so to a lot of the points that Casey and others were making, it's how to build a better experience , and then again, that goes to that, that's the foundation of what will create those emotional bonds.[00:48:39] And that's what you need to get that stickiness. That's what you need to get somebody to actually start advocating for you. So, you know, we're just hoping that, more and more organizations are able to, collect that data and be able to have it in a format that they can use. And I think that that's a, real core challenge.[00:48:55] The good news is there's technology out there to help 'em. [00:48:57] Ricardo Belmar: Yeah, in the end it is all about the data and what, what you can do with that data as the retailer to help your business and help improve that relationship with the customer. So I think on that note, we're gonna go ahead and close out the room.[00:49:10] Thank everybody up on the stage. Thank and speakers. I know a couple of our speakers had to drop for other commitments. Erin, I want to thank you for joining us this week as our loyalty expert and special guest. And I really appreciate you spending the time with us here. I hope you'll come back and join us again in the future.[00:49:24] Erin Raese: Thank you so much. This was a ton of fun. I've always been in the audience, so I feel like I've been a part of it for a long time, but thanks for having me on stage. [00:49:30] Ricardo Belmar: Absolutely. And, thanks everyone for joining us and have a great weekend. Bye everyone! [00:49:33] Recap, or ?[00:49:33] Ricardo Belmar: Welcome back loyal Retail Razor Show listeners. We hope you enjoyed our panel of experts from that clubhouse session.[00:49:45] Casey Golden: So let's change things up a bit. Usually this is the part where we either bring back one of our amazing clubhouse guests for a deeper dive into topics we didn't get into in clubhouse or summarize what the group talked about and give a few extra bits of info and our keen opinions on what was covered, but you know, we're not just moderators.[00:50:04] So this time we're not gonna do either of those things.[00:50:07] Ricardo Belmar: Wait, we're not. Oh, wait. So, so what we're going off script are we? Oh, okay. Casey, what exactly are we going to do instead?[00:50:13] Casey Golden: Like we're, let's just shake it up a little bit. Since we recorded that session, there have been some pretty cool developments in new tech that could be the greatest thing to happen to loyalty since , well, loyalty. And you know what I'm talking about? we need to talk about web three, NFTs, and crypto[00:50:33] Ricardo Belmar: Okay. Okay. All right. I'll I'll I'll bite into this one. Let let's do it. Let's dive into those topics. So if you're listening right now, you're probably saying to yourself, wait a minute. What just happened? Did I jump to another episode of the podcast and not realize it? What happened here? When did this become the pod on web three NFTs and crypto? Right?[00:50:47] Casey Golden: Since I went head first.[00:50:53] Ricardo Belmar: we, we are so off script here. Okay. Okay.[00:50:56] Casey Golden: Yeah, don't worry. We've got your backs on this one. Turns out if we look into the crystal ball or just go back and listen to our 2022 top 10 predictions episode, we'll see that NFTs and web three, stand to change a lot about loyalty.[00:51:11] Ricardo Belmar: okay. Tell us more, Casey. Tell us more.[00:51:13] Casey Golden: So loyalty programs have traditionally, it's just been an email segmentation. right. And[00:51:23] Ricardo Belmar: Yeah.[00:51:24] Casey Golden: you know, you get 20% off for the first time you sign up for a newsletter. Then if you join the loyalty program, you'll get another coupon. But it's still better to sign up with one of our other email addresses and get the initial coupon.[00:51:38] You know I think the consumer has, caught onto a lot of these discounts and, there's nothing new in anybody's newsletter.[00:51:47] Ricardo Belmar: There's that too. Keep going, keep going.[00:51:50] Casey Golden: Yeah, there's nothing really new in anybody's newsletter. So web three, just kind of, you know, hit in with what are some use cases and some utility for NFTs. And, retailers have been looking at the NFTs and really kind of diving into what are some great utilities for it. And loyalty has definitely stood out.[00:52:09] I see a lot of the platforms that are coming out of web three, SAS platforms, are focused on loyalty programs and looking to sell their software to brands. NFTs are a new way to essentially manage those members and loyalty programs a lot easier and a lot more interestingly than just an email with a coupon So some of the things that, we've been looking at and I've been, talking to a lot of companies in the blockchain lately and working with commerce and, and really focused on what's the utility of an NFT to a brand. And how can that impact loyalty? And we're seeing rise in these conversations about gated commerce. And having this unlockable content, if you're an NFT holder and how do you engage in that community? Right. So we're taking that email list and we're turning it into a, a discord community with two way communication and[00:53:06] Ricardo Belmar: which is new.[00:53:07] Casey Golden: which is new and it's a heck of a lot less expensive. And there's. Not a big, you know, you're not going necessarily into the spam box, but you have to be present.[00:53:18] Otherwise the messages will just pass you by.[00:53:20] Ricardo Belmar: go right over you. Yeah.[00:53:21] Casey Golden: Yeah. So you really have to build really interesting content and start understanding what, what matters to your customers. And I think that that's the first step is one being able to listen to your customers, see what people are engaging with in more of like real time and open up the communication.[00:53:37] If you offer something terrible or silly you immediately know if your customers think that it's silly or doesn't provide any value. So you can ahead and iterate. So one of the things that I'm really intrigued with is, you know, more brands are launching their first NFT and it's typically going back to a charity collaboration with a great artist.[00:53:58] Typically run by an agency for the project or the initiative. But there isn't a lot of utility yet. So with gated commerce, essentially, if you are an NFT holder of, let's say a mutilated ape or a doodle, I'm a big fan of doodles You authorize your wallet on the website. And if you are a holder, you go into unlock a completely new type of eCommerce experience, whether or not that's discounting for special pricing access to products that are not available for the general public and.[00:54:37] Even being able to manage in person V IP events with having, you know, multiple tiers based off of, the NFT holders you can go ahead and create different levels of an NFT. And this I think is a little bit more interesting than email. Because you can actually drive business off of other people's loyalty programs or community.[00:54:58] So it doesn't have to just be the brand NFT that they release to their customers, but you can start accepting other communities and other brands in one of the companies doing this right now is smart token. And I think it's a really interesting value proposition to connect loyalty programs across brands.[00:55:18] Ricardo Belmar: Yeah, I think that's pretty, pretty clever. Right? So you bring in sort of adjacent communities, that might not normally. Either a part of your brand community or might not normally be part of your customer base. So you can use the loyalty prone kind of two ways, right? You're, you're sort of rewarding the people who are your loyal base, but you're giving them a connection to a new community that they might be interested in because there's some adjacent value to that.[00:55:43] Let's call it secondary brand. So I think that's a really cool way of expanding a loyalty program. If I kind of think back to where, where you started going down this road here, first, you've got this great two-way communication where most loyalty programs before.[00:55:56] And, and in fact, probably the majority of the things we talked about, even in the clubhouse session were really all one way communication, right? It's like you just said, it's emails going out to a customer base. So even if there're a fan base, what are you generating with those emails? What are you doing other than giving them special offers or discounts, in this way with web three and NFTs, you're creating.[00:56:15] A really cool gated way to provide access to something that's totally unique. And I, I think one, and to me, this isn't even a new lesson to be learned right in loyalty is that if you create enough intrigue and uniqueness, right, you, you make those existing customers into. Advocates of your brand, because now they've seen something special, right?[00:56:34] They're getting that special treatment from being your customer. And now that encourages them to wanna tell people about it, cuz who doesn't wanna share. . Who doesn't wanna share that you had this really cool, unique access to something that nobody else was able to get to if you're not a loyal customer.[00:56:49] So now you've got the two-way interaction with your loyal customer is you've got community to community communication. You're leveraging adjacent communities. You've got uniqueness and intriguing by access to special events that are gated or, or it doesn't even have to be an event.[00:57:02] It could just be special product. That you otherwise couldn't get access to. So that's more intrinsic value for that, for that customer. So these are all things that you just can't get from a one way loyalty program relationship. In the, old days of like last year,[00:57:17] Casey Golden: And it keeps people engaged, right? Like, I mean, Everybody wants their loyalty commute, like their loyalty program to produce monthly reoccurring sales. I mean, I think that that's overall the goal, [00:57:31] Ricardo Belmar: right. You want that lifetime customer value,[00:57:33] Casey Golden: yep. Increase that lifetime customer value, but that's a lot of content and value that you need to figure out how to provide every single month or quarterly and really decide how are you going to move the needle.[00:57:45] If the only benefit is to one brand. [00:57:48] And I that this is kind of the most interesting piece is, I mean, we used to have wallets filled with plastic loyalty cards that we had to swipe and they[00:57:58] were on [00:57:58] our [00:57:59] Ricardo Belmar: yeah,[00:58:00] yeah. Way too many.[00:58:01] Casey Golden: way too many way too many to the point where like I'm not carrying a secondary wallet to get like 5% off, like I'm over.[00:58:09] Keep your dollar. That's fine.[00:58:11] Ricardo Belmar: Yeah. That's not worth it. Yeah. Yeah.[00:58:14] Casey Golden: but being able to do some types of collaborations[00:58:18] and being able to have an NFT that actually holders are using and maintaining and continuing to be active with on a regular basis, whether or not they're with your brand shopping with your brand today or tomorrow. You have an activated member[00:58:35] Ricardo Belmar: That's right..[00:58:36] Casey Golden: because it's able to be used at multiple locations.