Over the past 4 days the RetailOasis team have been in Vegas attending the Shoptalk 2017 conference (we’ve also seen the inside of more casino’s and buffets than we care to mention, but that’s for another blog post).
What is Shoptalk? Although still relatively new, Shoptalk is quickly becoming one of the biggest retail conferences in North America. In our opinion what makes Shoptalk so interesting compared to other conferences is that it has an good mix of brands across the retail industry and eco-system, from the biggest players to a range of up-and-coming startups.
So what did we find interesting? Although we saw a lot of presentations from established retailers and startups, new product demos/tech and spoke to a lot of industry experts in the past 4 days; we can’t and won’t attempt to cover it all here. Rather, over the next couple of days we’ll do a series of blogs highlighting our key takeaways from the conference and what we think is the most relevant insights for Australian retailers.
So here’s our first three takeaways (in no particular order):
Uber isn’t just disrupting the automotive/taxi industry, it’s affecting all of retail.
Two retailers we heard mention repeatably over the past 4 days were both Uber and Amazon. We’ll talk about Amazon in part 2 of our recap, but firstly lets talk about Uber. We all know Uber (and other rideshare providers such as Lyft) have had a significant impact on the taxi industry. Additionally, it has been evident for some time that trends are pointing towards a decline in auto ownership in favour of auto “usership” (using a car, just not owning one). However new data coming through is suggesting that Uber is also affecting the broader retail environment.
Firstly, let’s look at some industry stats:
- Ride sharing has experienced explosive growth over the past few years, growing 50% in the past year alone (source: Slice Intelligence).
- The share of 16-24’s with a a drivers license has dropped from 76% to 71% from 2000 to 2013 (source: Mckinsey). We’ll talk more about in part 2, but from a panel of Gen Z’s we attended, it totally blew us away that of those interviewed all would rather receive a new phone than a first car!
- By 2030, 10% of auto sales will be for ride-sharing purposes (source: Slice Intelligence)
Evidence is now starting to emerge that heavy rideshare users (those users defined as those whom used ridesharing at least 3 days a week for at least 40 weeks in 2016) are spending significantly more online than the average consumer, especially across food related categories. Think about it for a second… you’re a young 20 something who has to do the weekly grocery shop. Only one problem, you don’t own a car. Grocery shopping is a pain in itself with a car, but imagine if you don’t own a motor vehicle you still need to book an Uber to get there and another one back. Therefore we are seeing sustained growth in e-commerce as consumers choose to shop from home (especially online groceries).
As a result, we expect to see a shift in dollar spend from auto-related categories (petrol, motorvehicles and insurance) to other consumer goods and services. Furthermore, ridesharing companies are currently sitting on powerful ad targeting databases and we expect to see multiple partnership opportunities between ridesharing companies and retailers/manufacturers.
Anything related to virtual, augmented and mixed reality
Like any conference, Shoptalk comes with it’s share of retail buzzwords. One example of buzzwords we heard repeatably was anything relating to virtual reality (VR), augmented reality (AR) and the latest which is mixed reality (MR). Firstly, for those who don’t know we’ll try to define the three terms:
- Virtual reality – it transports and immerses you into a whole new world.
- Augmented reality – overlays data on top of your current view of the world (think Pokemon Go).
- Mixed reality – still a relatively new term, but think of it as a hybrid between the two.
Although we’ve tried VR/AR/MR in the past; there was a range of new tech at Shoptalk which we were fortunate enough to try and have demo for us. Whilst still a relatively new technology (and like any new technology, has it’s kinks to iron out), it definitely has future potential for retailers. Whilst there are some brands in the industry that appear to be using VR/AR simply as a way to jump on the latest tech to prevent FOMO, there was some really good examples we saw of retailers using the tech to solve genuine consumer needs. Here’s some examples of what we saw and liked:
- BMW using AR in car showrooms so customers can visualise and customise cars in augmented reality. A great example of how it can allow retailers to do more with physical space restrictions (i.e. BMW don’t need to have the physical car in the showroom).
- Customers at Gap are 3x more likely to buy if they go into a dressing room in store. Gap are now experimenting so you can have a virtual reality dressing room at your home.
- Pure plays such as Wayfair, Williams Sonoma and Amazon have traditionally found it difficult to sell large items online. Would you buy a TV online without seeing it first in store to get an idea of the look and feel? Therefore they have created tools so you can visualise products in “real-time” within your home.
- Alibaba creating a virtual reality store for Chinese customers.
However there was one company that really stood out in the space and continues to impress us – Lowes (one of America’s largest hardware chains).
Lowe’s see VR and AR simply as a method of storytelling to customers; and have built some truly impressive tech innovations over the past few years.
However their latest innovation really impressed us and has the potential to disrupt the DIY market as we know it. Most DIYer’s get their info from Youtube, but imagine if you could walk step-by-step through a virtual reality DIY project? Although what we trialled was a prototype and not released to the general public, it allows customers to attempt full DIY projects through virtual reality. You simply put the headset on and learn step-by-step of any project. We undertook a project to tile a bathroom – right through from prepping the tools (e.g. filling a bucket of water and mixing cement), through placing the tiles and even applying grout. This has huge potential either in consumer’s homes or in-store.
Although from my facial expression I may not look it, but it is perhaps one of the most innovative and exciting uses of VR we’ve seen to-date. Unfortunately VR is a very personal experience and the photos don’t do it justice, but click on the video below to see a demo of what it actually looks like once you put the headset on.
Other VR / AR we tried from startups which we thought was worth a mention was virtual mannequins through HoloLens technology and a store inventory planning tool that allows you to walk a virtual store and plan store layout / inventory in real time.
“Heal” is a startup you should keep your eye on.
We’ve seen a range of startups over the past 4 days, but one startup which we particularly liked was “Heal”. Heal is termed as the “Uber” for doctors. For $99 it provides a on-demand doctor in 15 minutes, that is you can have a doctor drive to your house. Checkout more at the website here https://heal.com/
You can read part 2 of our recap here where we talk the juggernaut that is Amazon, why the next innovation in retail will be at the checkout and Trump!