Introduction

Coresight Research is a research partner of Shoptalk 2023, which took place March 26–29 in Las Vegas, Nevada, US. Shoptalk is an annual retail conference focusing on the trends, business models, and technologies shaping the future of retail.

We present our top insights from Shoptalk 2023, centered around five key themes, as identified by Shoptalk: technology, store experience, shopper engagement, emerging channels and organizational changes.

Shoptalk 2023 Wrap-Up: Coresight Research Insights

1. Technology

Web3 Can Enhance Supply Chains and the Consumer Experience

Retailers currently face numerous challenges and limitations in managing their supply chains. Web3 (sometimes styled Web 3 or Web 3.0) technology can help retailers address these challenges by boosting traceability, transparency and automation.

During the “Web3 and the Supply Chain: Blockchain, Digital Twins and More” session, Deborah Weinswig, CEO and Founder of Coresight Research, introduced a framework for driving Web3 supply chains, allowing retailers to add end-to-end visibility, automation and cost savings through smart contracts and decentralized ledgers.

As Weinswig explained, there are many benefits to using intelligent, connected supply chains, including:

• Better demand forecasting
• Faster product design and manufacturing
• Greater traceability, compliance and circularity
• Enhanced labor efficiencies and cost savings
• Increased last-mile speed

She also discussed the current obstacles holding retailers back from utilizing Web3 in their supply chains, spanning public versus private blockchains, farmers and factories not being comfortable with the technology (many are still using fax machines), and fears around too much transparency in the current geopolitical environment. Also, the innovator landscape remains in its infancy, but Weinswig did outline companies that are currently able to help connect the framework she outlined.

Coresight Research believes that we will see early adopters in the luxury sector, where provenance is critical. Provenance is the history of ownership of an item that starts from inception and ultimately helps with authentication which is critical in luxury resale.

• For more on Weinswig’s session, see the Web3 and the Supply Chain: Blockchain, Digital Twins and More event presentation.

Weinswig discusses how Web3 can create optimal supply chains
Source: Coresight Research

 

On the consumer side, Web3 technology can provide a meaningful way for brands and retailers to connect with consumers and enhance their experiences, as discussed in the “Web3 in Retail: Virtual Goods and Immersive Consumer Experiences” session. Michael Relich, Co-CEO of American apparel retailer PacSun, urged retailers to think about the metaverse not as an online, 3D mall but as a means to engage with younger consumers, especially Gen Zers. Like many retailers, PacSun has partnered with popular pre-Web3 platform Roblox to engage with consumers in the metaverse.

AI Is Top of Mind

The growing use of artificial intelligence (AI) across retail functions was discussed in many sessions at Shoptalk 2023—specifically, the use and value of generative AI technologies, including ChatGPT and similar platforms. In general, brands and retailers understand that AI drives business benefits, but they may need direction regarding how best to utilize the technology.

Bill Ready, CEO of social media platform Pinterest, explained that AI needs high-quality signals and inputs to work correctly. This typically requires a large data set, which Pinterest has. The platform’s 450 million users are constantly making associations between products on their “boards,” meaning that its AI is fed “powerful and accurate” signals, increasing its effectiveness, Ready explained.

Similarly, Sean Downey, President of Americas and Global Partners at Google, noted that it is important to have solid AI principles and ways to hold AI accountable, given its power and potential risk if inaccurate. Downey highlighted that having strong, meaningful, first-party data is essential in fueling effective AI.

Shoptalk also saw social commerce marketplace Poshmark discuss incorporating a “human in the loop” to ensure that AI-generated results are accurate and appropriate. Cloud-based software company Salesforce is also incorporating human feedback in its recently announced EinsteinGPT generative AI platform.

Downey discusses the impact of AI
Source: Shoptalk

 

When used correctly, AI can boost the accuracy, efficiency and effectiveness of a company’s data analysis capabilities. Seemantini Godbole, EVP and Chief Digital and Information Officer at home-improvement retailer Lowe’s, explained how AI-powered data analytics has enabled the company to improve its sales trends, make strategic changes to increase sales, and reduce friction for customers across all channels.

While the vast majority of speakers at Shoptalk were highly supportive of generative AI technology, Jeffrey Katzenberg, Co-Founder and Former CEO of DreamWorks Animation and Managing Partner at WndrCo (a holding company that invests in and develops consumer technology businesses), offered a word of caution, stating that generative AI poses a risk as inaccurate content is harmful to a brand’s image and reputation. Katzenberg believes that “sanctioned” AI would be most reliable and, therefore, helpful to retailers.

