shoptalk 2017 day 2 takeaways - deborah weinswig...mar 21, 2017  · shoptalk 2017 day 2 takeaways:...

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March21,2017

DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

Deborah Weinswig Managing Director,

Fung Global Retail & Technology

deborahweinswig@fung1937.com

US: 917.655.6790

HK: 852.6119.1779

CN: 86.186.1420.3016

Shoptalk 2017 Day 2 Takeaways:

TheFungGlobalRetail&TechnologyteamisattendingShoptalk2017inLasVegasthisweek(March19–22).Describedbytheorganizeras“thenext-generationcommerceevent,”Shoptalkexpectsmorethan5,000attendeesfromover40countriesatthisyear’sevent.

1) E-commercecompaniessuchasAmazonandeBaysharedtheireffortstoimprovefulfillmentspeed.StephenieLandry,VicePresidentofAmazonPrimeNow,pointedoutthatinstantfulfilmentsuchastwo-hourdeliverycouldbecomethenormforfuturee-commerce.

2) Retailersarerethinkingtechnologiestohelprunstoresmoreefficientlyandengagecustomers.KyleNel,FounderandExecutiveDirectorofLowe’sInnovationLabs,discussedhowLowe’siscreatingamoreefficientandengagingshoppingexperiencebyintroducingautonomousrobotsat11ofitsretailstores.

3) MarcLore,PresidentandCEOofWalmarteCommerceUS(Walmart’se-commerceoperations),announcedonMondaythatthecompanyislaunchingatechnology-startupincubatorinSiliconValleytohelpidentifychangesthatwillreshapetheretailexperience.Theincubator,dubbedStoreNo.8,willhousestartupswhollyownedbyWalmart,butrunindependently.

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March21,2017

DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

Source:FungGlobalRetail&Technology

Thisweek,theFungGlobalRetail&TechnologyteamisattendingShoptalk2017inLasVegasduringMarch19–22.Describedbytheorganizeras“thenext-generationcommerceevent,”Shoptalkexpectsmorethan5,000attendeesfromover40countriesatthisyear’sevent.Fromnewtechnologiesandbusinessmodelstochangesinconsumerpreferencesandexpectations,attendeesareexploringdisruptionintheretailindustry,particularlyitsimpactonhowconsumersdiscover,shopandbuy.

Below,wesummarizeourkeytakeawaysfromDay2ofShoptalk.

Day2Takeaways

1. E-CommercePurePlaysareTestingtheLimitsofInstantFulfillmentE-commercecompaniessuchasAmazonandeBaysharedtheireffortstoimprovefulfillmentspeed.

AmazonPrimeNow:StephenieLandry,VicePresidentofAmazonPrimeNow,pointedoutthatinstantfulfilmentsuchastwo-hourdeliverycouldbecomethenormforfuturee-commerce.Two-dayshippingwasconsideredunnecessaryjustafewyearsago,buthasbecomemore-or-lessexpectedbytheconsumer.SinceDecember2014,AmazonPrimehasbeenprovidingfreetwo-hourshippingandcharging$7.99forone-hourdeliverytomembers.Currentlyofferedin45citiesinsixcountries,therapidexpansionofthisservicedemonstratesthestrongdemandforinstantfulfilment.

eBay:PresidentandCEO,DevinWenig,announcedthatthecompanywillrolloutguaranteedthree-daydeliveryonmorethan20millionitems.Shopperswillalsobeabletofilteritemsbyone-ortwo-daydelivery.

2. Brick-and-MortarStoresStillPresentaGrowthOpportunity,butRequireaMajorTransformation

Althoughsalesfrombrick-and-mortarstorescontinuetogrow,performancediffersvastlyamongindividualretailers.

DeloitteConsulting:KaseyLobaugh,ChiefRetailInnovationOfficer,sharedastudy,whichindicatedthatstore-basedretailersthatofferhighlydifferentiatedproductsandperformancerecordedafive-yearcompoundedannualgrowthrate(CAGR)of10.1%inannualrevenueover2010–2015.Howeverthoseretailersthatsellcommodity-likeproductsreportedanaveragedeclineof0.2%overthesameperiod.Lobaughsharedthataccesstoproductsandeasyreturnsaretwoadvantagesofin-storeshoppingversustheonlinechannel.Retailersneedtocontinuetoimproveinthetwoareas.

