Transcript
Peter:
Hey everyone, Peter Crosby from The Digital Shelf Institute here. At a time when every step in the consumer journey must feel safe, retailers have an opportunity to revisit the power of technology and their people to signal safety while reintroducing moments of discovery to drive sales. Gwen Morrison, former CEO of WPPs global retail practice, and a partner with Candezent Advisory brings her vast experience working on retail innovation to a new moment and a new challenge. But once she knows retail will conquer. Here's that conversation.
Peter:
Gwen, thank you so much for joining me. I'm just going to jump right in. You recently did an article in the Robin report and there was something about the, in the first paragraph that just jumped out at me. It was talking about all the new innovative retail experiences that we were celebrating at the beginning of 2020 at NRF. And in your words, in that article shuttered by the pandemic, and it's heartbreaking to think of, you know, the retail we were preparing for just months ago that has now really been upended.
Gwen:
Yeah, yeah, absolutely. They, and especially that social aspect of shopping, I had prepared a presentation called 20 commerce trends for 2020, which I did present as part of NRF. And I took a look at that presentation just a few weeks into the pandemic and realized that I really had to tear it apart and start all over again, because there were so many aspects of it that linked shopping to social experiences and certainly like the Starbucks roastery and you know, all these other types of flagship stores, um, just didn't seem relevant in terms of the kind of interactive third place kinds of spaces that, um, you know, were really celebrated, uh, towards the end of last year, the award winning flagship stores. So when you think about what's happening now and into the future, you don't think of the rapid acceleration of purchasing online, particularly, uh, categories like grocery and the adoption would have been much slower, uh, particularly in certain demographic groups, but we've seen a sizable shift across many shopper segments, and we also see a different cadence of purchasing altogether.
Gwen:
So you think of purchase occasions, you know, we're really seeing shoppers adapting to a whole new type of shopping ritual, like, you know, standard replenishment items are getting to the home delivered to the door. Um, and you know, the shopping for inspirational types of products has become much more constrained because people just don't have the confidence of going into physical retail as we did. So that's this acceleration, you know, how goods get to the home and the role of physical retail, um, could be really transformed at a much more accelerated rate, almost what we predict for 2030. We're going to see that closer in as you know, we see the rapid adoption of new technologies.
Peter:
Yeah. That acceleration is something we've been seeing across the board. Right. And, and I, um, when you start seeing Sephora signing a deal to have their stuff delivered by Instacart, you know, that, that things are getting upended.
Gwen:
Absolutely. And those kind of formats and, uh, you know, the cosmetics and beauty, it was all try before you buy, uh, you kind of, you know, just transition into that beauty counter, whether it's a dedicated store or, um, you know, a counter within a department store format and well, with the combination of the masks and the, we were, don't see anyone treating themselves to a lipstick like we did in the last recession. So that's just the impulse shopping and, and what, uh, categories, uh, have traction and relevance today is really shifted.
Peter:
Well, you, as when you and I were planning for this podcast, you talk, you were at a recent virtual event where someone from Dunnhumby, I think it was talked about a worry score, which I think sort of ties into what you're talking about. These changes here. W w what did that mean to you? What did that, what did that cause you to take away from how retail needs to respond?
Gwen:
Yeah. I hadn't heard that type of a measure before, and that was at the retail leaders forum, which typically takes place in Sydney every year. It was a virtual event, uh, just last week. Um, and it's really, um, you know, when you think about traditional browsing, as I've mentioned, people choppers would get information, uh, when they browse and they also shop for pleasure. And so it's this social and experiential aspect of retail, that's sort of, we're celebrating. And yet you fast forward to today. And we see shoppers with lists and they're dashing and darting trying to avoid each other, trying to avoid anticipate is that person shop stocking the shelf heading my way or the other way
Peter:
Which rows do I follow, which way can I go? Yeah.
Gwen:
People don't always follow. So there's, you just don't understand, um, what to expect. And so the pandemic has honestly, Insta instilled a sense of worry that it's hitting the retail industry hard. And it's obviously taken the rug out from all of our, you know, anticipated, you know, targets and goals and metrics. And, um, it's a, it's, uh, been drastic.