• Read our separate report to learn five things retailers should know about ChatGPT and generative AI, including the benefits and pitfalls of such solutions as well as the technology landscape.

2. Store Experience

Retailers Are Experimenting with New Store Formats

Various retailers at Shoptalk 2023 discussed how they are experimenting with new store formats and concepts to more effectively draw consumers into their stores to engage with products, learn more about the brand, have fun and, ultimately, make a purchase.

Marie Driscoll, Managing Director of Beauty and Luxury at Coresight Research, presented on new opportunities for luxury brands to connect with consumers, such as tapping into circularity, inclusivity and consumers’ sustainability values, in the session “New Challenges and Opportunities in Luxury.” During the panel, Sandeep Seth, Global Chief Marketing Officer and President of North America at luxury fashion house Coach, discussed how Coach is unlocking these opportunities through store-format experimentation. The company’s Coach Play concept store in Chicago invites consumers to physically engage with products and play with personalization by creating their own designs.

• For more on Driscoll’s session, see the New Challenges and Opportunities in Luxury event presentation.

Sandeep Seth, Global CMO and President of North America at Coach (far left); Marie Driscoll, Managing Director of Beauty and Luxury at Coresight Research (far right); and other panelists discuss opportunities to improve consumer engagement in the luxury space
Source: Coresight Research

 

When designing new store formats, brands and retailers must keep the consumer at the center of the design. Tolga Oncu, Retail Operations Manager (COO) at Ingka Group (IKEA Retail), discussed how IKEA has started introducing smaller-format stores to complement its 370 global flagship stores. The new format directly responds to consumers’ desire for closer IKEA stores. Per Oncu, IKEA found that consumers who enter these closer, smaller stores often have not shopped at IKEA in 12–24 months, but, after exploring these stores, will visit the company’s website or make a trip to their nearest flagship store.

Mary Dillon, President and CEO at US sportswear and footwear retailer Foot Locker, discussed how the company hopes that reimagining its store footprint—including its store formats—will help it connect with consumers and remain culturally relevant. Currently, 8% of Foot Locker stores are community stores, meaning they hire locally, put on “activation events” for families and feature local art. Foot Locker plans to increase its portfolio of these community stores and introduce more off-mall and larger-format locations to enhance the shopping experience for its customers.

A Foot Locker community store
Source: Foot Locker

 

Unlocking the Superpowers of Store Associates

Throughout the conference, many brands and retailers emphasized ways in which they are unlocking the power of store associates, leveraging technologies to increase associate productivity, and utilizing associates as effective brand educators and ambassadors.

George Hanson, SVP and Chief Digital Officer at Panera Bread, an American fast-casual restaurant chain, discussed how the company has introduced new technologies to assist customers and store associates alike. These technologies include Amazon One palm-recognition technology, which links MyPanera loyalty memberships to customers’ Amazon One profiles and enables Panera associates to offer a more efficient and personalized experience. Panera’s technologies can also minimize low-value interactions between store associates and customers, if the customer chooses—for instance, customers can opt for “contactless dining”—freeing up store associates for more meaningful work.

Panera Bread uses Amazon One palm-recognition technology
Source: Amazon

 

Yael Cosset, SVP and Chief Information Officer at supermarket chain Kroger, also spoke on how technology can empower store associates. Kroger leverages AI to help train associates faster and enable trainers to complete their tasks quicker. The company’s inventory management technology further empowers store associates by providing better visibility into on-shelf inventory and incoming stock on trucks.

In addition to improving the efficiency of store associates, retailers at Shoptalk 2023 discussed leveraging associates as educators and brand ambassadors. Joanne Crevoiserat, CEO of Tapestry (a luxury multinational holding company that operates Coach New York, Kate Spade New York and Stuart Weitzman), shared how Coach has discovered that its most passionate brand advocates are not its customers but its store associates. As a result, its associates now behave as influencers, reaching out to customers on digital channels and styling Coach products on social media, which the brand has found to be some of its most engaging content.

Similarly, Carrie Baker, President of luxury apparel brand Canada Goose, explained that, for luxury brands specifically, store associates are essential to brand storytelling and understanding consumers’ shopping needs, as they are in the stores every day, interacting with customers. Store associates also provide a vital connection to the local market, which is crucial in connecting with consumers worldwide while remaining true to the brand.

