Introduction

The Coresight Research team is attending and participating in this year’s Shoptalk conference, held on March 27–30, 2022, in Las Vegas, US. The conference brings together almost 3,000 established retailers, brands, technology companies, investors, Wall Street analyst firms and more under one roof. Shoptalk 2022 features 250+ speakers, 150+ CEOs, 80+ sessions and over 600+ sponsors. The conference presents an opportunity to gain insights into emerging trends and recent innovations. In this report, we present our top insights from day one of the show on March 27, 2022.

Shoptalk 2022 Day One: Coresight Research Insights

Shoptalk 2022 Is Retail’s In-Person Reunion In the opening remarks, Rebecca Sausner, General Manager of Shoptalk, welcomed everyone back to the first in-person gathering since 2019. Not only is this year’s Shoptalk event retail’s big reunion, she explained, it is the largest one yet, featuring an audience of over 10,000 people from 48 different countries. Sausner said that Shoptalk 2022 is based on matchmaking, facilitating one-to-one meetings among 1,400 retailers and brands and 400 solution partners. Furthermore, two-thirds of the speakers at this year’s events are C-level executives and higher, offering their unique expertise on how retail is evolving. Notably, more than half (51%) of speakers at Shoptalk 2022 are women, and 33% of speakers represent diverse groups, according to Sausner. Nautical Commerce and ReUpp Headline the “Shark Reef” Startup Pitch Competition The “Shark Reef” startup pitch competition at Shoptalk 2022 was hosted by Deborah Weinswig, CEO and Founder of Coresight Research. The event featured 15 early-stage tech startups, each of which presented for three minutes on how their offering could resolve prevailing challenges in retail. An expert panel of judges selected the Sharks’ Choice winner as multi-vendor marketplace platform Nautical Commerce. As a prize, the company has been offered a $100,000 investment backed by Commerce Ventures. The audience voted for the Audience Choice winner, buy-back solution provider ReUpp. The company won the opportunity to feature in a future LinkedIn Live event hosted by Coresight Research, presented by Weinswig.

• Read our Shoptalk 2022—“Shark Reef” Startup Competition Recap for insights from the event.

[caption id="attachment_144310" align="aligncenter" width="700"] From left to right: Neeta Rastogi Singh, Chief Operating Officer at Activant Capital (judge); Matt Nicholas, General Partner at Commerce Ventures (judge); Lauryn Vaughn, Founder and CEO of ReUpp (Audience Choice winner); Ryan Lee, Founder and CEO of Nautical Commerce (Sharks’ Choice winner); Deborah Weinswig, CEO and Founder of Coresight Research; Joe Laszlo, VP of Content at Shoptalk; and Diana Melencio, Partner at XRC Labs (judge)
Source: Coresight Research[/caption]   Prestige Beauty Accidentally Innovates in Sustainability In the mainstage keynote session titled “Disrupting with Technology, Community and Purpose,” JuE Wong, CEO of haircare brand Olaplex, explained how prestige beauty became an “accidental innovator in sustainability.” Wong said that the industry is focused on packaging, and some brands have made the conscious decision to not have an additional, second box of packaging, which is resulting in significant environmental benefits. For example, Olaplex has saved 57 million gallons of water, 44,000 trees from being deforested and an additional 35 million pounds of greenhouse gases between 2015 and 2021, according to Wong. Furthermore, Wong highlighted that the saved water is able to boost the supply of water in 5,000 American households per year. If all brands choose to make a decision as simple as eliminating secondary packaging, the industry can eliminate millions of pounds of waste, per year. Haircare Is a New, Fast-Growing Prestige Beauty Category The haircare category has grown in importance and now represents its own category within prestige beauty—and is the fastest growing category with the segment, according to Wong. She coined the term “skinification” of hair to denote how consumers are increasingly seeking the same kind of functional benefits in their haircare products as they currently do with skincare. Wong has a background in cosmeceutical skincare, and she emphasized that many of Olaplex’s products have functions that are based in science, with the company having more than 100 patents in haircare. A large proportion of Olaplex’s products are sold by haircare professionals, who have a doctor-patient type of relationship with their clients. In a company-sponsored study, more than 60% of consumers reported that they take haircare product recommendations from their stylists. Sam’s Club Is Attracting More Millennial, Digitally Savvy Consumers Kath McLay, CEO at Sam’s Club, announced during her mainstage keynote interview that 2021 was a record year of membership growth for the company. McLay claimed that Sam’s Club achieved 27% growth, on a two-year comp stack basis, in membership in the fourth quarter of 2021. More recently, the company’s 2022 Superbowl ad drove significant membership growth. McLay owes the growth to Sam’s Club innovations in in-store shopping experiences, specifically the “scan-and-go” and “scan-and-ship” features:

• The scan-and-go feature enables shoppers to control their purchase journey on their phone. If they see an item they are interested in, customers can scan the item on their phone and pay via mobile, making for a more convenient checkout experience.
• The complementary scan-and-ship feature is helpful for customers that purchase bulkier items that may be difficult to transport, as they can schedule home delivery for the items they buy in-store.