Peter:
Yeah. It's a real reset, I think. Yeah. And in that, in that function where there's a worry score where you retailers need to think about the mindset of the consumer, what, what makes them feel safe? What reduces their worry so that they are able to engage in the retail experience. And, and you, you talked about the need to reimagine that experience by revisiting shopper's needs and wants. Tell me a little bit.
Gwen:
Well, absolutely. So when you have this environment of literally a cloud over the whole cattle industry, where, uh, people are number one concern for their safety, um, we have to rethink every aspect of the functionality of the store. So a couple of examples at the B I was, um, interested when I had gone downtown Chicago, uh, not too long ago. And we had the unfortunate, um, intersection of, you know, the looting on top of this crisis that we have today. And you see the boarded up stores and people kind of, you know, again, kind of moving around masks on and so forth and darting, and, you know, trying to step aside from one another. And what I saw was sort of the longest line trying to, to a retail, uh, front was the cupcake ATM called the sprinkles. We talked about that, the customer, just so that format, which had existed prior to this crisis, um, had almost new relevance, um, where people were socially distanced outside of that ATM from one another. And yet they loved and continue to delight in this interaction of just putting their credit card into a machine and getting a cupcake out of the ATM. So I think it's interesting to look at the combination of formats that seemed almost, um, a novelty, you know, take an Amazon go. Other types of autonomous retail, you'd say, well, we don't need that. Look at the amount of expense that's packed into this format, all these cameras and everything, you know, all the RFID and the, all the geo fencing type of technologies. And then, um, today fast forward to today, it has incredible relevance. On the flip side, you're seeing retailers that have, you know, standard formats that have been relevant for years and years. Um, thinking about the retailer in the UK called Book Hive, and it's a place for browsing. Uh, it has very narrow aisles.
Gwen:
Um, lots of books on display. The whole experience of shopping for books is about interacting, getting ideas and suggestions. So they've had the, um, through more interactive window displays, how that they can engage with people on the perimeter of the store. And so I start looking at, um, perimeter of the store and ways to engage in interactive windows. And you can start seeing a vision of retail, um, as, uh, integrated with, out of home interactive, dynamic communication and, uh, and vending where's the fulfillment component to that. So I think that's what we have to start looking at as a way to get people more, um, comfortable navigating urban and mall spaces, um, to put together the combination of, uh, interactive, um, touchpoints that are non touchpoints, low touch, low touch, or no touch, but can also become a highly experiential.
Peter:
And that's, I think what we're seeing across the board is that when there's digital involved, the, um, the folks who are thinking about those experiences need to think about both from a performance marketing standpoint, is what I'm designing, going to convert to the next stage of the funnel, but also needs is every one of those moments as a brand moment as well. Like, I think you mentioned how McDonald's is trying to draw people into the store.
Gwen:
Right? Well, that was an example of a outer nets, uh, installation, where they're combined some of the geo fencing technology identifying through the app who is in range of that storefront, and then really celebrating the image of, you know, this person, um, uh, chomping into the burger. That's the perf as the favorite item, the favorite item that this, uh, ship
Gwen:
So you're able to personalize the image in the window. And we've seen examples, um, over the past few years of these more interactive windows, but now it becomes personalized and becomes just, it kind of draws you in. And now you think about, well, how do you take that to the next step? How does that burger, if you say, yes, that's what I want, my typical order. Um, how has that prepared even faster and how are you not maybe mingling into a physical store? You can start to take these things to the next level, which is pretty exciting. And again, demonstrates that, um, need for acceleration, uh, not just a nice to have, you know, kick the tires at the CES show concept, but now stitching some of these technologies together. And I think you and I have talked about the, um, the importance of voice and all of this. Can I now talk to the window, um, using my voice rather than touching all these things,
Peter:
And you're seeing retailers step up to that moment of being more agile and, and bringing these things to market faster.
Gwen:
I think there's a lot, there's a lot in the pipeline. I don't think we've seen, I think retailers quite honestly have, uh, you know, done an amazing job and there, you know, being nimble, transforming, um, ways to get items you think about, um, you know, some of the, the pickup tower, for example, at Walmart, has the target doing, you know, you kind of, uh, you get to target with your car running, you know, running to target with your car running. I think it was the, um, the message, uh, so think about how that's had to change the roles of everything, you know, the way they look at inventory, the way they're deploying, uh, people that were typically on the floor. Now, those people might be boxing up orders that are already done. It's just so operationally, it's been an incredible challenge for retailers that parallel to that.