Baker discusses the evolving role of store associates at Canada Goose
Source: Coresight Research

 

3. Shopper Engagement

Video Drives Engagement and Awareness

Worldwide, brands and retailers are leveraging a multifaceted approach to video commerce to increase brand awareness, foster product education, build online communities and more. At Shoptalk 2023, we heard many retailers speak to the effectiveness of livestreaming, as well as how they are experimenting and introducing video into their marketing and sales strategies.

Kevin Miller, Chief Marketing Officer at supermarket chain The Fresh Market, shared how livestreaming has transformed the company’s digital platforms and enabled it to re-engage its “super users.” As a result, The Fresh Market’s e-commerce business has seen a double-digit surge since it started livestreaming, according to Miller.

Coresight Research believes that the livestreaming channel offers retailers an opportunity to engage in storytelling and product and brand education, as well as drive engagement and sales. We expect the livestreaming e-commerce market in the US to nearly triple in size from 2021 to 2023, growing to $31.7 billion.

• View our full coverage of livestreaming e-commerce, including 10 Key Trends Shaping Livestreaming E-Commerce in 2023.

In addition to livestreaming, video implementation more broadly can significantly drive revenue for retailers and brands. Ready from Pinterest spoke to the power of short-form video in driving conversion. Unlike other social media platforms, Ready claimed that users come to Pinterest in a “shopping mode,” not an entertainment mode. He also stated that short-form video drives 10% of engagement but 30% of Pinterest’s revenue, making it a powerful revenue driver.

Imran Khan, Co-Founder and CEO at Verishop, an online lifestyle shopping platform, emphasized that video is the best way for brands to tell stories, stating that livestreaming, shoppable video and video reviews improve conversion rates by 42%. Verishop uses machine learning (ML) to edit and repurpose previously livestreamed content into clips, driving further engagement.

Khan (right) discusses Verishop’s video-commerce strategies
Source: Coresight Research

 

We also heard beauty brand executives discuss strategies for leveraging different types of video content for different purposes. Shai Eisenmann, Founder and CEO of skincare brand Bubble Skincare, said that the company uses long-form video sites, such as YouTube, for educational content and short-form video platforms, such as TikTok, to engage with consumers authentically and show a different side of the brand.

Personalization Is Key in 2023 and Beyond

In the face of brisk economic headwinds—and, as a result, a more cautious consumer—many brands and retailers are deploying personalization strategies and technologies across the shopping journey to grab consumers’ fragmented attention, increase engagement and, ultimately, drive higher conversion and loyalty. During Shoptalk 2023, many retailers discussed how they plan to enhance their personalization strategies moving forward, such as by leveraging both AI and first-party data to better engage with their customers.

Amanda Bopp, VP of North America Marketing at Kate Spade, an apparel and accessories company, explained why personalization is so important: it shows that retailers understand that their shoppers are complex humans and will not simply reduce them to general categories, such as their preferred shopping channels. The session highlighted personalized language as one of the most critical elements of a retailer’s overall personalization strategy, as it can significantly impact how a consumer responds to specific offers.

However, while consumers desire personalized shopping experiences, they can also easily be “creeped out” when retailers ask for too much data, according to Carrie Tharp, VP of Retail and Consumer at Google Cloud, the cloud-computing services arm of Google. Tharp explained that retailers must research and test what personalization options will work for their brand identity and customers. Consumers are willing to give retailers data, but only if they use it to provide a better, more personalized experience. “There is no such thing as too much personalization, just personalization done wrong,” Tharp stated.

Consumers could also be put off if they feel that a retailer is trying too hard to personalize the experience. As Mike Calvo, Chief Technology Officer at Shipt, a delivery service owned by Target, explained, “if it feels like personalization, you have done it wrong. If it feels seamless and that the brand or retailer understands you, then you are doing it right.” According to Calvo, the key to effective and seamless personalization is combing high-quality, accurate data with a strong data team that understands complex systems and can find new, previously unthought-of solutions.

Bopp from Kate Spade (far left), Calvo from Shipt (second from the left) and others discuss personalization
Source: Coresight Research

 

4. Emerging Channels

Social Media and Secondhand Markets Are Among the Top Emerging Retail Channels in the US

The combination of new technologies and consumers’ evolving mindsets and preferences is giving rise to new, emerging retail channels, such as social media and secondhand markets. Pinpointing what emerging channels and trends will work best for their needs and audience will be crucial for brands in 2023 and beyond.