[00:58:39] And I think that that's super strong and it wouldn't have been able to be managed very well without an N fT [00:58:46] Ricardo Belmar: Yeah. And, in the end, all of this is changing our definition of that loyal customer. And I don't often hear too many people talk about this, but I'm, I'm gonna bring it up here. So to me, there's a difference between a loyal customer and an extremely loyal customer.[00:59:00] Loyal customers, you know, they join your loyal program, they shop with you, but it's the extremely loyal customers that they don't just shop with. You. Repeat buy in some cases, right? If it's a consumable item, the same item over and over again, they're the ones that are telling everyone what they're buying and why they're buying it and why they love your brand. [00:59:19] The loyal customers, you're just on their go-to list, ? You're on their list of go-to places to shop at, but that doesn't mean that they're gonna keep buying your new products that you introduce just because they're loyal. Loyal customers say, oh, look you, the brand, my, one of my favorite brands introduce a new product.[00:59:34] I wonder what that's like compared to something I've seen from another brand, but you're extremely loyal customers say, oh, I gotta have that. That's something new. I gotta have that [00:59:42] And if you've tied that to an NFT, . And you've given it special access to something, then wow. Now you've really got somebody who's not only engaged with you and wanting more and telling more people and bringing them into the brand.[00:59:54] I mean they're just with you for life at that point. [00:59:56] Casey Golden: Exactly. And I think that being able to really understand how to separate these benefits and the values, because the person that would come in and shop with me every other Friday, who was one of my loyal customers and one of the brands top loyal customers, they didn't have a loyalty. They didn't weren't in the loyalty program because loyalty parks didn't work on designer clothing. it was only for downstairs. So, you know, I think that there's this re really great opportunity to be able to separate these in a way that it's not an email address, because a lot of the, the top 10%, 15% of shoppers don't wanna share their email address. They're not getting a coupon or a discount on the product they buy anyway, because.[01:00:44] Loyalty points are not always usable on all products that are sold at the brand. And so this used to be two different ways to manage loyalty programs and to grow them. And now I feel so much easier to be able to say this entity goes to these customers, unlocks these value adds it's private. We're not emailing them.[01:01:06] We, we are creating consistent value. And then you have your core loyalty programs where you're focused on acquisition and get driving that LTV up and getting that brand experience out there and being able to do it a lot easier to manage 79 million people. Right. [01:01:25] Ricardo Belmar: And, and more [01:01:25] Casey Golden: we forget a lot about the sheer number of people that these brands email on a weekly basis.[01:01:33] and the sheer number of shoppers that are included in these loyalty programs or groups and how we segment we're not segmenting, a few hundred people. It's millions of people are going into segments and I think it can be very interesting on being able to manage that in an instant, by having connected technology versus, a barcode, a QR code, an email address, a coupon code.[01:01:59] Like we don't, we're not gonna need coupon codes anymore.[01:02:02] Ricardo Belmar: Yeah, but, and, and, and it'll still be personalized, right? So you still have a consumer who feels like this is a personalized relationship.[01:02:10] Casey Golden: Yeah. I mean, I just went to an event during NFT NYC and there was an owner of a brand on stage. They just released their first NFTs for their VIP customers. And she said, I will never pay for MailChimp again. I think that that's pretty strong comment[01:02:29] Ricardo Belmar: That's a pretty strong comment.[01:02:30] Casey Golden: that by implementing even the first stage of changing their loyalty program and how they're engaging with customers over into NFTs and discord literally has an entire brand moving off of email marketing platform.[01:02:45] I'm like, I don't know how that's gonna scale. I don't know if Bloomingdale's or, or Nike or Gap is necessarily gonna move off of email, but I think it provides a really interesting conversation as more of these blockchains come out that have lazy minting and the cost of mint or gas fees decreases to be able to run in the millions without costing the brand a lot of money.[01:03:10] Ricardo Belmar: Yeah.[01:03:10] Casey Golden: I think it could be really interesting. I, I have to say that email marketing platforms need to watch out [01:03:16] Ricardo Belmar: Yeah. [01:03:16] Casey Golden: something's happening.[01:03:17] Ricardo Belmar: I think because of what you were just describing it, we're gonna, we're likely to see this come through stronger through luxury brands first, before it kind of moves down market to bigger and broader brands. But I think the luxury brands are gonna really pioneer this and kind of set the standard for how it's done. [01:03:33] And really show your other brand, the possibilities of what you can do with this technology to build stronger loyalty.[01:03:40] Casey Golden: It's an acquisition strategy, as well as creating this new segment and be able to create like completely new brand experiences, whether or not it's member access or coupon or special pricing.[01:03:54] It's in your face, like what is on the other side? And and there is, it's not, maybe it's not just a discount. You don't know what it is until you have one. And how do you get one? And, and it could adjust how, whether or not more consumers are gonna do some more brand switching as more technology is deployed.[01:04:15] That increases the customer experience. The brand experience increases value cuts down on. Poor communication or one way communication that just kind of stale. I mean, I think we can all agree that email marketing is a bit stale. It works, it drives the revenue. I don't know if we can have all of our eggs in that basket anymore.[01:04:34] But for all means, you know, don't turn it off until you've actually built your community somewhere, but I think it could definitely be a game changer. Because you can reload NFTs. You don't need to email these people six times a a week to tell them something new, you have to figure out one really, really great thing to do. And it's not necessarily gonna have to be only your brand because you can amplify.[01:05:02] Ricardo Belmar: right. [01:05:03] Yeah. Going [01:05:03] Casey Golden: happening at your brand.[01:05:05] Ricardo Belmar: adjacent brands. Yeah,[01:05:06] Casey Golden: That is because you're a loyal member at another brand. And I think that this is, could be really compelling, especially for brands to mix that department store strategy, where we have a customer that shops across multiple brands they're coming into a multi-brand retailer to be able to have this greater value of access to product and, and use their loyalty points across multiple brands. Having NFTs cross brands for their loyalty programs is gonna be pretty disruptive,[01:05:39] Ricardo Belmar: I agree, which goes back to why we had it on our top 20 22 predictions list. Doesn't it?[01:05:44] Casey Golden: right. [01:05:46] Ricardo Belmar: well, Casey, that probably means it's a good time for us to call it a show. What do you think?[01:05:55] Casey Golden: I think so we shook it up.[01:05:56] Ricardo Belmar: So going off script,[01:05:58] Casey Golden: it's always nice to just sit and sit around and chat with you, Ricardo. I[01:06:03] Ricardo Belmar: That's right. [01:06:04] Casey Golden: like one of my best here over the last year, and I feel that, you know, we spend so much. Chit chatting with other people. It's always nice just to have a chit chat together.[01:06:13] Ricardo Belmar: Just between us. Exactly. Exactly. We'll hope that listeners will let us know if they enjoyed our little off script moment for this episode. We'll see what happens next time . See what we do to change things up that time, but on that note, Casey, I think we will call this one, a wrap.[01:06:28] Casey Golden: We're out.[01:06:29] Show Close[01:06:29] Casey Golden: if you enjoy our show, please consider giving us that special five star rating and review on apple podcasts. Smash that subscribe button in your favorite podcast player so you don't miss a minute. Want to know more about what we talked about today? Take a look at the show notes for handy links and more deets.[01:06:48] I'm your cohost Casey Golden.[01:06:49] Ricardo Belmar: And if you'd like to learn more about us, follow us on Twitter at casey c golden and ricardo underscore belmar, or find us on LinkedIn. Be sure and follow the show on LinkedIn and on Twitter at retail razor, and on our YouTube channel for videos of each episode and some bonus content. I'm your host, Ricardo Belmar.[01:07:05] Casey Golden: Thanks for joining us. [01:07:06] Ricardo Belmar: And remember there's never been a better time to be in retail. If you cut through the clutter.[01:07:13] Until next time, this is the retail razor show. 

S1E10 – The Retail Avengers & Building a Culture of Innovation Welcome to Season 1, Episode 10 of The Retail Razor Show! In this episode, we turn the dial up to eleven on our ongoing innovation discussion! We previously focused on digital transformation & innovation both from a “what” and “who” perspective, but how do you create an environment and culture that fosters innovation without breaking the business? To answer that, we bring you a special guest, Andrew Laudato, Chief Operating Officer of The Vitamin Shoppe, fellow Advisory Council member of George Mason University’s Center for Retail Transformation, fellow RETHINK Retail Top Retail Influencer, and author of the new book, Fostering Innovation – How to Build an Amazing IT Team. Andy joins our Retail Avengers team to share his winning framework for building a strong foundation for innovation in IT teams, including his tried and tested approach to hiring, budgeting, and project management for innovation, plus more! Have you heard! Our podcast is staying strong on the Feedspot Top 60 Retail podcasts list! We’re currently at #22, so please give us a 5-star review in Apple Podcasts if you like the show! With your help, we’ll be on our way to a Top 20 spot! https://blog.feedspot.com/retail_podcasts/ Meet your hosts:I’m Ricardo Belmar, a RETHINK Retail Top Retail Influencer for 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 lead partner marketing advisor for retail & consumer goods at Microsoft. And I’m Casey Golden, CEO of Luxlock. Obsessed with the customer relationship between the brand and the consumer. I've spent my career on the fashion and supply chain technology side of the business. Now I slay franken-stacks! Together, we’re your guides on the retail transformation journey. Whether you're thinking digital and online, mobile, or brick & mortar stores, we’ll help you cut through the clutter! The Retail Razor ShowFollow us on Twitter: https://bit.ly/TwRRazorConnect with us on LinkedIn: https://bit.ly/LI-RRazorJoin our club on Clubhouse: http://bit.ly/RRazorClubListen to us on Callin: https://bit.ly/RRCallinSubscribe on YouTube: https://bit.ly/RRShowYouTubeSubscribe on Apple Podcasts: https://bit.ly/RetailRazorShowRetail Razor Show Episode Page: https://bit.ly/RRShowPod Host → Ricardo Belmar,Follow on Twitter - https://bit.ly/twRBelmarConnect on LinkedIn - https://bit.ly/LIRBelmarRead my comments on RetailWire - https://bit.ly/RWRBelmar Co-host → Casey Golden,Follow on Twitter - https://bit.ly/twCaseyConnect on LinkedIn - https://bit.ly/LICaseyRead my comments on RetailWire - https://bit.ly/RWCasey TRANSCRIPTS1E10 Building a Culture of Innovation[00:00:20] Intro[00:00:20] Ricardo Belmar: Hello. Good morning. Good afternoon. And good evening, whatever time of day you're listening. Welcome to the retail razor show. I'm your host, Ricardo Belmar a RETHINK Retail, top retail influencer and lead partner marketing advisor for retail and consumer goods at Microsoft.