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March21,2017

DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

Source:FungGlobalRetail&Technology

Target:Asstore-basedsalesstillaccountforthemajorityofretailers’sales,investinginstorestocreateaconvenient,excitingandall-channelexperienceiscriticaltoremaincompetitiveinthecurrentretailenvironment.ChairmanandCEO,BrianCornell,sharedthecompany’smulti-billiondollarinvestmentinitiativesforitsstoresoverthenextfewyears,includingremodeling600stores,openingsmall-formatstoresandimprovingin-storefulfilmentcapability.Storeremodelingincludedredesigningin-storedisplays,storeentrancesandin-storetechnologies.

3. CreatingaFrictionlessStoreExperience:AutomationandSelf-CheckoutRetailersarerethinkingtechnologiestohelprunstoresmoreefficientlyandengagecustomers.

Lowe’s:KyleNel,FounderandExecutiveDirectorofLowe’sInnovationLabs,discussedhowLowe’siscreatingamoreefficientandengagingshoppingexperience.Lowe’sisintroducingautonomousrobotsat11ofitsstores,hopingtocreatemoreseamlessinteractionsforcustomers.TheLoweBot,madebyFellowRobots,usesa3Dscannertodetectpeopleastheyenterthestores.Shopperscansearchforitemsbyaskingthebotortypingitemsintoatouchscreen.Thebotcanguidethemtothoseitemsusingsmartlasersensors.Lowe’shopesthebotwillalsosavecustomerstime,aspeopleenteringthestoreoftenwanttoknowwheresomethingisanddon’thavetimetodownloadanapp.

Source:FungGlobalRetail&Technology

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March21,2017

DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

RebeccaMinkoff:Co-FounderandCEO,UriMinkoff,discussedthecompany’spartnershipwithself-checkoutstartup,QueueHop,toprovideself-checkouttechnologyinitsstoreswiththeaimofeasingtheshoppingexperience.UnlikeAmazonGo,thereisstillacheckouttocontendwith,butonethatshopperscancompleteontheirown.Themillennialfashionbrandishopingtoshaveofftimebycreatingamoreseamlessshoppingexperience,whichcouldspurconsumerstogointotheirstoresmoreoften.

4. ChinaandIndiaRepresenttheBiggestInternationalOpportunitiesforE-Commerce

ChinaandIndiaareshowingthemostattractivegrowthpotentialfore-commerce.

China:Drivenbyhighmobileadoption,cheaplogisticsandaninefficientstore-basedretaillandscape,Chinahasbecometheworld’slargeste-commercemarket.By2020,thenumberofe-commerceconsumersisforecasttooutgrowthatoftheUSbythreefold.By2019,29%oftheworld’sonlineshopperswillbeChinese,accordingtoeMarketer.LeeMcCabe,VicePresidentNorthAmericaatAlibabaGroup,encouragedeverye-commerceplayertothinkaboutsellingintoChinaatscale,especiallythroughe-commercemarketplaces,whicharethedominantonlineshoppingdestinationforChineseconsumers.

Source:FungGlobalRetail&Technology

India:Indiaalsopresentsatremendousopportunityine-commerce.By2019,11.6%oftheworld’sonlineshopperswillbeIndians,whichputsthecountrysecondonthelistafterChina,accordingtoeMarketer.DevinWenig,PresidentandCEOofeBay,considersIndiaagreatopportunityforeBay,giventhegrowingwealth,supplyanddemandimbalanceine-commerceandhighmobileadoptioninthecountry.

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March21,2017

DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

5. DataAnalyticsEmpowersConsumerstoInfluenceProductCurationRetailershaveusedvariousdataanalyticstoolstolistentoconsumerfeedbackandappliedtheinsightsgainedtodirecttheirproductdevelopment.Infact,dataplaysanevermorecentralroleinretail.ThiswasemphasizedinpresentationsfrombotheBayandAlibaba,whichdefinethemselvesasdatacompaniesratherthananythingelse.