Ready of Pinterest stated that social media shopping has not worked so far because it “leans on entertainment” instead of being centered on shopping. Brands and retailers should leverage social media platforms with users that go to the platform with the intent to shop, such as Pinterest, to meet shoppers where they are and deliver a higher return on investment (ROI) on their social media marketing spending.

Ready discusses the power of social media during the “Rediscovering the Joy of Shopping” session
Source: Coresight Research

 

Working with the right influencers and content creators is an essential part of any social media campaign. Many younger shoppers lean on the recommendations of influencers and content creators when deciding the details of their purchase, including if, where and what to buy. Panelists in the “The Rise of the Creator Economy” session covered how retailers should work with influencers that resonate with shoppers and trust content creators as knowledgeable consultants, bringing them in-house to help further develop the brand.

During Shoptalk 2023, many retailers also discussed their growing interest in the secondhand fashion market, as 50%–60% of “younger consumers want to buy secondhand when shopping,” according to Anthony Marino, President of ThredUP, an online consignment and thrift store. Emily Gittins, Co-Founder and CEO of Archive, noted that, currently, the top three drivers of the secondhand market (on the consumer side) are:

1. Discounted prices on good brands
2. The scarcity and rareness of offered goods
3. Growing desire for more sustainable retail options

Coresight Research believes that interest in fashion resale offerings will continue to grow alongside consumers’ increasing environmentalism and awareness of sustainability practices. We expect the fashion resale market to continue its current momentum, with year-over-year growth of 14.6% in 2023 and 13.0% in 2024, for a $36.4 billion market by the end of 2024.

Multichannel Strategies Target Consumers Where They Are

Given today’s challenging macroeconomic environment and level of retail competition, retailers need multichannel strategies that meet consumers wherever they are in the shopping journey.

During Shoptalk 2023, we heard many retailers discussing the benefits and hurdles of various channels. David Katz, EVP and Chief Marketing Officer at Randa Apparel and Accessories, covered the strengths of the wholesale channel, which include the ability to scale, sell products in larger volumes and interpret product performance data across different retailers and geographies. Additionally, wholesale data does not present data privacy concerns, unlike the first-party data garnered from direct-to-consumer (DTC) channels. Advantages of the DTC channel include access to first-party data, complete control of products and storytelling, and more nimble product experimentation. Most importantly, thoughtful integration of these two channels can produce a halo effect, according to Chris Clark, Co-Founder and Chief Digital Officer at Grove Collaborative, an e-commerce retailer of natural household and personal care products.

A similar halo effect was discussed by Tamara Pircz, VP of Digital Commerce at The Vitamin Shoppe, a nutritional supplement retailer, who explained how integrating more marketplaces into a brand’s channel strategy provides increased visibility, enables more product research and pushes the brand to the top of consumers’ minds, making them more likely to make a purchase. The importance of a seamless channel strategy was also emphasized by Beth Gerstein, Founder and CEO of ethically sourced jewelry brand Brilliant Earth. Brilliant Earth leverages online technology to gather first-party data, allowing the company to create a better offline experience in their showrooms, thereby providing a seamless and personalized shopping experience.

Pircz (second from the left) and other panelists discuss the advantages of utilizing multiple marketplaces
Source: Coresight Research

 

5. Organizational Changes

Reimagined Partnerships in the Retail Ecosystem Drive Cultural Relevance

Several retailers are rethinking the role of strategic partnerships to improve their businesses, including by partnering with technology solution providers to increase digitalization, sustainability, and cultural and consumer relevance, as well as create disruption.

In two separate sessions, Samina Virk, CEO, North America, at Vestiaire Collective, an apparel and accessories resale platform, and Natasha Franck, Founder and CEO of technology solution provider EON, touched on an exciting partnership benefiting Vestiaire Collective, EON and luxury brand Chloé. The partnership enables Chloé to embed a unique digital ID into all of its products, enabling full lifecycle tracking for products and the creation of product ownership certificates. These certificates will help authenticate the products and enable instant reselling on Vestiaire Collective.