[00:00:33] Casey Golden: I'm your cohost Casey Golden CEO of Luxlock. Obsessed with the relationship between a brand and consumer, the experiences, everything. I've spent my career on the fashion and supply chain technology side of the business. Now I'm slaying Franken stacks to power the future of commerce.[00:00:48] Ricardo Belmar: So Casey, this episode is a real treat for listeners keeping with our recent themes on innovation and leadership. Our retail Avengers crew on clubhouse brought in none other than Andy Lodato currently the chief operating officer at The Vitamin Shoppe, a CNBC technology executive council member, a fellow advisory council member at George Mason University's Center for Retail Transformation, also a fellow RETHINK Retail top retail influencer, and most recently author of the book Fostering Innovation, How to Build an Amazing IT Team. Andy joined us for a deep dive on building the right environment for innovation.[00:01:24] Casey Golden: It's a great clubhouse discussion. Andy brings a fresh perspective and has valuable experiences to share about creating that ideal environment to foster innovation.[00:01:34] After our two part series on digital transformation and innovation, this one really dials it up. With best practices from a real world retail expert, making changes.[00:01:45] Ricardo Belmar: Yeah. Andy has lived through a lot when it comes to innovation, he's got so many examples and he's, he's worked hard to figure out what the right way is to create that ideal environment for innovation. And he shares with us what worked and what didn't throughout the discussion.[00:02:00] Casey Golden: Spoiler alert. You'd be surprised how concrete is a retail requirement. Stick around for his stories.[00:02:07] Ricardo Belmar: It's definitely one of Andy's best stories that he shares in this session. But let's not give away all the best parts, Casey.[00:02:13] Casey Golden: All right. All right. I'll let the dialogue unfold.[00:02:17] Ricardo Belmar: Yes. Quite clever. Nice and smoothly done. I bet you've been waiting to say that haven't you.[00:02:20] Casey Golden: I can neither confirm nor deny that. Totally never got to use that phrase before. I'm digging these one liners.[00:02:32] Ricardo Belmar: you're getting a lot of those in.[00:02:33] Casey Golden: So let's cut through the clutter and get to the clubhouse session. The retail avengers build a culture of innovation with special guest Andy Laudato. He'll be with us when we come back to ask him even more questions, so stick around!.[00:02:47] Clubhouse Session[00:02:47] Ricardo Belmar: Welcome everybody to the retail razor room. We've got a special treat this week. We're going to be talking about building a culture of innovation. We have a special guest that we'll introduce in just a moment, but in case anybody in our audience here is not one of our regular visitors.[00:03:07] We'll do some quick introductions of the Retail Avengers team that's always here in the room. Casey, why don't you kick us off?[00:03:14] Casey Golden: Hi, I'm Casey golden. I'm the founder of Luxlock retail tech platform. Focusing on customer experience. Been on the industry side of the fashion and enterprise tech. So kind of moved myself into the convergence of both.[00:03:28] Ricardo Belmar: All right, great. And Trevor,[00:03:30] Trevor Sumner: My name is Trevor Sumner. I'm the CEO at perch. We do interactive retail displays that use computer vision to detect which products people touch. So they wake up and immediately tell you about the right product at the right time. And so a exciting frontier of computer vision, IOT, and interactive retail display.[00:03:48] Ricardo Belmar: Thanks Trevor, Jeff.[00:03:49] Jeff Roster: Hi, Jeff Roster, a former Gartner[00:03:51] and IHL retail sector analysts. Now co-host of this week in innovation and on a couple of advisory boards[00:03:57] Ricardo Belmar: Great. Thank you. And Shish.[00:03:59] Shish Shridhar: Good afternoon, I'm Shish and the global lead for retail, with Microsoft. I've been in retail for about 20 years focused on AI and currently from an innovation perspective, driving co innovation with startups, for retailers looking forward to the conversation with Andy today.[00:04:16] Ricardo Belmar: Thanks Shish. And I'm Ricardo Belmar for those that don't know me, I'm the lead partner marketing advisor at Microsoft, and I've also been in the retail tech side of the industry for the last two decades trying to help retailers really get the best value from technology investments and super excited to have with us, our special guest today, Andy Laudato COO at The Vitamin Shoppe. And Andy, I'm gonna let you kick off about yourself and how you got to where you are today and what led you to write your book that was just published, Fostering I nnovation which is the topic of our room today.[00:04:48] Andy Laudato: Great. Well, thank you, Ricardo. And hello everybody. Great to be here. I've been a longtime listener and a contributor to the retail avengers. I am the chief operating officer at the vitamin shop. The vitamin shop is a, just over a billion dollar health and wellness retailer. We're mostly in the U S we have over 700 stores in the us.[00:05:06] And then of course we sell on vitamin shop.com. So in my role, as COO, I oversee the P and L for our e-commerce. I run the supply chain, technology, what we call enterprise portfolio management, which is something I think we'll hopefully talk more about today. As well as the quality and commercialization of our private brand or another way to describe it as I do everything at the vitamin shop that the CEO does not want to do.[00:05:27] Ricardo Belmar: love that description,[00:05:30] Andy Laudato: I'm assuming people are laughing at my jokes, but you know, I can't hear him, but I'll just assume that they're all laughing. Okay,[00:05:35] perfect.[00:05:40] So. I started my career way back in 1990 as a computer programmer at the limited fashion apparel, I was the first ever IT guy at a little startup called Bath and Body Works, and I really just fell in love with the business sides. I consider myself a business person who happens to love technology, not a technologist that works in business.[00:06:01] And I'm 20 years as a CIO. And during that experience, I made a lot of mistakes, especially early on, and some of them costly. And it really inspired me to write a book about some of the mistakes I made, what lessons I learned and the goal was to help young people or people in their early in their career.[00:06:18] Learning the easy way, right? Buy a book, read about it and do things better. I believe a rising tide raises all ships and especially in retail, we need to help each other out. So I'm hoping that this book will inspire and help everybody that reads it.[00:06:30] Ricardo Belmar: Thank you, Andy. I'm sure everyone who does read your book in retail is going to greatly appreciate all the wonderful insights and stories that you've told in there, as well as all the great tips. Now, I know I certainly came away from reading the book with a number of them as well, and I'm not even a CIO.[00:06:46] So I think everybody's going to have something to learn from that.[00:06:49] Andy Laudato: My books for every man, woman, and child in the United States.[00:06:52] Ricardo Belmar: There you go, there you go. That's the right way, right way to look at it. Now, not to mention the fact, I think we all agree that there's a good need for lots and lots of collaboration in the retail industry given all the current day and future challenges facing the industry,[00:07:05] Laudato's Hierarchy of IT Needs[00:07:05] Ricardo Belmar: So let's start in one particular area Andy, that you dive into right upfront in the book, and that's what you call Laudato's hierarchy of IT needs which as you might guess is based on Maslow's hierarchy of needs.[00:07:18] And while Maslow postulated of course that in order to achieve things like love, belonging esteem, and self actualization, you've got to first satisfy a lot of physiological needs, things like I don't know, little things like eating, drinking, sleeping and then safety needs. So I think you drew a really great analogy, to that, to put together your hierarchy of IT needs and not to steal too much thunder from that.[00:07:40] Why don't you walk us through , your version of the pyramid and how that relates to running your night?[00:07:46] Andy Laudato: Yeah, absolutely. So, you know, I think a Maslow is saying, if you're being chased by a bear, you can't fall in love. Right? You got priorities. And so making sure you have air and food and water, and then you're safe, all these things have to happen.[00:07:58] And we all want to innovate. We all talk about innovation and innovation is very important, but if the basic it needs are not met, it's just not going to happen. So at the very bottom of the Lodato hierarchy for IT is just, KTLO keep the lights on. And the emails have to email and the paychecks have to print in the registers, have to ring and the website has to perform and like it or not, if you're in it, leadership, this is your most important job.[00:08:24] It can do a lot more harm than good. An amazing IT department's not going to make a company successful, but a failed IT department will, I don't care how nice your product is. If you can't sell it, you can't ship it. If you can't return it, then you're going to fail. This is the main job is keeping the lights on.[00:08:41] It's not the exciting job, right? It's not the fun, sexy stuff we get to do like digital signs and things like that. The Trevor does, but it's at the foundation. So that's what you start with and you gotta figure it out and you have to have a well-oiled machine for nothing else matters. Every single CIO always talks about, they want a seat at the table.[00:09:02] And a lot of times they'll tell you to demand a seat at the time. But it doesn't work. You have to earn your seat at the table and I'm talking about the exact table, the boardroom, and the reason you have to earn it is because in every company I've ever worked in the true org chart is the informal, not the formal.[00:09:17] So let's assume that we get this figured out and you have the things running smoothly. The next level up then is what I call lean and efficient IT. So this is about first you get it right? And then you get it cheap. And lean and efficient. It means it's affordable. It's functioning well, because if you're a CIO and you start to go talk to other departments about programs and projects and systems, and your budgets are out of control, you just have no credibility.