Retail Transformation Briefing: 22nd May 2024

AI continues to be everywhere right now, and liberal use of the term across all sorts of solutions can make it difficult to actually work out what it is you're looking at.

B2B marketing and sales teams were quick to jump on AI, and in particular GenAI, sometimes as a genuine customer proposition, or sometimes, as it seems, as a way to simply to ride the hype wave. And from speaking with a number of retailers, this can be both frustrating and confusing.

Interestingly, we're now increasingly seeing retailers and brands using "AI" as a term in more customer facing instances. Will we just overuse and oversaturate the term, leading to confused customers? Is it unintentionally setting excessively high expectations, with the promise of "advanced technology" surpassing what's possible? Do customers even care if your using AI?

Of course, the answers to these questions come with knowing your customers and what will work effectively for them. However, it's also about staying grounded and not getting carried away with whatever clever and cool solutions are being applied, but instead remaining clear and focused on the particular challenges and opportunities. And it remains crucial to ask: is "AI" really the best solution for this or is there a superior alternative?

It's the same for any transformation too, customer facing or not. The customer of the change is more interested in the destination than the journey to get there. Ultimately, whether we're talking about the customer of a change or the end consumer, what "the customer" cares about most is the outcome and what's in it for them.

Retail transformation news headlines

?? 马莎百货 announced a significant growth in profitability as a result of their ongoing transformation programme. The transformation has been a broad modernisation of the business, including a revamp of both their clothing and their food offering. I recently cited M&S as an excellent example of a big business transformation and this latest financial update is a testament to the positive shifts and improvements that the 140 year old retailer has driven.

?? 沃尔玛 have dramatically improved their delivery timescales using stores as the enabler. Whilst the quick commerce boom has declined, Walmart announced some of their major developments, including delivering 4.4 billion items for same-day or next-day delivery, including nearly a billion items delivered in just 3 hours. They have also made improvements in India and China. Their extensive physical store network is an important part of their approach and offers a strategic differentiator against Amazon and other competitors.

?? In the US, 百思买 is upgrading its app, including loyalty features and more video content. Additionally, customers will be able to access special promotions and opportunities to discover the full range in a section called "Yes, Best Buy Sells That". Many retailers are looking to develop their app to make it more convenient to shop and maximise the chances of repeat purchases and increased baskets. .

? LEGOLAND theme park in Windsor, UK, has opened a checkout-free store. It's the first of its kind in a European theme park and allows customers to quickly grab and go, avoiding the typical theme park queues. Powered by Zippin and Aramark UK , the solution has been deployed to the 'Duplo Coffee Co' shop, allowing customers to grab hot and cold drinks, cakes and other snacks. The technology has not been deployed to all cafes, neither is it available in their primary merchandising store on site, however, it feels like this would be a logical next step to extend the experiment.

? 特易购公司 and 百事 are working together and have organised a full store wrap and takeover in preparation for the UEFA Champions League final. The store is in Wembley, nearby to the stadium which hosts this year's final, and will feature an "immersive experience" for customers, including activities, special promotions and competitions. This is an interesting evolution of their retail media network division and reminds me of the excellent partnership between Harrods and Burberry , earlier on this year. Meanwhile Tesco also forecast that retail media will be bigger than TV by 2025 which is significantly faster than Emarketer's previous forecasts of a 2027 switchover point (from Dec 2023).

?? Reebok launched an AI sneaker design tool on Instagram, using a customer's photo collection as the inspiration. You can upload a photo from your phone and have AI create a design using the colours and textures from the original photo, which you can then tailor to adjust the styling. The original photo also features on the sole of the shoe. This is a new level of product personalisation that helps a customer create a one-of-a-kind product. Whether or not this is valid and useful use of "AI" as a term, it's a clever tool to use at scale, coupled with enabling one-off production.

?? Warner Bros. Entertainment have released a luxury experience shop and online store, inspired by the billionaire Bruce Wayne, the man behind Batman's mask. Featuring a number of ultra premium products, including fashion, watches, artwork as well as cars with price tags up to €4.9m. Whilst that price tag doesn't buy you a Batmobile, you can apply to have the opportunity to purchase one of the very limited edition "Tumbler" Batmobiles as featured in more recent iterations of the franchise. This is clearly a very niche business offering given the ultra-luxury positioning, but the overall concept is very interesting and could easily be applied to a number of other franchise film characters - from superheroes and action stars through to period dramas and cartoon characters.

New podcast episode: Shift customer experiences into memories- #295

If we focus only on creating a great customer experience in the moment, we’re missing the opportunity for positive impact. This episode explores how to craft unforgettable customer interactions that forge long-term loyalty. Join me and discover why we must consider designing memories and how neuroscience reveals the opportunities to etch the brand into a customer’s brain. The aim is to create positive, lasting impressions and avoid negative memories so that customers remember the brand fondly and choose to keep coming back for an excellent experience.

Listen to episode 295 of the Retail Transformation Show and discover:

• How the brain creates memories and how we can use this to our advantage.
• Discussion prompts to design retail interactions that turn routine outings into standout memories.
• How emotional connections can amplify the likelihood of forming customer memories.
• How to reverse the approach to avoid creating bad memories.

Plus, check out these recent episodes:

#294: The inevitable transformation challenges

#293: Becoming A Human Centric Company

#292: Leaping the transformation gap

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Keep transforming better,

-- Oliver

?? I help retailers build effective operating models and drive transformation - with hands-on consulting services or advisory support.

?? I speak about the evolving retail industry and delivering transformation and also host the Retail Transformation Show podcast.

?? My chart-topping book, Driving Retail Transformation: How to Navigate Disruption and Change, is out now.