After attending Shoptalk Europe in Barcelona in early May, I came away realising that after all the upsets of the last few years, retail has got its bounce back. Over the course of the event, three key topics stood out as the retail industry looks ahead to the second half of 2023 and beyond: sustainability, generative AI, and data-driven shopper experiences.
Sustainability. Sustainability remains a top priority, and companies like Adidas and Zalando emphasised the importance of transparency and authenticity in sustainability initiatives. Shai Eisenman, founder of Bubble Skincare, readily acknowledged that the beauty sector in particular is notorious for greenwashing, and she pointed to product refills as an example. Everyone knows refills are an environmentally conscious practice, but Eisenman pointed out that it needs to happen 28 times to have any positive environmental impact. The lesson here, she added, is that a lot more needs to be done to develop sustainable packaging.
One example of a brand “walking the talk” is sports retailer Decathlon, which is offering long-term bike rentals rather than just bikes for sale. Decathlon is also leveraging AI to personalise recommendations based on consumer interests. Which leads us to…
Generative AI. AI is in the media every day now, but I wanted to see how retailers plan to put it to use, particularly after hearing at the show that H&M is transforming into an AI-driven data company. The buzzwords around this topic were fun, relevance, personalisation, and excitement in the shopping journey, using large language models (LLMs) to create better customer experiences.
Retailers anticipate that generative AI will enhance product discovery and recommendations, and Zalando co-founder Robert Gentz went so far as to say that he expects it to help the fashion sector take a greater share of the European ecommerce market over time, from 20 to 40 percent. Meanwhile Giorgio Busnelli, Director of Consumer Goods Europe at Amazon, acknowledged the potential of AI in improving the grocery shopping experience, emphasising the company's previous use of machine learning.
Customer data. The latest tech and business initiatives only work if there is data to drive them, and several retailers underscored this point in a session called “Using Customer Data to Surprise and Delight.” Alex Williams from M&S shared that brand’s Bullseye in-house personalisation strategy, which captures data on transactions and customer behaviour to personalise more than 6 billion digital customer interactions a year. Williams noted this approach has led to a 5 percent higher click-through rate and has driven as much as 20 percent higher open rates.
At the end, I came full circle to authenticity after so many retailers pointed out that tech should not be driving the agenda but rather should be enabling it. As Alan Boehme, CTO of H&M, explained when talking about AI and data, it’s best to let data tell its story rather than forcing it to fit a predetermined narrative. “Don't try,” he said, “as we have done so far, to make the data justify the story you want to tell.”
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