[00:09:47] Now look, if you can't keep the lights on, you know, so you have a big problem, you're going to pay any amount of money possible. So you've got to get it right. Then you work on optimizing. And every dollar that you can save or avoid spending is a dollar that could be added to innovation. So if you really want to innovate, it's possible to self fund by finding other things, to make efficient.[00:10:09] Ricardo Belmar: I want to turn to the Avengers panel members here and see what everybody thinks about those first two layers, keeping the lights on and creating that lean and efficient IT.[00:10:18] Jeff Roster: Gosh. Well, the first question I want to ask is what's your, what's your overall it spend Andy, but, but I know you're not going to answer that. So keeping the lights on it used to be almost 60 to 70% of her, of an it budget was, was basically depending on how you define that, that case. I'm assuming that everyone's trying to drive that down.[00:10:35] Is that part of the process that you're, you're going to.[00:10:39] Andy Laudato: Yeah. So the first, the bottom of my pyramid is just keeping lights on any way you can. And then the lean and efficient it is about just that it's about optimizing your cost so that you can have a higher percentage that's going towards creating value and innovating.[00:10:52] Casey Golden: Where do you think that we are right now in general for let's just say the predominant of retail. Do we feel like everybody has a core efficient we're beyond keeping the lights on and everybody's made those investments. Would you say it's like 60%, 80%? How close are we at? Like the core basic,[00:11:12] Andy Laudato: you know, it's astonishing to me that it's 20 22 and in order to build a retail stack for omni-channel, you probably need to include at least 20 to 30 different companies. I mean, Everyone's got a different, and I know that a Microsoft's on their path to being able to , provide these as are others trying. But the leading e-commerce platforms are not the leading OMS platforms.[00:11:34] I mean, I ask about subscriptions and then everyone tells you to use another platform. And then if you know, you look at the stack, people have on their websites, it's just layer after layer of these really niche. Functions and features. And so when you think about it, when I had a little short stint in healthcare and there were big enterprise tools and kind of ran the whole company.[00:11:55] So I think we're there. Casey. I think that, most retailers have built these things, but it takes an awful lot of work, effort and coordination to keep them all working together. I mean, imagine if you wanted a new car and you had to buy your chassis from Ford and your steering wheel from Chevy and your engine from Honda,[00:12:12] Casey Golden: that's a great analogy.[00:12:14] Andy Laudato: And this is how we live[00:12:16] in some of the parts don't exist. You've got to build those custom, right? And so this is what we're doing in retail. So where are we? We've come a long way, but it's still a giant mess.[00:12:24] Casey Golden: I love that analogy. I want to see a diagram.[00:12:29] Andy Laudato: I can go very fast.[00:12:33] Trevor Sumner: I mean, that's certainly dovetails into my question, which is. You know, certainly the, the markets, the retail is changing faster than it ever has. And I think of IT almost like electricity, right? You don't think about electricity in your offices or in what you do on a day to day basis, but it powers everything that you do.[00:12:50] Where the IT budget goes[00:12:50] Trevor Sumner: Similarly, IT powers everything that you do. How do you think through like the different departments, whether it's marketing sales, supply chain in it. And how to think through budgets, innovation and managing that. Is it all, is all IT in the IT budget or like where is the line where it flirts into a department, even though it's powered by technology because these days technology is like electricity.[00:13:20] Andy Laudato: Yeah. So I do agree, right? You walk in a room and flip the switch you want, you expect the light to come on. And a lot has to happen, there has to be a power plant and distribution and a lot had to happen, but it's there and it's figured out generally, except for in Texas, that stuff works. And so you pick up a telephone, at least an old fashioned telephone, and you expect the dial tone and it's the same thing with the internet, right?[00:13:41] It's a commodity. And even past the internet, it's about the cloud having, you know, CPU, so processing and storage. So I absolutely do agree that it is a necessary, I mean, I was looking for a new place to live and I checked on what kind of internet is available and , we all remember used to have to research before we went to a hotel and how much was it going to charge? So I definitely agree with that.[00:14:05] As far as where the budget should go. And I actually talk about this in the book. I'm a big fan of showback, not chargeback. So I do believe that the cost of technology should be an IT budget because if not, how can those costs be managed and how can you get to lean and efficient, which is the second step. Now showback is about actually letting everyone know how much of IT costs are being attributed to each of the different departments.[00:14:30] But if you let the departments of a company pay for IT, then they're going to have a bigger say. So the head of marketing might be all in on the Amazon cloud. And the head of sales is all in on the Azure cloud and someone else wants to have their own computer. So, you know, the people writing the checks have a lot of power, so I'm not a proponent of individual departments paying for IT.[00:14:51] Trevor Sumner: I guess, part of my question is. There's certainly, like you said, laptops, internet connectivity, but from a data perspective, let's say you have a customer data platform. Is that marketing budget is that IT budget? Is that being integrated into other systems for e-commerce or even supply chain?[00:15:10] So then marketing heads into operations and everything needs to be talking to each other. And then there might be integration. Is it when you cross departments that it becomes IT. What is it versus a departmental technology spend in your world?[00:15:27] Andy Laudato: Yeah, there just aren't that many siloed solutions. I mean, a customer data platform has this role in stores. It has role in the website ,it has a role in outbound marketing , it has a role in customer care. And so to have that and be in a single budget, to me, IT is the kind of the neutral party for that. So, yeah, I guess I'll repeat myself, but I'm a big proponent of anything that's technology , should be an IT budget because it's the glue that holds it together. I mean, there's a really good book called the corporate underpants by Tamra Adler. I think her name is, and it talks about how you could look at a company's website and kind of see the different departments. And I think when you start to silo your tech, then you're going to, it's going to show up to the customer.[00:16:02] You're not going to be seamless to the customer if you're not seamless on the backend.[00:16:06] Ricardo Belmar: So Andy, one thing that I'm going to ask you about there, on that specific point where, you just mentioned how that has an impact in giving the appearance and perception to the customer that it's all seamless. You make a point in the book about complacency and how that's the number one enemy of reliability.[00:16:22] And when I saw that, that reminds me of a lot of conversations I've had with retailers in the past about consistency in execution at the store level, from store to store and how that also impacts that consumer perception of the whole retail brand. So when you mentioned it, in the context of, keeping the lights on,[00:16:40] it's never really a solved thing, or you don't stop keeping the lights on ever. Right. It's always an ongoing thing. And that's why it's the foundation in your pyramid. Is that the right way to look at it?[00:16:51] Andy Laudato: Yeah, absolutely. Ricardo we operate in a dynamic world. So whether it's bandwidth, you need more and more bandwidth, processing power, security measures.[00:16:59] There's always new tools being added to the stack or existing tools being used differently. The bad guys are out there. They're, you know, they're continually coming up with new attack vectors. Like we're not having enough trouble, we're getting attacked by a bad actors. And so if you build it and it's great and you don't, nurture it, it's gonna fall apart.[00:17:17] That's why it's a full time job. You know, they always have to just stay on top of KTLO and the more you do and the more routine and the more process that you can put in place and now even automation and AI, then the smoother it's going to go.[00:17:28] Ricardo Belmar: And if you're doing that well, that should lead to, the lean and efficient IT part of the pyramid and make that easier. Right. If you're have that consistency and reliability.[00:17:38] Andy Laudato: Right. I like to use the word institutionalized. If you can institutionalize a process, then it's bigger than just one person it's repeatable. I always start my day with a stand-up.[00:17:47] We actually do a hundred person stand up every day at the vitamin shop with operations, our CEO's on there. And we just talk about what new systems or any changes, any problems. And so that becomes institutionalized that we're all talking about it and just gets really smooth. And as it gets smooth and automated and consistent, then it becomes cheaper, more affordable.[00:18:04] Ricardo Belmar: Oh, that makes complete sense. Why don't you take us to the next layer of the pyramid?[00:18:08] Creating Value[00:18:08] Andy Laudato: Yeah, so the next one is called creating value and in a lot of cases, creating value is what many people think all that IT does, which is projects. So this is putting in maybe an accounting system or a new order management or all the different tools we talked about from a CDP.[00:18:22] So you do a ROI and then you go to your FP and a group. You bicker over the benefits. She gets signed off, you hire an integrator and implement technology, and this is really important. But it's just not all IT does. Right. You only want to create value after you've got a nice firm foundation.[00:18:37] You don't want to throw more tools or more software on a wobbly foundation. So probably the most common activity that apps group does. And I think the most important thing is to work on the right things. And this is why portfolio management is so important. So I do think that good project management practices do exist and agile has really brought a lot, especially on the software side.[00:18:58] I actually created a class on project management on Udemy because I have kind of a passion for that. But portfolio management is important because even if you have a very well-run project, but you're not working on the right thing, then you're wasting your company's money or you just not optimizing the spend.[00:19:14] So a couple of principles I'd like to share. The first one is stop starting and start finishing. People love to kick off projects because it feels like they're getting something done. It's like, oh, when are we going to get our new order management tool? Oh yeah. We had a meeting. We got some demos.