Gwen:
It's how, um, they're developing new, uh, concepts that would be highly relevant. And I'll use Walmart as an example, again, taking the front of the store and some of that, um, physically take the physical, uh, format that they have and say, how do we reimagine checkout? How do we make it more efficient? Um, there's always been anxiety at a checkout line when you're talking about, uh, a Walmart or you're talking about a McDonald's or, you know, the first thing that shoppers want to know was where's my place in line. So, um, at various stages, um, of the shopping trip, so to take, uh, make automate it, and yet still have the, uh, um, employee standing there interacting in a more human way, shows how we have to kind of advance this notion of, uh, how the digital world can actually humanize and experience. And I think that concept, you know, putting a sales associate into that process where they're helping and talking and making eye contact with the shopper is a great example of that.
Peter:
And yet still doing it a, in a way that reduces the worry score.
Gwen:
Right, to make it less word it's, you know, space, it's a combination of space, uh, and, and using that space really efficiently. Um, but I hit that next level is going to be how you now take that footprint and say, well, how is fulfillment happening? What shoppers, what do they really need to see, um, versus how we can make that time in the retail environment? Um, more, um, about exploring and more about aspiration because that part of shopping has really diminished.
Peter:
You talk about discovery mode versus mission mode. Tell me a little bit about that.
Gwen:
Well, I mean, today in an environment where safety is our utmost concern, people have a pretty planned mission when they go to a store and even the high-end retail is becoming an appointment only. Um, but on a day to day, take it to the grocery or even going into, um, you know, a mass format or a Home Depot or Lowe's, uh, people are pretty organized with what it is that they're looking for. And so they're using more social media tools. Um, they're the visual tools, Pinterest, for example, and, um, to get their ideas and inspiration. They're not getting it through the visual merchandising so much in the store. So we have to say, well, how, how can we get that back? Um, and if shopping is so much about it is discovery. People go to stores to either get ideas to socialize and, um, you know, to learn more about a particular category, depending on the price and level of involvement, but that part is maybe being done more at home. So now we have to look at that continuum of what happens at home and how that becomes a better experience versus frankly, what is still online shopping. It's a very kind of catalog and clunky. It's not inspiring.
Peter:
Yeah. I think, you know, it's what we were talking a little bit about earlier, the need to integrate the brand experience into the performance marketing and what we've been talking to a lot of executives about is the need that, that requires for a lot of these existing silos of kind of the traditional brand marketers sitting over here. The digital market is sitting over here and neither the Twain nor their budgets shall meet. And it doesn't seem like that's sustainable.
Gwen:
Well, that has to be, uh, accelerated change as well. Um, we've seen that over the years, just in the shopper marketing budgets where you'd say, well, I'm getting brand visibility, I'm getting brand engagement in a physical environment. So how can we maybe spend more for those, you know, promotional elements let's call them, um, that are actually brand building. And it's, this has been a discussion for at least 15 years on how to allocate, how do you justify, uh, something that's visual, that's really attention-getting and interactive, but it has to have the lift. Well, can you also, um, count the engagement and interaction? Um, so these lines are going to continue to blur. They have to blur, and I think we're going to have to look at metrics as you mentioned, um, quite differently. Um,
Peter:
And you think about, um, think of the experiences that exist that really aren't particularly safe right now, if you think of where we all used to, you know, crowd into, into a theater or a crowd into a stadium, you know, what, what are the way are you seeing any, any innovations in terms of finding a way to bring that, that visceral experience of being somewhere into the virtual?
Gwen:
Well, I'd certainly like to see more and what, and again, we'd look at some of these, um, innovations, uh, what comes to my mind is, uh, some of the wearable technology, um, that, um, brands have really experimented with, um, uh, on-premise that gives you the, for example, the exhilarating feeling that the crowd would have in a stadium, but you're in a bar and you're wearing that fan Jersey and you can get that same feeling or even being at home with a small number of people with something, um, you know, wearables that are embedded with sensing, uh, sensory technologies, um, really is, uh, an open area I think, to explore. And that's not brand new. Um, these technologies have been, you know, presented, um, for five years, at least. So, um, I think we're going to have to circle back and look at how some of those experiential, um, and sensory, um, technologies can be deployed, uh, whether it's wearable or something else, you know,
Peter:
And when you think about it, there are some parallels to be drawn from this time to the 2009 recession, right? Where, where the world shifted under our feet, not perhaps not as dramatically and on so many levels as now, but, um, you know, if we're looking for hope that people can adjust and retailers can adjust in the moment, do you take any of those lessons away and apply them to the game?
Gwen:
Well, it's interesting you mention, I do a look back to that time and look at some of the parallels and the differences. And some of the parallels are of course the worry and the economic hardship. Um, for many, it was a loss of jobs for others. I call it a balance sheet loss where they saw, you know, investments, uh, on paper, uh, changed dramatically, but actually, their monthly income did not change. Uh, it was a time for, um, lots of shopping to take advantage of incredible bargains. There was so much inventory out there. So now fast forward to today, uh, less inventory out there prices actually went up in a lot of categories. Uh, there was limited supply, um, and people, again are not, um, hitting the stores because of that. Um, safety concern described. So, um, what I did at that time, I did a lot of work.
Gwen:
I just happened to be doing a lot of work in, uh, retailing and emergent markets. And it was a project that was funded by, uh, Coca-Cola retailing research council CCRC. And we were looking at the capabilities of retailers that not just survive, but thrive in these incredibly to multiparous environments. And so we went into like South Africa, we were in Brazil, we were, we were all over the world and places where, if it's not, you know, hyperinflation that hits at some social-economic or political issue that hits it's about safety. I mean, people are shot in the parking lot. I mean, if you're in South Africa and you're a retailer, you don't know what the next day is going to bring, you know, the truck drivers are on strike. There's just always something. And I talked to a retailer in Silverado, a pick and pay franchisee who was in 2010, I want to say texting his customers about the sale price on Mays. And this was a year where I think Walmart and maybe Sears had experimented with it texting. And it was, it didn't work at all. In The United States, people were offended. It was an invasion of privacy. I didn't ask for this, but the relevance to, and the importance of that communication in. So WeDo what just blew me away. And that the upshot is that it's, these kinds of situations can help, uh, facilitate the necessary leapfrogging, um, that, that is transformative at retail. So I've taken the lessons from these emerging markets, incredibly challenged dynamic markets. And so what are the lessons there? And the lessons can be applied to this, uh, environment today. So it's that, you know, embracing technologies that really can serve, uh, conserve shoppers in new ways that, uh, really help them. And you're on their side being on their side and, and making them feel like you're on their side.
Gwen:
That empathy is so important. So as an example, another retailer that was in Poland, um, had committed to holding prices during an economic, a terrible recession and the same thing. And, um, yeah, it happened in Turkey, a retailer named BIM, they committed to holding those prices the same for three to four months. And that coming to the aid of that shopper was huge. And that, you know, that was their promotion budget for the next 10 years. They didn't have to. And I, I talked to the CEO, he said that, why do I have to do anything else? I've already done it. And that was an investment that paid off big time. So these lessons about, you know, being a part of the community, I think that can really, um, be so important for retailers today. You know, whether it's, you know, issues of sustainability, um, that retailing with a purpose message, it's an opportunity for retailers to really say, how am I embedded in that community. This is my customer. Be very real with, you know, what their needs are and come up with creative ways to redeploy assets, um, to, to meet this, um, moment that none of us anticipated.
Peter:
Yeah. I think I know I'll speak for myself. I can tell the difference between a brand that has invested in that viewpoint has thought, how do I actually impact the experiences that I'm having with my consumers right now to signal those things versus the ones that sort of have been performative about it, if you will, there are some that are running the ads but are changing the experience in a day to day way with their consumers. It really does. I would imagine, needing to look at the various steps in the consumer journey and thinking, how are we shifting in each one of these important tasks?
Gwen:
Yeah. And that's the branding from the inside out, you know, it's like, you have to be, you're the walking brand, your people in the store, walking brand, how are you engaging with them and not like approaching them, which I've seen. And it's, it's so hard on a human level to be in a retail environment where someone who's a sales associate is trying to be helpful, but they haven't shifted their behavior and their behavior, their way of being helpful is, of course, to come up to you. And you're like, well, no, that's not what, I'm it's. So this is, uh, all types of, um, you know, pretty dramatic change, um, that will have to shift as time goes on. And I think as we were looking at, you know, we're all in March thinking, well, we'll give it six weeks and then I'll get on the plane, cause this will have passed.
Gwen:
And so again, I think retailers have done a tremendous job and being agile and adapting and coming up with new ways to, you know, make everyone feel safe within their format that they have. But now it's, well, this is going on, you know, winter is coming. You have, I talked about some of those experiences I've witnessed where people in the US are outside of a Costco. And, uh, I was in Tucson, Arizona. It gets pretty hot in the summer. And, uh, you know, how can you be outside, especially older people when it's 110 hundred 15 degrees or approaching winter in other markets. And, um, let's imagine an environment where we're approaching a parking lot. We're, um, recognized, uh, immediately with the geo-fencing technology. So we're not having to be anxious about getting a parking space, cause we already have a number in the queue that should just be happening. And, you know, Starbucks has that technology too, that, you know, we're always being identified when we're in range. Um, we're using Yelp and other formats of Foursquare and so forth all the time. So why isn't that, that needs to be cobbled together for lack of a better word with the other technologies that we have. So the app, I should not be shopping from my parking space in my air-conditioned or heated vehicle. Um, why can't I be using a voice to be able to, and can I be seeing the aisles in the store so that I can start to discover, um, should all of the merchandise that's in the store, be more about, um, the seasonal and the aspirational rather than replenishment. Do I really need to see that? Um, so I think we're going to see, um, this leapfrogging, if you will, this transformation where so many of these technologies that have been one-offs, um, start coming together and a much more cohesive experience will come. So the shopper can have this more self-guided and more secure, um, shopping trip that still, um, brings brands and ideas to life.
Peter:
I love that cause, you know, bringing it back to the worry score every, every stage in the journey where you can reduce that worry and make people more willing and able to connect with their discovery rather than their mission.
Gwen:
Right. Then the other human beings too. I mean, I had, when I first went to the, um, mentioned McDonald's a few times, but went into the, uh, McDonald's that had the touch screen, um, ordering system. And it changed the role of the crew person behind the counter because there's a, I've worked on McDonald's business over the years. There's always that pressure again, who's which is the fastest line, is that group person fast enough, you're squinting to see the, you know, menu board behind the crew person, the crew person, every time they turn around, that's actually a negative interaction for the shift for the consumer so that it just took away that whole pressure. Now the format is different. I can say, you know, I would like to customize my menu item and I'm not going to be bothering the person behind me to do that.
Gwen:
And the order is going to be right. And, and all of a sudden the crew person, who's bringing you the meal, you know, they have the sensor that's on your table. So they know exactly where it goes. You could use your time to find a table rather than be standing in the line that the crew person says, are you having a nice day? And I was like, wait a minute. People McDonald's never have time to ask you that they don't and that's understandable, but the technology allows for the human interaction to be real, to be authentic. And that, that leaves a lasting impression.
Peter:
Yeah. I love the idea that we should be using technology at this time to make the human interactions that are left more important in a more meaningful way than ever before. Now you talk about drones doing inventory checking instead of your people doing inventory checking so that your people can, can help the experience come alive.
Gwen:
Exactly. And again, you know, I saw NRF had drones and the innovation floor, and now they have maybe a more important and relevant position in the way we're going to look at how a S a box operates. So it kind of goes back to the fundamentals of retail, can we not just take this box that we have and make it work the way it worked? How do we make it operate differently? And now put all of this, what we're calling unified commerce, all of these pieces together, and it starts with consumers with their needs and wants in the home. And how do the needs get fulfilled differently maybe than the ones?
Peter:
Well, I, I love that through your research and your experience, you are able to point to, uh, that retailers in these moments of, pressure and rapid change have responded in the past and they will do so again. Yeah. Gwen, thank you so much for joining us on the podcast to bring your experience and passion for, this space, to our listeners. I really appreciate it,
Gwen:
Well, thank you for having me. It's been a pleasure
Peter:
That's today's episode. There are so many issues brand execs are grappling with in this move to a digital-first omnichannel model, and we are doing our best to cover them at the DSI over the next several months. See what we're up to at www.digitalshelfinstitute.org. Thanks for being part of our community.