Interestingly, McLay explained, Sam’s Club is also witnessing customers use the features to scan an item but delay making a purchase, only to return and purchase it at a later date. Improving Retention Rates Is a Key Focus for Subscription-Based Retail Lovevery, a subscription-only business, offers innovative Play Kits for children up to age four. The company has so far raised $126 million in funding, according to Co-Founder and CEO Jessica Rolph. Toys are designed to support children’s brain development at each stage of their growth and support children in building meaningful connections—with play, with their parents and with the world around them, Rolph explained. Rolph said that what makes subscriptions work is that the company “hones in on purpose” and keeps its offering fresh. The consumer (the baby) changes significantly during the four-month interval between subscription shipments, so Lovevery is delivering a new experience with every Play Kit. Rolph highlighted that the company also surveys thousands of customers (the parents) monthly, about six to eight weeks after a Play Kit is delivered, for greater insights into the success of each kit, and follows up 67% of the time with a real human to dig into the nuances around lost subscriptions and product complaints. Private Traffic Is the Next Phase of Leading-Edge Chinese E-Commerce China retail has evolved differently and leapfrogged the West in many aspects, the panelists highlighted during Shoptalk’s “China and the World’s Most Innovative Retail Experiences” session. One key difference is the lesser use of email as a communication medium with Chinese consumers. Consumers instead use “super apps” such as Tencent’s WeChat and Alibaba’s Taobao, that enable them to shop, chat, pay bills and make travel reservations. Store associates often share their WeChat IDs with consumers to stay in contact with associates and other consumers in these chat groups about the products they buy. Consumers can also share product information and tips with like-minded shoppers, and this information-sharing decreases returns and increases consumer loyalty. Private traffic links the brand and store more closely to the consumer and so functions much more effectively than email campaigns, the panelists emphasized. [caption id="attachment_144311" align="aligncenter" width="700"] From left to right: Connie Chan, General Partner at Andreesen Horowitz; Liya Wu, Founder and CEO of ShopShops; Tony Shan, Head of Tmall Global, the Americas, at Alibaba; and Jordan Berke, Founder and CEO of Tomorrow Retail Consulting
Source: Coresight Research
[/caption]   Transparency Is an Enormously Beneficial Component of Good Leadership… Up to a Point The conversation in “Retail CEOs in Conversation: Becoming a Great Leader” centered on the qualities necessary for good corporate leadership. The participants agreed that although a “hero mentality” works well for startups, once the company has grown, planning for success becomes a more essential quality, and this often involves the creation of cross-functional teams so that employees can see the big picture of the goals of the organization. Another ingredient for corporate success is data transparency—making performance metrics available to all, rather than being kept under the cloak of secrecy. The availability of data enables management to explain its decisions for the rest of the organization to know where they stand. Transparency should also extend on a personal level to enable management to connect with employees and create a happy working environment. However, while authenticity is a positive quality for management, it is better for employee morale that managers share their joyful emotions but supress negative emotions, the panelists urged. The panelists also discussed how companies encounter diversity and inclusivity issues, which are challenging to solve. They recommended that management create a safe space in which such issues can be discussed and managed openly. [caption id="attachment_144313" align="aligncenter" width="700"] Left to right: Jennifer DiMotta, Founder and CEO of Uprisors; Christine Day, CEO of The House of LR&C; and Charlie Cole, CEO of FTD
Source: Coresight Research[/caption]   US Healthcare Services Must Transform To Support Physical and Mental Wellbeing for All The Covid-19 pandemic revealed unavoidable truths about the US healthcare system, and fresh thinking with new ideas are needed to solve the problems of chronic disease, affordability and access to healthcare, retail leaders at Shoptalk 2022 emphasized. Tracey Brown, President of Retail Products and Chief Customer Officer at Walgreens, suggests that the industry should work together in communities to solve the health crisis. Using AI (artificial intelligence) and ML (machine learning), Walgreens isolated 25 cultural factors that contribute to a broken system, from a breach of trust to a blurred sense of responsibility to friction within the healthcare industry. In the US, the existing healthcare system is built for acute, hospital and urgent care, not physical and mental wellbeing for all, Brown said. According to Brown, the solution lies in people, infrastructure, accessibility, embeddedness and partnerships. Walgreens has picked up the mantle to drive change with its 90 million shoppers by embedding healthcare in the social fabric of its community. Brown said that partnerships across the healthcare ecosystem are necessary to provide people with the access necessary to live their best lives. [caption id="attachment_144314" align="aligncenter" width="700"] Source: Coresight Research[/caption]   There Are Opportunities in Online and Offline Retail Models, and Interest in Retail M&A Is On the Rise On day one of Shoptalk 2022, three seasoned investors addressed the changing consumer and the business models with the greatest opportunities: Hans Tung, Managing Partner at GGV Capital; Anna Barber, Partner at M13; and Sara Araghi, Partner at Franklin Templeton. They presented a string of ideas for investment, including online, offline, wellness, ESG (environmental and social governance), NFTs (non-fungible tokens), mental health apps, food tech, circular economy, creator economy and the metaverse. Barber is bullish on the role of the physical store following its heightened significance in the last mile amid the Covid-19 pandemic. Furthermore, people returned to stores when they reopened—proof that brick-and-mortar shopping still has a place in the modern world to acquire customers, market to them, provide an experiential platform and generate profits, Barber said. The IPO (initial public offering) market has cooled, and it is a challenging time for an unprofitable company to go public given the lack of predictability with inflation and the geopolitical situation; the investors at Shoptalk suggested waiting it out. Investors are hyper focused on profitability. The prevailing perception is the SPAC (special purpose acquisition company) market is bottoming out and becoming less attractive, which is less a reflection on the quality of the company and more a reflection of the market, the investors said. This is sparking interest in the M&A market, and Barber expects to see more activity through 2022.