[00:19:28] Right? So starting a project doesn't deliver value. Working on a project does nothing but spend money. It's only when you deliver the features that you actually add value to your company. Another thing is a agile concept is called a WIP limit or work in process limit. And I contend I make the argument that everybody has too many concurrent projects going on.[00:19:48] So my advice is to stop starting new things until you've finished at least 10 or 15% of what's in flight. If you have 20 projects in your company and you rank them one through 20 and you finish number one. Now you have 19 projects, what the company will typically do is they'll start a new project, right.[00:20:04] Which will be your new number 20. Then you put people on it. What you're actually doing is you're putting people on, but you defined as the least important project in your whole company. So instead, what I recommend is that you take people that free up and then you add them to project the new number one.[00:20:19] And this is an agile called swarming. Take your people and just continue to push really hard to complete the most important project as has been decided by your executive team and get it done and just, focus on completion and then that's creating value. And then finally we get to the top, it seems like a journey and it is, and that's when you get to innovate.[00:20:37] So you've got a really well-oiled machine every day, just like Trevor said, It's like electricity, it just works. And , all your systems are smooth and they work. And then it doesn't cost you a lot of money. And honestly, when it's affordable, it doesn't even matter what budget it's in because it's a one and a half or 2% of the company's spend.[00:20:54] And now you've got projects going on and everyone knows what number one is and it's getting done. I mean, if you just do all those three things, you're going to be a star, right. But now, if you get there, now you can start to focus attention on innovation. Because innovation is spending time and talent and treasure on things that probably won't work.[00:21:12] So you're literally telling your company, we're going to spend money. We're going to take, hopefully our very best people, and we're going to have them do something that probably won't work. How do you do that if the first three aren't met? So in my mind you get all three working and then boom. Now , you've earned the right. to innovate.[00:21:26] Choosing Innovation[00:21:26] Casey Golden: That's a great point. How do you pick the next innovation or project to bring in when you have 19 other projects that haven't completed yet and started impacting the business? Because ideally you'd want to layer the next projects on top of the, the ones that have completed, you know, and that are starting to work in and be rolled out through the organization.[00:21:47] Andy Laudato: Exactly. And when people have already done the work to say that those projects will succeed and they have an ROI that people believe in now you're trying to do something innovative that doesn't have that. So, you know, what I like to do is box some kind of funds and say, this is our R and D funds and our R and D people.[00:22:03] But yeah, exactly what you said, Casey. And so now if your projects aren't completing on time and they're going over budget. Then it becomes next to impossible to ask for funds to try something innovative.[00:22:14] Trevor Sumner: How do you think through you know, at perch, we do the majority of our deals directly with brands who are spending their trade dollars towards innovation.[00:22:23] And often, it's being presented as category captaincy to almost look at an innovation project for the retailers. How do you think through brands bringing new innovations as part of that kind of budget, because it's still your resource, it's still your treasure and talent, right?[00:22:40] Just in terms of time and how do you balance, what brands are trying to accomplish with what you're trying to accomplish as a retailer? You know, if the spend is coming from them.[00:22:49] Andy Laudato: Yeah. I mean, it helps, right. If someone else is funding it. And so now all of a sudden it has the much lower burden to get approved. So I think that still has to fit into the priority or it has to be, somebody has to sponsor it as an innovation, but absolutely of course, if someone else's coming forward with, with funding it's an easier burden of the risk.[00:23:09] Casey Golden: Andy, when you're thinking about, moving those budgets out of departments and into IT, I don't know if you're, if you're selling into a department, IT might be the last conversation that you have before contract signed. How do you see that having those business owners Working with IT.[00:23:25] I know a lot of times they're not necessarily even in the same buildings. So being able to just even foster that type of a culture where you, you create that culture of being able to cross collaborate so that the business pain and the problems that our department's having is, is actually being presented and heard by IT.[00:23:45] Andy Laudato: Right. Imagine a place where the CIO and the, the directors and managers and VPs, and IT understand the business and they understand the business goals and they're there to help something get done. Right. And they can become champions because almost all tools have to be integrated. They have to be the security.[00:24:01] I mean, how many companies, you have a different user ID and password in your own company for every different system, right? That's, that's ridiculous, but that's normal. So, if IT is a partner, they build a single sign on tool or implement a single sign on tool that works across every, every single app. So the store person logs on once and it gets to all their different tools.[00:24:20] And even though it's different tools, at least it feels more seamless if it's on a single pane of glass with a single password. So, I mean, it just starts with embracing IT, but I say all the time that IT has to meet the business, that 95% where they are, it's not about IT. It's about whatever the business is, right?[00:24:37] Whatever we're selling and whoever our customers are. But yeah, IT in a different building is a nightmare. IT in a different floor with a different culture in different working conditions and different hours and just not part of a company culture and they have their own culture, then they're just a roadblock instead of a partner.[00:24:52] So it's all gotta be fixed, but it starts with leadership.[00:24:55] Casey Golden: If you could give one piece of advice to the companies that are looking to implement software this year that do have department budgets or manage it at the IT level. If you could give one piece of feedback on how to pull everyone together to make those decisions together, what do you think the first step is?[00:25:12] Andy Laudato: This is not a direct answer, but I think the most important thing is to get those IT people working in the store, shopping on the website, really living, take a call from the customer care. Right? I mean, if you're a database analyst and it takes two minutes for the registered or run, that's like an interesting problem that you might ponder.[00:25:31] If you're a store associate standing at a store and the line starts to form, cause register's not performing that two minutes is like an eternity. I mean, I've been there, you know, sweat comes dripping off and so getting that empathy by actually getting the people out of their, whatever they're working now, remote, you know, their home basements into stores is the most important thing I think to start with.[00:25:51] Casey Golden: That's great.[00:25:52] Shish Shridhar: Andy curious about your opinion about where innovation should sit in a company. I know a couple of years ago there was this big wave of innovation labs happening in retail. And many of them didn't quite survive very long and there was various reasons quoted for failure. Including that they were created for the wrong reasons.[00:26:15] They were innovation theater. And they were disconnected from the business. All of those things, kind of curious about what your thoughts are on innovation labs and separate innovation teams within an organization versus integrated.[00:26:30] Andy Laudato: That's a great question Shish it's kind of like when that e-comm started happening and the 1990 nines, then everybody said, oh, we gotta be in California. So they all built separate organizations. And look, we spent 10 years using the word digital, and now we're using the word innovation. I put up my book, we got to define what we mean by innovation. And so for me, it's coming up with solving an unmet need for a customer, right?[00:26:53] I think about Uber having text taxis and the idea of paying someone to drive you somewhere, probably is as old as cars, you know, probably over a hundred years old, but Uber came up with a new way to deliver that. So that's innovation, even though it's just getting in someone's car and getting a ride and paying him for it, I think defining innovation is important.[00:27:10] And for me, then it's got to be your best and brightest and boy, that's an easy thing to say. A hard thing to do because you know, and Casey alluded to it with projects, right? You got to take your best developers or project managers or business analyst or product owners, scrum masters off number one project and stick them on innovation.[00:27:27] But yeah, I'm not a fan of separating people. Now look, we're all remote and I think we're all going to be remote. So that whole proximity thing is almost like a moot point in a sense. Yeah, I think it's gotta be part of it. I think an innovation project should be in the same list as everything else.[00:27:42] I'm a huge fan of, and I call it a one list of having a single list force ranked one through X and not having a separate here's my department's projects or my department's money because you're just creating conflict internally. Now. Look, I've mostly worked at the biggest company I've worked at. You know, I worked at a $4 billion company.[00:27:58] So if you're a really, really big company, probably different, but to me, one list of projects, one team, one partnership, all focused around the three or four business objectives is how the "must" gets done and how everyone can come together.[00:28:10] Shish Shridhar: And you kind of mentioned something interesting, which is the unmet customer need and keeping focused on the customer. One of those aspects that was interesting for me was JC Penny's attempt at innovation and also maybe Virgin America's attempted innovation where the customer needs were not quite in focus when they did that.[00:28:30] So that's interesting too.[00:28:31] Scaling Innovation[00:28:31] Andy Laudato: The thing I think is crazy about JC, like in retail and when we talk about stores, we can try something in one store and then do it in 12 and then do it in a hundred and then do it at a thousand. Right. And if we're talking about online, we can AB test. We AB test every feature.[00:28:45] So we give it to 5% of the customers. So the fact that Penney's actually went to hundreds of hundreds of stores at the same time. It's astonishing. Right? Why would you, why would you do that? Make it, make sure get it right in the morning before you do it in 10.[00:28:58] Casey Golden: Yeah. I'm a big advocate for doing those rollouts in your bottom doors.