Source:FungGlobalRetail&Technology

Dataanalyticsisenablingretailersacrosscategoriestoprovideproductsthatcustomerswant.

• ParisPresentsIncorporated,aglobalbeautyandpersonalcarecompany,developeditsaward-winning,realtechniquemakeupbrushsetsafteranalyzingcustomerreviewsandcommentsthattheywantedtohavehigh-qualitymakeupbrushsetsatmass-marketprices.

• NatureBox,anall-naturalsnacksubscriptioncompanycollectscustomerfeedbackfornewproductsforaperiodof12weeksandmakesadecisionwhetherornottocontinuemakingtheproductsbasedonthereviews.

• LeTote,afashionrentalsubscriptioncompany,usesanextensiveratingsystemtodecidewhattoincludeineachsubscriptionboxeachmonth.

6. MobileContactlessPaymentsontheRise,BringingBenefitstoRetailersOverthepasttwoyears,mobilewalletshavefloodedthemarketwithofferingssuchasSamsungPay,ChasePay,AndroidPay,ApplePay,AmazonPay,andmore.Eachoftheseoffersuniquebenefitstotheuserandencouragescustomerstoformshoppinghabitsaroundthem.Benefitstotheretailersandmerchantsinclude:reducescheckoutfrictionwithexpeditedpayment,incorporatesexistingloyaltycreditcardofabrandorretailerintoApplePay,providesasingleloginforregistrationandtransactions,lowerscartabandonmentandincreasesconversion.

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March21,2017

DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

ApplePay:BarisCetinok,SeniorDirectorofProductMarketing&ManagementforApplePay&iCloud,discussedtherapidgrowthofApplePayadoptionintheUS.Overtheholidayseasonin2016,transactionsthroughApplePayforbothe-commerceandphysicalretailstoreshada10%–15%higheraverageordervalueanda2xhighercheckoutconversionrate.Lastquarter,ApplePaywitnessed500%paymentvolumegrowthcomparedtothepreviousquarter,accordingtoCetinok.Thebenefitsfeltbythemerchantshaveledtogreateracceptance.ThenumberoflocationsacceptingApplePaywillgrowfrom220,000in2014to5millionby2017.

AmazonPay:Theworld’sleadingcloude-commerceplatformforbusinesses,BigCommerce,announcedatShoptalkthatAmazonPaywouldnowbeavailableonitsplatform,providing50,000+businessestheabilitytoofferastreamlinedcheckoutexperiencetoAmazoncustomersworldwide.

7. RetailersandBrandsPartneringwiththeTechCommunity;WalmartAnnouncesStartupIncubator

Walmart:MarcLore,PresidentandCEOofWalmarteCommerceUS(Walmart’se-commerceoperations)announcedonMondaythatitislaunchingatechnology-startupincubatorinSiliconValleytohelpidentifychangesthatwillreshapetheretailexperience.Theincubator,dubbedStoreNo.8,willhousestartupswhollyownedbyWalmart,butrunindependently.“There’snotafocusjustontoday,theycanactuallythinkbigger,”LoresaidattheShoptalkconference.TheaimofStoreNo.8willbetoincubate,investinandworkwithotherstartups,venturecapitalistsandacademicstodevelopWalmart’sownproprietaryrobotics,virtualandaugmentedreality,machinelearningandartificialintelligencetechnology.

RebeccaMinkoff:Co-FounderandCEO,UriMinkoff,discussedthatinordertobecompetitive,aligningwithpartnersiskey.InJanuary,thecompanyannounceditsfashionventurecapitalfundinpartnershipwithQuotidianVentures,aVCfirmbasedinNewYork.

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March21,2017

DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

DeborahWeinswig,CPAManagingDirectorFungGlobalRetail&TechnologyNewYork:917.655.6790HongKong:852.6119.1779China:86.186.1420.3016deborahweinswig@fung1937.comJingWangResearchAssociate

StevenWinnickResearchAssociate

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