EON Instant Resale brings automation to the selling process for the Chloé brand on Vestiaire Collective
Source: EON

 

Natasha Franck (second from right) discusses EON’s strategic partnership with Chloé and Vestiaire Collective
Source: Coresight Research

 

Yehuda Shmidman, Chairman and CEO at investment company WHP Global, discussed how Toys “R” Us is entering strategic partnerships to provide exclusive products to its customers, with the hope of providing more exciting and relevant products.

Morgan Flatley, Global Chief Marketing Officer and Head of New Business Ventures at fast-food chain McDonald’s, spoke to the importance of brand partnerships at McDonald’s. Brand and celebrity partnerships have helped the company connect with consumers in new ways and create more inclusivity, with Flatley specifically citing partnerships with musicians BTS and Travis Scott.

Similarly, Natalie Mackey, Founder and CEO at cosmetics brand Winky Lux, discussed the company’s unexpected partnership with Applebee’s to create a collection of four high-shine lip glosses with flavors inspired by Applebee’s wing sauces. After the product’s launch, Saucy Gloss and brand saw an explosion of online activity, achieving 2.5 billion media impressions, according to Mackey. Although the fun collaboration was unexpected, Mackey stated that it was authentic to the Winky Lux spirit.

Applebee’s x Winky Lux: the Saucy Gloss collection
Source: Winky Lux

 

Companies Look To Hire Top Talent and Increase Productivity

Changing technological and environmental landscapes and shifting consumer demand are just some of the catalysts driving retailers to make significant organizational changes, allowing them to adjust to the new retail environment and optimize their growth positioning.

Hiring qualified, knowledgeable talent is critical to keeping up with the latest technological advancements and applications in retail. In the “Attracting Top Tech Talent To Shape the Future of Retail” session, panelists discussed how to attract top talent, emphasizing that retailers must understand why tech talent decides to leave a company. According to the panel, the top four reasons are:

1. Seeking better career opportunities
2. Looking for a new challenge
3. Feeling underappreciated or undervalued in their current role
4. Believing that their work-life balance no longer meets an acceptable standard

All panel members agreed that hiring technology talent is a long, continuous process that must include a variety of factors, such as actively sourcing passive candidates, leveraging employee networks, retailoring job descriptions, gamifying the recruiting process and increasing hiring flexibility. Still, speed is essential, since despite the current prevalent headlines of job cuts in the tech sector, qualified applicants may have several job offers by the time of their first interview.

The “Attracting Top Tech Talent to Shape the Future of Retail” session (left to right): Bruno Mourão, Head of IT Transformation and IT Strategy and Experimentation at MC Sonae; Nicolas Geiger, Group Business Development Executive, Americas, at L’Occitane Group; Marta Dalton, VP Data Analytics and Customer Insights at Amyris (Biossance); David Welch, Managing Director and Senior Partner at Boston Consulting Group
Source: Shoptalk

 

In addition to searching for the best ways to hire new talent, many retailers are seeking to increase the productivity and flexibility of workers with technology. Krystina Gustafson, SVP of Content at Shoptalk, and Joe Laszlo, VP of Content at Shoptalk, discussed three ways for brands and retailers to implement tech-based changes to enhance working conditions: adding flexibility to the front-line employee journey by advancing scheduling and training technology; empowering store workers with emerging technology and data via tablets and similar devices; and creating new opportunities through technology initiatives.

Retailers should also look for new ways to improve the employee experience to increase satisfaction and productivity levels. Alexis DePree, Chief Supply Chain Officer at Nordstrom, and George Hanson, SVP and Chief Digital Officer at Panera Bread, both discussed how the companies are bettering their employee experiences. They spoke to the impact of AI and automation on employee experiences, which has allowed the retailers to reduce “micro-friction” while their employees are freed up to do more fulfilling work.

What We Think

Each year, Shoptalk unites leading brands, retailers, technology companies, investors and more to explore the evolving retail landscape and pave the way for next-generation retail. Shoptalk 2023 focused on several critical retail themes—technology, store experience, shopper engagement, emerging channels and organizational changes.

With the worldwide macroeconomic outlook remaining uncertain overall, many brands and retailers are prioritizing the consumer by utilizing technology to enhance the shopping experience and enabling their employees to focus on meaningful work and customer interactions, a topic of much conversation at this year’s event. We believe that global brands and retailers of all sizes should continuously look to innovate across their organizations and operations to adjust to the shifting retail landscape and provide their shoppers with the best retail experience possible.