[00:29:03] I'm like anything, almost anything will work in a flagship. . It produces great KPIs, but can you do it at and afford it on a bottom door?[00:29:13] Andy Laudato: Yeah, that's a great point. And if you can't then of course you can't scale it, yeah.[00:29:17] Casey Golden: Scale those up because if it doesn't work at a bottom door, then come on. We've only got, five top doors typically.[00:29:24] Ricardo Belmar: Yeah. That's, that's like my favorite thing that I've had to say to a number of retailers over the years is, almost every time your proof of concept will work when you do it at your, stores that you've tagged as the test stores, because they're always ready right there, anticipate, and they're there, know what to expect and they're having higher tolerance.[00:29:41] If something doesn't work out in a proof of concept, then to your point, right, they pick your bottom doors where they can't tolerate anything not working. And you put something new in there and if you can make it work, then you've probably figured out how to make it work everywhere else.[00:29:53] Casey Golden: Yeah, exactly. It's easy to scale it up. I've seen a lot of projects be rolled out with large budgets at a top door, and then it's, you know, one 25th of the budget to do it at a bottom door and it doesn't work and it's like, it's terrible experience.[00:30:10] Trevor Sumner: Yeah, I guess, we see that too. I think overall, there's this trend to kind of personalize stores by geography, different product selection, different offerings.[00:30:20] And I'd love your thoughts on how do you balance the importance of consistency and consistency and measurement consistency and standard operating procedures, consistency and systems with the desire to both innovate and regionalize and personalize[00:30:38] Andy Laudato: yeah, you asking me Trevor or Casey.[00:30:40] Trevor Sumner: I'm asking everybody, but you're the, you're the star this week, so[00:30:44] Andy Laudato: Sure. That's a great question. I mean, we just rolled out our first franchise store. So this is really top of mind for us because you know, one of the benefits that we're looking for from franchisees is their creativity and bringing ideas back.[00:30:56] Everyone knows like a franchisee came up with the big Mac and the $5 footlong, you know, But we want to make sure when you walk into the store, the customer shouldn't even know that that vitamin shop is not owned by the corporation. So I think it's all about guardrails and say, here's where you do not have leeway to change on branding on product.[00:31:15] And here's where you do. So you kind of loosen the reins on local stores and whether it's assortment or culture or process or fixture design, but all within guardrails of the brand.[00:31:27] Casey Golden: That's interesting that you guys opened up your first franchise. How are you dealing with, e-commerce and some of the tech stacks with the franchisees?[00:31:36] Andy Laudato: We didn't really open up, how do we even think we sold the store, but we sold the territory. So think of it as a five mile circle. And so any e-commerce sale that happens.[00:31:46] And that circle belongs to that. So we share a royalty on e-commerce sales. We have a reverse royalty if they sell something and I'm getting extra, but every single thing we're doing is being there's a participation from the franchisee. So even if there's a subscription they sell and then we fulfill it, we're going to give them a royalty on that.[00:32:04] It's, it's a really neat model and we worked through it in detail. We just didn't want to compete against them. And a lot of people that were franchised in retail before, e-commerce, they're kind of struggling now with some of these, these things.[00:32:14] Casey Golden: Yeah. It's been a definite struggle for a lot of fashion brands specifically in that franchise model in different countries, because they don't have access to the e-commerce store or a lot of the digital technology on the backend. So interesting.[00:32:28] Ricardo Belmar: So Andy, I want to ask you a slightly different point. So in, in all of the areas that you've talked about on what you've learned are the best ways to do this. I'm curious, what kind of resistance have you come across from different organizations when you've tried to follow this approach, as you've outlined it in the book, as you're creating value and you're doing that to lead to innovation. And for example, you referenced concrete a lot in some of your examples . So I'm curious, where does that come from and is that anything to do with, you know, the kind of challenges and resistance you ran into through different organizations?[00:33:01] Andy Laudato: Yeah. When I worked at a peer one, we built this new headquarters and we built this parking garage and everybody was so excited about the parking garage, right? It's you're going to park close LER, co it was covered. And I was just getting jealous of the parking garage because it was like this solid thing that you could see every day and you could see the progress and you could see the benefit like, oh yeah, I get to park my car in the sun and the shade.[00:33:22] Meanwhile, I'm working on a million dollar new HR system and no one really can see what they're going to get and why we're doing it. So I just, to me, I talk about the parking garage is my project that I try. If we can make IT projects is visible as building a garage. I mean, because ultimately it's more important to pier one, to have a new HR system.[00:33:41] Then they have really good parking for the employees, but no one really felt that way so we know where Pier one ended up . And then just in the hierarchy, it's about a firm foundation and really with two feet. So as you move up the pyramid, you got to have a firm foundation. So yeah, those are kind of some of the reasons I think about that.[00:33:56] Just a little jealousy of a project that parking garage.[00:33:59] Ricardo Belmar: I bet everyone has their own version of the parking garage story.[00:34:03] Andy Laudato: So much of IT is nebulous and not tangible. Right. And so it's, it's our jobs to make it more, more tangible.[00:34:09] Ricardo Belmar: Yeah. I would expect that even when you're in the creating value project, how you state the value has to be pretty, pretty important part of the process to that point, because as you just said, if the, overall project is one of these I'll use the phrase kind of behind the scenes, projects where the outcome of the technology is something that employees are going to take for granted of, okay. It's just working and not think through why it's so critical for the business.[00:34:33] How do you sell the value of those kinds of projects?[00:34:35] Andy Laudato: Well, you got to start in, in the beginning, right. And be clear about what you're getting while you're getting it while you're doing it. I mean Shish mentioned AI. AI is really difficult in my mind to prove value because a lot of times you stick in data and then out comes the answer.[00:34:47] And is it really the best answer and what was it based on? And, so if I can translate, a sentence from one language to another, that's pretty tangible. But if it's just send this offer to this customer, because she's more likely to buy this blue sweater instead of this pink one that that's a little trickier.[00:35:02] Managing your team[00:35:02] Ricardo Belmar: So, let me jump to another set of constants in the, in the book we've had in this room. And I think you've been in the audience for some of those. Andy's a lot of discussions around people and how you should treat the team. That work in your organization. And you have quite a bit to say about this in your book, on what the CIO's job is in terms of building the IT team, and actually how that team interacts, not just with, within their own teams, but also with other groups in the business. Can you tell us a little bit more about, what some of your views are and what are your suggestions are there and how, both from an organizational structure point of view, but just general ideas on how you should be managing the team to help foster innovation.[00:35:41] Andy Laudato: Yeah, for sure. I mean, I don't know when I had this moment, but this was an aha moment in my career that really leading an IT department is not about technology. It's a people job. I can't configure a router or open up space on a cloud or program in AI.[00:35:54] I can't do any of these things. And even if I could, I wouldn't have time to do it. So it's just about people and it's having to work with different constituents. I mean, I think we kind of got a feel for it today, right? Trevor has a, maybe a different opinion than Casey and I love that. .[00:36:06] It's all about understanding everything. So it's, all about people, but yet the people we put in these jobs have a background like me. I went to technical school and learn how to program in COBOL. That's my education. So I had to learn these things, you know, through just my own education over the years.[00:36:21] We think about people. It's about engagement and engagement to me is about, are we actually getting people's discretionary time? So for me, I do all my thinking. When I go out and long bicycle rides, I go out and think about how I'm going to solve the world's problems. So I spend a lot of my time riding my bike, doing laps at central park and thinking about how I'm gonna make things better at the vitamin shoppe.[00:36:42] Now if instead I was spending my time thinking about how I was going to find a new job or horrible, my boss is, that's not engagement. To me, engagement is, am I getting peoples brain power, their creativity, their passion. So there's kind of this old joke that people quit and don't leave.[00:36:57] They don't tell you, they quit. Nowadays, people are leaving, they're quitting and they're leaving. And so, understanding what each person is motivated by is a big, big deal for me. For a lot of tech people. And again, I won't stereotype for a lot. It's about getting to work on cool things. And so in some cases, innovation does become a motivator.[00:37:14] I mean, if IT is just need is electricity, then it's not that exciting of a career. And people have choices. So as much as you can make, keep the lights on smooth and automated and free up your time and resources to work on the fun things, creating value and innovating, then that's a better chance that people are engaged.[00:37:31] So you know, I do have a long list of ideas to take care of people. But one that I'd like to share is I think leaders need to focus on spending their most time with their best people. And I do believe that I've been coached by my HR partners to do the exact opposite.[00:37:46] So you have a poor performer. You're supposed to be coaching them, writing them up, you know, giving them warnings And a lot of people think you take your best people and you leave them alone because they're great. And then there'll be happy. But my advice is do the exact opposite. I'd rather take a, A player to an, A plus than a F student to a D.[00:38:02] So that's some advice that I've had to learn is and I learned it because, and it's in my book because I had an A player. Quit. And he said in his exit interview that he just felt kind of ignored and our philosophy was, oh, he's so valued. And he's so productive. We're going to leave him alone. And it just backfired.