Lockie Andrews

AI in Retail: Bridging the Gap Between Ambition & Readiness for Generative AI I recently spoke with Michelle Pacynski, Ulta Beauty & Mike Dupuis, SPARC Group LLC about this topic. Before diving in, I find it helpful to ground the conversation in recent data: 1. According to a recent Forbes estimate, the AI market size is expected to reach $407 billion by 2027. 2. A global Accenture study (July) highlights that: - Companies with strong digital capabilities (data, cloud, security, etc.) are reinventing 2x as many functions with AI & are expected to drive 2x the value creation. - 50% of executives believe they can scale generative AI across their enterprise within 6-12 months, but only 13% are confident they have the right data strategies & digital capabilities to fully leverage GenAI. Why the gap? These insights set the stage for a deeper conversation. