Back From ShopTalk Fall 2024

On November 7, 2024, the Lille community specializing in e-commerce and retail had the exclusive opportunity to hear insightful feedback from Laetitia Lamari , Michel Koch , and Adrien Naeem regarding the fall edition of Shoptalk in Chicago. The event took place at Suppleo 's headquarters and was sponsored by Shopify . Nicolas Malo , CEO of our agency, was also present to share key takeaways, summarized below.

Shoptalk is a landmark event in the retail and e-commerce industry, focused on innovation, new technologies, and emerging trends. It brings together professionals from various sectors—retailers, brands, tech providers, investors, and media—to discuss industry advancements, strategies, and tools shaping the future of commerce. The fall 2024 edition of Shoptalk, held in Chicago from October 16 to 18, attracted over 3,000 participants.

Although the U.S. presidential elections were not directly addressed at the event, they were on everyone’s minds.

A Divided America: Communication between individuals seems strained, with two strongly opposed camps. There’s a palpable sense of a divided, almost irreconcilable America—a sentiment reinforced with each visit by Michel, Laetitia, and Adrien.

Potential Impact of Donald Trump’s Election on the U.S. Retail Sector

• Tariff Policies: There is a risk of new customs tariffs, which could lead to higher consumer prices and disruptions in supply chains.
• Inflation: A temporary inflationary shock could occur, followed by indirect effects like a reduction in GDP and currency fluctuations.
• Strict Immigration Policy: Restrictions could make recruiting difficult within the retail sector.
• Tax Cuts: Measures like the Tax Cuts and Jobs Act are expected to increase consumer purchasing power.
• Corporate Tax Rate: A reduction in corporate tax rates is anticipated, as well as the potential elimination of taxes on tips and the repeal of taxes on social security benefits.
• Energy Costs: Commitments to lower energy prices could support consumer spending.
• AI Deregulation: The removal of existing legal constraints would allow unrestricted use of artificial intelligence.

These outlooks remain uncertain due to possible legal challenges and delays in implementing these policies.

Being a retailer has never been more complex. Today, the fragmentation of commercial channels divides into three main categories:

• Owned Channels: Physical stores and brand websites.
• Multi-Brand Distributors: Both in-store and online (2nd party).
• Distributed Channels: Marketplaces, search engines, social media, and second-hand platforms.

The Importance of Customer Experience A positive customer experience boosts retention by 70% (1.7 times more loyalty). Even loyal customers can be lost after a single negative experience—32% of consumers switch brands following a bad experience. With easy access to competitors, providing a flawless experience is essential.

When "Non-Retailers" Enter Retail: The Case of Douyin

Douyin has become the top marketplace in China, delivering impressive results in the cosmetics sector, with an average of 800 million monthly users and $15.4 billion generated in China. Owned by the same parent company as TikTok, this platform transformed from a social network to a major retail player in just one year. It now ranks as the 6th largest online retailer globally, with a unique customer profile: 56% of its consumers are male. This new player is experiencing explosive growth. In China, there’s also a noticeable decline in influencer impact, with users increasingly trusting the platforms themselves over influencer recommendations.

Brands vs. Retailers

Retailers are increasingly adopting branding strategies, while brands are behaving more like retailers. Currently, 17% of e-commerce is conducted through direct-to-consumer (DTC) channels by brands and Digital Native Vertical Brands (DNVBs).

Convenience vs. Experience

Consumers want to see products before buying, highlighting the need to balance ultra-convenience (such as contactless stores) with highly personalized experiences. The new generation values in-store experiences above all, even if the final purchase often occurs online. There’s a tension between simply offering products and creating immersive experiences. Notably, 81% of Gen Z prefers to visit stores in person rather than shop online—the highest percentage across all generations.

AI for Performance: The 5 Cs of Generative AI

1. Consumer Journeys: Optimizing the customer journey.
2. Concision and Copilot: Providing summaries and virtual assistants.
3. Coding: Automating and accelerating development.
4. Creative Content: Creating customized, creative content.
5. Corporate Automation: Automating internal company processes.

Examples of AI Innovations in Retail

• Fabletics: Founded by an American actress, this sports brand features a subscription model centered on technology and real-time hyper-personalization. Ninety-five percent of its revenue comes from subscribers. Access requires signing up through a well-designed 10-question quiz that helps build a personalized profile, increasing conversions by 28% on the first visit. Data-based customer experience improves with each interaction.
• Personalization 2.0: This trend focuses on individualization, fulfilling the one-to-one marketing concept envisioned in the 1990s. Some platforms, particularly in China, are leading the way. For example, Shein’s entire experience relies on personalized content and AI, delivering “the right product at the right time to the right person.”
• Ulta Beauty: Uses AI for skin analysis and personalized product recommendations in-store and via the app. This allows customized skincare solutions, enhancing customer loyalty and experience.
• McDonald's: Implements AI for drive-thru orders and equipment maintenance. Based in Chicago, the company has used France, its second-largest market after the U.S., as a testing ground for innovations. In France, McDonald’s piloted Europe’s loyalty program and set up a multilingual drive-thru system, particularly beneficial for Spanish-speaking populations in the U.S. AI is also used for maintaining equipment.
• Poshmark: Shoptainment through live streaming. Customers can shop online and in real-time with influencers.

Generative AI Challenges and Outlook

Generative AI currently represents only 15% of use cases.

• Focused Transformers: Companies that maximize financial impact with targeted AI applications.
• Success Factors: Success in AI adoption depends on a solid culture and training, aimed at enhancing rather than replacing customer service.
• Risk Management: Managing AI-related risks is becoming crucial for sustainable adoption.

Brand Power and Trust

The fashion sector is undergoing a profound transformation. In the U.S., fashion retail generates $424 billion annually.

Next-Generation Fashion Brands

• Rent the Runway: Originally focused on online evening wear rentals, this brand is now expanding into physical stores. Its content strategy is highly targeted and multigenerational, with a major focus on building a long-term physical presence.
• Glossier: This direct-to-consumer (DTC) brand, founded two decades ago, built a strong community initially through a blog that evolved into a collaborative Slack platform where customers co-create products. Glossier uses Shopify to streamline its online shopping experience and has opened stores in key U.S. locations, often near luxury brands like Gucci, while maintaining accessible prices. Staff are equipped with tablets, and fitting rooms allow customers to take photos to share on social media. The in-store atmosphere is relaxed, giving customers time to browse. Through ongoing engagement with its community, Glossier aims to lead the beauty segment with a curated, focused product range. On social media, Glossier has over 3 billion views on TikTok, though its international expansion remains limited for now.

Intergenerational Adaptation

Brands are now targeting communication strategies toward all generations:

• Gen Z: Values ethics and is digitally focused.
• Millennials: Prioritize brand values.
• Gen X: Loyal to brands.
• Boomers: Prefer in-store shopping.

Challenges and Success Strategies for New Brands

• Barriers to Entry: Although brand creation is easier, achieving success remains challenging.
• Disruptive Strategies: These include unique products, strong brand recognition, and diversified distribution.
• Example of Skims: Founded by Kim Kardashian, Skims moved from a DTC model to opening physical stores. Its strong social media community helps drive store traffic, and products are released in limited quantities to enhance perceived value, especially as imitations emerge. This sustainable growth model starts in DTC and then extends to physical locations.

Three Key Trends Emerging:

1. Brand Transformation: Physical stores remain integral.
2. Generational Strategy: U.S. brands are drawing inspiration from Chinese market leaders.
3. New Loyalty Paradigms: Customer loyalty is increasingly driven by data insights.

Generating New Business Models: Key Strategies for Creating Revenue Streams

1. Proprietary Marketplaces: Retailers develop their own sales platforms to maintain direct control over transactions.
2. Monetizing Customer Experience: Through retail media, retailers integrate advertising within the shopping journey.
3. Customer Data Monetization: Using customer insights to create personalized offers and experiences.
4. Co-opetition: Collaborating with other brands to pool resources and reach broader audiences.
5. Commercializing Loyalty Programs: Selling or sharing loyalty benefits with strategic partners.
6. Supply Chain Monetization: Leveraging technological and logistical assets to generate value for other players.

High-Profit Potential Models

• Proprietary Marketplaces: These can increase average basket size by 15%.
• Experience Monetization: Expected to drive a 17% annual sales increase over the next three years.

Opportunities in Retail Media

• Targeting Data: Allows teams to reach customers both online and in-store.
• Incremental Sales: Generates additional revenue by integrating ads into the shopping journey.
• Improved Attribution: Enhanced measurement of campaign impact enables better-targeted advertising strategies.

Challenges in Retail Media

• Disconnection Between Retail Media and Merchandising Teams: Lack of coordination limits campaign effectiveness.
• Lack of Reliable Metrics: Difficult to prioritize advertising spend without solid performance indicators.
• Fragmentation of Retail Media Networks: Increases complexity, making unified campaign management more challenging.

A Colossal Expanding Market

Retail media is projected to reach $68 billion by 2025, even surpassing non-cable television advertising budgets.

In-Store Retail Media

Although physical stores account for 77% of total retail revenue, in-store retail media currently represents only 0.8% of ad spend. Investments in in-store retail media technology focus on:

• Digital Signage: Provides guidance and displays advertisements within stores.
• Smart Labeling: Enhances customer interaction with shelf-level information.
• Smart Carts: Shopping carts equipped to display ads.
• Digital Shelves: Real-time promotions and product information displayed directly on shelves.

Unified Commerce

Unified commerce goes beyond omnichannel by integrating all physical and digital touchpoints into a seamless, cohesive experience. It’s more than just a buzzword—it marks a true evolution in how brands engage with customers.

Examples of Unified Commerce Initiatives

• Target: Implemented in-store digital assistants for staff, allowing sales associates to easily access product information (e.g., instructions, features). This technology enhances customer service and in-store efficiency.
• J.Crew: Launched a connected catalog accessible through a dedicated app, allowing customers to browse and boosting customer retention by 20% while enhancing the overall experience. J.Crew is also creating immersive environments with the Apple Vision Pro augmented reality headset, focusing on innovation rather than immediate ROI.
• Home Depot: Introduced "Store Mode" in their app, which provides in-store navigation to help customers locate products quickly. This feature strengthens the connection between online and in-store experiences.
• Falabella: Initially adopted a single-site strategy but later segmented its sites to better meet various customer needs. This approach improved customer engagement and the Net Promoter Score (NPS). They also fine-tuned personalization by limiting custom elements on the homepage and category pages, avoiding over-personalization early in the customer journey.

Store Tour

• Nike: For the Chicago Marathon, Nike stands out as the event’s signature brand. The entire city is decorated in marathon colors, evoking an atmosphere similar to the Olympic fervor in Paris. In Chicago, everything revolves around running. The Nike store is specially outfitted in marathon colors, with a shopping path inspired by Ikea’s layout, guiding customers through a specific route. A queue forms at the entrance, highlighting the brand's strong appeal.
• Glossier: The store offers a unique experience with fitting rooms designed to enrich the customer experience, creating an engaging and interactive space.
• Target: At the end of each aisle, a kiosk allows customers to check product availability in other stores or online, providing convenient access to the full inventory across locations.

Standout Technologies

• Amazon Shipping: Amazon expands beyond the cloud by now offering its robust logistics infrastructure to other businesses, directly competing with DHL and FedEx. This extensive logistics network is a major asset for providing high-quality delivery services.
• Walmart Commerce Technologies: Walmart introduces "Store Assist," a tech solution available to other retailers to optimize in-store operations and enhance customer experience.
• LogRocket: An advanced analytics solution featuring "session replay," which records and analyzes user sessions. This technology detects and sends alerts for errors in customer journeys, allowing early detection and continuous improvement of the user experience.
• Omi: A French startup specializing in visual content creation, offering an AI-driven 3D photo studio that generates high-quality 3D product renderings.

Many thanks to Ulysse Meersseman for the sponsorship, to Laetitia Lamari, Michel Koch, and Adrien Naeem for their high-quality content, and to Antoine Routaboul for the warm welcome!

To stay informed about upcoming feedback events led by Laetitia, Michel, and Adrien, or to organize an event within your company, visit www.back-from.com .