[00:38:19] So that's when one of my 10 ideas I'd like to share[00:38:22] Ricardo Belmar: Yeah, that was one of my favorites as well. In fact, one of the things I find in that particular approach is that when you spend time with those a players with those best team members, it, it tends to rub off on, let's call it that the next layer of team members.[00:38:39] In the sense that when you're making that A player really happy in what they're doing. A lot of that happiness, I believe rubs off on other team members and helps elevate them as well. And it just kind of propagates that way and maybe you've found the same thing, but that's kind of the way I see that approach really working favorably in any organization.[00:38:57] Andy Laudato: Yeah. I agree with that. And I have another concept that says be kind enough to let someone go. So the bad apple spoils the bunch is an absolute truth. And if someone's negative complaining a lot, they're going to go to lunch with the team. Or a virtual launch and that's going to drag the whole thing down.[00:39:13] So people that are just not a fit in, and I believe that everybody's good at something. And so the reason I say, be kind enough to let someone go, if someone's not succeeding as a leader, as their manager, you are, it's your job to let them go so they can go find where they'll do well. I've had someone work for me, went off and became a successful stockbroker.[00:39:30] Or maybe different, you know, people always land on their feet and they always seem to do better. You know, that we're succeeding after they leave the company. So, what you said, Ricardo, where the A-players and having that positive, and then you combine it with not having any people dragging the team down.[00:39:45] Then all of a sudden the team becomes very high performant.[00:39:47] Ricardo Belmar: And if you then couple that with one of the comments you made earlier about when the team that's working on that priority one project, when they finish and then you have them move down to the second most priority project, rather than having them start the next fresh project at the bottom of the list, I think that has that same kind of energy, right?[00:40:06] Where that, that team now they're coming off having finished, you have to expect that they're quite happy and pleased and appropriately so, right, that they finished that project. And now they take that same kind of energy to the next project. And hopefully if that group that was working on the second priority, they were just as pleased to be working on that one.[00:40:25] Now they've got these new people coming in with even more energy. You would hope that that helps drive that project to conclusion that much faster and so on down the line. So you get through all of them done.[00:40:34] Andy Laudato: Yeah. You know, next time you talk to a CIO, everyone can do this, right. Say to them, you know, buy him a beer and say, do you think it makes sense to put your very best people on your most important project?[00:40:43] Do you think every single person will say, of course we should put our very best people and our most important projects. Then I then say, "do you?",[00:40:51] And the answer is no, it's always no, it's like, well, we put the next person up, right? The next person, the next project manager available next product. So everyone in common sense, sometimes we forget that course. You should put your very best people on your most important project. And because that's what gives it the most, the highest chance to succeed.[00:41:09] But no one ever does that. They just don't, it's just resource modeling and people are not fungible. So you got to realize that.[00:41:16] Ricardo Belmar: That's a good point.[00:41:17] And while I wait to see if there are any questions Andy, one of your other concrete examples that stood out to me, you had a great quote where you said that sticking a group of people in a room and just telling them to innovate is no better than putting a seed on a concrete floor and telling it to grow.[00:41:32] I think that's actually a very appropriate statement.[00:41:36] Jeff Roster: That's a good one.[00:41:37] Andy Laudato: This is where we talking about psychological safety, right? We're we're talking about risk taking and you just order someone to innovate. They're not, they don't feel safe to there's kind of an old joke. Maybe it's not a little, but fail fast, but not always.[00:41:48] And so are you really willing to have a failure in retail? Are you willing to lose money? I think, risk-taking when you make where something doesn't work. Has to go with the education we all spent so much, you know, I borrowed money to go to college. You know, we all spend money on our children, lot of money, a lot of it borrowed.[00:42:06] And because we all know how important education is. And so a very expensive innovation project that doesn't work. If you kind of pretend like it never happened, you wasted every dime. But if you talk out loud about why it didn't work, what you learned, what you learned about your customers yourself.[00:42:21] It's just money well spent. So building a nurturing environment where people can feel safe and allowed to fail without getting fired is the key. And that's what I'm talking about there.[00:42:31] And then I'll just end by saying it all goes back to the customer. Who's the customer, what am I doing this for. If your job is website developer, you're so far removed from the end customer sometimes. So just making sure that the people doing the work know who they're doing it for. They're not doing it for the scrum master.[00:42:47] They're not doing it for the product owner. They're not doing it for the head of digital, you know, they're working on a feature for a customer. So to me, that should energize you because all of us, ultimately are customers. So we can, we can relate to that.[00:42:58] Ricardo Belmar: All right. Well, any final thoughts that you want to leave the audience with on your journey to innovation?[00:43:04] Andy Laudato: Thanks[00:43:04] for[00:43:04] coming . I love this stuff and I, I believe just strongly that we'll all go up together. And so I really appreciate the time and the opportunity.[00:43:12] Ricardo Belmar: And I want to thank you, Andy again for agreeing to join us today. I think this has been a fantastic session. I think we all learned a lot.[00:43:19] I, very much enjoyed reading your book. I know it's not a retail specific per se, but it definitely is worth the reads for everybody here listening, who hasn't already picked up a copy.[00:43:29] And with that, I'm going to wish everyone a great rest of your day, wherever time zone you're in. And thanks for joining us. This has been another session in the retail razor room, and we will be back with a new topic, and we hope to see you then. Thanks everybody for joining us,[00:43:43] Thanks,[00:43:44] Casey Golden: Ricardo.[00:43:44] Thanks Andrew.[00:43:45][00:43:45] Interview with Andy[00:43:45] Casey Golden: Welcome back everyone.[00:43:51] Ricardo Belmar: I hope our listeners enjoyed that discussion as much as we did. And the best part is we've got Andy here with us now. Welcome to the show Andy[00:43:59] Andy Laudato: Yeah. Hello, Ricardo and Casey. Great to see you again.[00:44:02] Casey Golden: Great to see you actually see you.[00:44:04] Ricardo Belmar: Exactly. Yeah. It's so great to see you. Although I guess our listeners can't see you, but that's okay. We can see you that that's what counts here. And in this case it was a real treat. Having you join our clubhouse room, Andy, and as usually happens with these sessions, right. There is just so much to talk about.[00:44:19] It seems like we never have enough time to get through all the questions we want to ask and talk about. So in that spirit, we've got a few more questions for you[00:44:27] Casey Golden: Talking a bit about career development. This is an important part of your book. And I've heard, you mentioned 70, 20, 10 rule. I love it. Can you fill in our listeners on what this means?[00:44:40] Andy Laudato: Yeah, absolutely. So a lot of people, when they think about career development, they're looking for formal training. This could be going to a class or even out of college. You know, continuing education, but in the 1980s, it's something called the center for creative leadership. They did research and said, actually to develop in your career, formal training only will give you about 10% of what you need.[00:45:01] So although it's important, it's not sufficient. And what they learned was that 20% comes from interaction with others. This could be what you learned for directly from your boss or mentors. So formal training and feedback directly from others, get you to the 30%, but the bulk of what you get to be successful in the move up in your career comes from actual experiences.[00:45:24] So the 70 20 10 rule says that 70% comes from actual experiences, 20% from others and 10% from formal education. So that means if you're working with someone that works for you or you're looking to grow your career, you really need to look for opportunities to immerse people in the job. So this could be job shadowing.[00:45:42] This could be a stretch assignment on another team. You know, this could be a hanging out on a special project. So it's just really important to think about. Don't just be pounding, the fist demanding formal education, although important. It's not, the whole picture.[00:45:56] Ricardo Belmar: I really like that approach. It makes a lot of sense. So Andy understanding that rule now, what else can you tell us about your hiring preferences and practices?[00:46:05] What, what do you look for in a candidate?[00:46:07] Andy Laudato: Yeah. So I look for things that I can't teach somebody. I always say these are things you learned from your mother, or you got genetically, or you learned them in kindergarten, but by the time you get to me, it's too late. Right? So. I start with integrity. Someone needs to be honest and always do the right thing and, you know, without integrity, nothing else matters.[00:46:25] And again, I don't feel like I can teach someone or coach someone to have integrity by the time they get to us. That's already been kind of ingrained in who they are as a person. The second one is intelligence, I can't make someone smarter. So that's my second one. The third one is ambition. Again, these are the things that people kind of come with inherently. What's your learning style? What are you doing to learn? Do you have drive or are you proactive? Do you push? And then finally temperament, you know, look in retail business there's ups and downs. And so, how do you handle yourself when something goes awry? So, yeah, all four of those integrity, intelligence, ambition and temperament are things that I specifically interview for because I feel like whatever the skill is that you need, whether it's, programming or creative, these are the things that people and should be able to learn.[00:47:16] And especially in technology where things change so rapidly anyway, right? If you're an expert on this tech in two years, we're going to be using that tech. And so if you have the ambition and the intelligence and the interest of learning the new, you're going to be a more successful.[00:47:30] Ricardo Belmar: Yeah, that really makes up for whether you have the existing skill or not, it's something that you can learn, but it's the things that you can't learn that harder ones to seek out.[00:47:39] Andy Laudato: Exactly.[00:47:40] Casey Golden: you mentioned in your book. You talk about the true org chart is the informal one. What do you mean by that?[00:47:47] Andy Laudato: Let me explain it, Casey, with an example. So you'll hear every person, who's a CIO say, I need a seat at the table. I have to have a seat at the table. There's a book called a seat at the table and you can demand it. You can insist on it. You know, you can do that, but so much, so much decision making at a company doesn't happen in the formal meetings.[00:48:06] So to me, the informal org chart is when the CEO's looking to brainstorm on ideas, who's he going to invite to have a coffee or who she can invite to have a coffee, go to lunch. Just, you know, I want to run an idea by you. So to me, the informal org chart is where some decisions and debate, discussion, and brainstorming happen in a company that may or may not be how it's listed on the formal HR organizational charts.[00:48:30] So to me, more important than a seat at the table is kind of a seat at the coffee shop. That you become the go-to person.[00:48:38] Ricardo Belmar: you want to be the person that somebody, everybody calls.[00:48:41] Casey Golden: Yeah, I got most of my budgets approved in the hallway.[00:48:48] Ricardo Belmar: Isn't that true. Yeah. That's how it works. That's how it works. It's so true.[00:48:51] Andy Laudato: Yeah. Another really important person on the informal org chart is always the executive assistants,[00:48:57] Ricardo Belmar: Yeah.[00:48:58] Andy Laudato: Cause they got to decide[00:48:59] Ricardo Belmar: But right. Yeah. Like the kind of the ultimate gatekeeper. Right. And who gets time.[00:49:03] yeah.[00:49:03] Yeah. That's right. That's so true.[00:49:06] Andy Laudato: leaders in a company.[00:49:09] Ricardo Belmar: Yeah,[00:49:10] absolutely.[00:49:10] Andy Laudato: I remember that. Yeah,[00:49:12] Ricardo Belmar: I'll walk and talk. Yeah. So true[00:49:14] Andy Laudato: I have, when I was early in my career, my boss was a smoker and we used to have this smoking room and that's how old this story is from the nineties. And if I wanted to meet with them, I had to go suffer it out, you know, in[00:49:24] Ricardo Belmar: in the smoking room.[00:49:26] Andy Laudato: Yeah, I think I probably took five years[00:49:28] off my life getting face time with my boss.[00:49:33] Ricardo Belmar: You go, sometimes you have to do what you have to do, right. To get the time.[00:49:36] Andy Laudato: Exactly.[00:49:38] Ricardo Belmar: So one of my favorite concepts you bring up in the book, Andy, and something, I don't think we got to in the clubhouse sessions, which you call be a diode. Can you talk us through that?[00:49:46] Andy Laudato: Yeah. So a diode is an electronic component. That's actually found inside computers, phones, and even everyone's actually heard of diodes because it's the D and light emitting diode or LEDs.[00:49:57] Ricardo Belmar: right.[00:49:59] Andy Laudato: And so the very simple thing that a diode does is it allows electricity to flow unimpeded in one direction. So the electricity goes into the diode and comes right out, but it completely blocks the flow of the electricity in the other direction.[00:50:12] And so it's really important for computers because it's how we make gates to say yes, no on-off which ends up being binary. So the analogy that I like to use in business is that if you become a diode as a leader, anytime there's any kind of complaints, anger, problems, you as the leader block those. So just like the diode blocks of electricity, the current flowing in one direction you take all of the crap and stop it with you and don't let that ever get to your team. Now in the other direction is when there's praise compliments, you know, good jobs, those should flow right through the leader, not take the glory, but let that flow to your team. So if you're a leader that stands in front of the problems and protects your team, but doesn't stand and take the praise.[00:50:58] You give that to your team. That's my analogy for being a diode as a leader. And I feel like the very best ones are the ones that exhibit these behaviors.[00:51:05] Casey Golden: Absolutely.[00:51:06] Ricardo Belmar: I love that one. I love that concept.[00:51:08] Casey Golden: Yeah. I've never heard it like that before, but we we've all experienced that I feel in our careers. That's great. One last question for you, Andy. And this one is probably something you get all the time. What's the most important takeaway or lesson from your book?.[00:51:21] Andy Laudato: Yeah. . When you think about innovation, what innovation is, is spending your companies, treasures it's money, it's talent, it's people. And it's time on something that probably won't work, right? Whatever data you look at, one in 10, things work one in 20 weeks. You know, you talk about having a career. We have all had[00:51:38] Ricardo Belmar: Yeah,[00:51:39] Andy Laudato: wonderful ideas.[00:51:40] We spent time and energy[00:51:41] Ricardo Belmar: right. That's right.[00:51:42] Andy Laudato: they don't work. And so in order to successfully innovate, you need to earn. And you earn the right by a building, a really well-run organized, trusted, you know, machine, And so that's why my is called fostering innovation. It's not called innovation. My book's really not about innovation.[00:51:59] It's just creating this environment where have a firm foundation. People have psychological safety, you're in the right financial place that you're able to take time and money away from the day-to-day activities of running the business so you can stretch on innovation.[00:52:14] Ricardo Belmar: Well, I love that, that makes so much sense, like so many other things, even in the retail business, , when you don't have that foundation, It's really hard to build anything successful on top of it. It's so critical to get those details, all those core elements right.[00:52:28] And when I run through the book , you really bring that message home that it's not about the innovation necessarily as much as it is having that environment where innovation can happen and setting yourself up the right way so that you can create innovation because I think you're absolutely right. The whole premise is that, one out of 20, whatever it is is the one that's going to work and the other 10, 15, 19 aren't. that's okay. As long as your foundation let's you keep going.[00:52:56] Andy Laudato: Yeah. Now that we're having in-person conferences again, I was just at a conference and I think then all the years when I go to conferences, there's always those few people that spend the entire three days in the hallway on their cell phones, talking back to the office. Cause they've got an implementation gone wrong or network down issue.[00:53:11] Right. And so this to me, visualizes, the example of the person who's not in the presentation, learning about new things, innovating, interacting. Even though they spent money, they've ended up having to deal with putting out the fire, back home. And so it's just one real life example that, and you'll notice it now, but there's every conference, there'll be somebody[00:53:32] Ricardo Belmar: right.[00:53:33] Andy Laudato: unfortunate, somebody that's in a hallway on, you know, on the phone, dealing with that.[00:53:37] They don't have a firm foundation.[00:53:39] Casey Golden: That's And I think there's, there's so much value right now. So you kind of have these conversations. So many brands and retailers have inherited their tech stacks, or haven't really gone back to the foundation and really looking at it for can we implement new technology? What do we have?[00:54:02] What's what is already in the works? And I thought you had a really great perspective something that I've really taken away. Is insights on project management for new technology initiatives on how to actually complete them? And I thought it was great, but I think every brand really should be looking at kind of doing house check, you know and kind of going back to that foundation and saying, well, just because we've been doing it for the last 25 years or 30 years. You know, most of the team is inherited what's existing and you're always working on what's oncoming on your plate and you have, there's no shortage of fire drills. We all know that. There isn't a lot of time dedicated to going back and looking at the foundation and saying , how are we set if we start stacking on top of this?[00:54:49] Andy Laudato: Yeah, . Some people think it's boring or, you know, it's not value add, but I kind of make the joke that. Well, if you look at a pyramid, you always look at the top and go, wow, look how tall that pyramid is. Right? No one looks at the bottom rows. Isn't that amazing, but[00:55:01] Ricardo Belmar: Yeah.[00:55:02] Andy Laudato: I bet there was some pyramids built with a really bad bottom row that just don't exist[00:55:05] anymore.[00:55:06] You know, only the ones left[00:55:08] Ricardo Belmar: yeah. Yeah. Cause they're[00:55:09] the ones that didn't have that, that bottom foundation. Yeah.[00:55:11] Casey Golden: no, it's great.[00:55:13] Ricardo Belmar: Very true. Well, Andy, I have to say it's been a pleasure having you on the show and I really hope that we can get you back on soon. And of course, to have one final recommendation to everyone to rush out and buy a copy of Andy's book, Fostering Innovation.[00:55:26] You'll be well rewarded for your efforts for giving it a good strong read.[00:55:29] Casey Golden: I agree,[00:55:30] Andy Laudato: Thanks for having me. It's been fun.[00:55:32] Casey Golden: Yeah, Andy, if listeners want to learn more about you and follow your work, what's the best way for them to connect with you or stay in contact with some of your content,[00:55:41] Andy Laudato: Yeah, for me, it's all about LinkedIn. In fact, in my book, I talk about how I use social media and LinkedIn is my one and only business platform. And so I think it's pretty easy to find me. The only trick is I go by Andrew on LinkedIn. That's my name on my birth certificate, but I go by Andy to my friends.[00:55:57] But as long as you know, Andrew, then you'll find me easily.[00:56:00] Casey Golden: Perfect.[00:56:01] Ricardo Belmar: there you go. Well, Andy, thanks again for joining us.[00:56:03] Andy Laudato: Yep. Thank you both.[00:56:04] Casey Golden: Well, it's time to call this one a wrap Ricardo.[00:56:07] Show Close[00:56:07] Casey Golden: if you enjoy our show, please consider giving us that special five star rating and review on apple podcasts. Smash that subscribe button in your favorite podcast player so you don't miss a minute. Want to know more about what we talked about today? Take a look at the show notes for handy links and more deets.[00:56:26] I'm your cohost Casey Golden.[00:56:27] Ricardo Belmar: And if you'd like to learn more about us, follow us on Twitter at casey c golden and ricardo underscore belmar, or find us on LinkedIn. Be sure and follow the show on LinkedIn and on Twitter at retail razor, and on our YouTube channel for videos of each episode and some bonus content. I'm your host, Ricardo Belmar.[00:56:43] Casey Golden: Thanks for joining us.[00:56:44] Ricardo Belmar: And remember there's never been a better time to be in retail. If you cut through the clutter.[00:56:51] Until next time, this is the retail razor show.