You can read part 1 of our recap from Shoptalk here. Continuing on from our previous blog post, we’ll detail out 3 more trends that came up during the conference which we thought were of particular interest to retailers here in Australia:

 

2 day online delivery is the new norm in the US (or why Australian retailers should be very worried about the arrival of Amazon).

We talked about Uber in part 1, but throughout the conference there was another name that came up repeatably… Amazon. It really hit home to us how big of a force Amazon has now become in the states. The general consensus across all retailers we spoke to was that if Amazon hasn’t yet disrupted your category, then they soon would be.

Over the 4 days we got a chance to listen and speak with both the heads of Amazon Prime and Amazon marketplace. Firstly let’s talk about Amazon Prime. One thing that surprised us over the conference was the significant focus of all retailers on online delivery and logistics. Amazon Prime has really changed the online delivery landscape over here in the states. Both Stephenie Landry (head of Amazon Prime) and Peter Faricy (head of Amazon Marketplace) put it best when they said that 2 day online delivery is now the new norm that American consumers expect. They also envision a time in the not-to-distant future where consumers expect delivery within a day or even hours. We also got to see some demos from Amazon and Fedex (and even a few startups) around parcel lockers for online delivery which had a lot of potential.

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There’s currently over 1,800 Amazon lockers in the US alone (including on the Las Vegas strip, pictured here)

What also interested us was that whilst many retailers were focusing on getting logistics right for online delivery, many were putting equal focus on their product packaging (including Amazon Prime) – seeing packaging as just as important as the delivery process itself and an opportunity to “surprise and delight” customers.

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It wasn’t just logistics that retailers were focusing on, but product packaging was a huge theme at Shoptalk. Pictured: An example of innovations in packaging design.

We also got to see a lot of other innovations from Amazon – including Amazon Fresh, a paid subscription model where members can order groceries online and have delivered to their door (currently available in certain US cities and recently launched in London). By 2020, Amazon Fresh is predicted to be the third biggest grocery provider in the US. Also what interested us was Amazon’s newest venture “Amazon Flex”, which has the potential to shake up both the courier and ridesharing industries. Similar to Uber, Amazon pays contracters a fee to use their own vehicles for on-demand Amazon parcel deliveries (unfortunately there was still no talk of drone deliveries).

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Amazon Flex gives drivers the chance to earn $18-25 per hour and offers serious competition to the likes of both Uber and courier services in the US.

Amazon have really dominated the American retail landscape in a few short years and if Australian retailers aren’t worried about the arrival of Amazon onto Australia shores, they should be.

 

Innovation at the checkout

Perhaps Stephanie Landry said it best  – people will always love the emotion of shopping, however it’s the boring mundane tasks that will be automated. With that said, much was talked about within both the mobile wallet and AI assisted ordering space.

Firstly lets talk about the concept of the “mobile wallet”. We can really see the benefits of this, particularly with online ordering (no longer will you have to fill out multiple order forms when online shopping, but rather just click a button). We saw many offerings from the big players (e.g. American Express) and a number of startups, although perhaps Apple were the most impressive in the space with a simple and easy to use process. In the race for who can get biggest market share first, Apple appear to be in the lead.

Now lets talk AI assisted computing; and in particular it’s benefits to retail. While we won’t get too complicated with the nuts and bolts of how it works, essentially it is the move from “you adapting to the computer” to “the computer adapting to you”.

We saw many examples – but there were two that really impressed us – from both eBay and Google.

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We got a hands on demo with eBay “Shopbot”. Using a mobile device, Shopbot allows customers to take a photo of any product and send a text to purchase via the eBay platform.

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Jonathan Alferness, VP of Product Management for shopping and travel at Google with a demo of Google Home. Using voice activated commands, talk to “Google Home” about what you need and it’ll purchase it for you.

One thing became clear – whether it’s through computing or the checkout process, our children’s experience with computers will be very different to that of our own…

 

What were retailer’s thoughts on the Trump administration and it’s potential affect on the retail industry?

Throughout the four days there was one white elephant in the room – Trump; and in particular his impact on the future outlook of the industry. We were quite keen to hear what the general mood towards Trump was in the retail space, although many understandably avoided taking sides in the debate. However many speakers agreed that the success of Trump took them by surprise, which was actually an important lesson (similarly with Brexit in the UK) in how businesses and the mainstream media was out of touch with the general mood of the American public.

Interestingly though, some industry leaders mentioned that whilst they traditionally avoided talking politics they felt so strongly on current issues that they felt forced to now become quite vocal. Firstly many talked concerns around policies on immigration reform and it’s affect on attracting top talent, which has the affect of potentially making American companies less competitive globally. Secondly a proposed border tax which has the ability to increase the price of goods for American consumers up to 20%.

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CEO of eBay Devin Wenig was quite vocal on Trumps immigration reforms. “It will have a signifiant impact on Silicon Valleys ability to hire top talent globally”.

It was pretty evident that whether you agreed or disagree with Trump’s policies, these were significant issues that could potentially affect the retail industry and needed to be addressed.

 

You can read our third and final part of shoptalk here; where we talk the move towards experiential retail, insights into the millennial / Gen Z consumer and more.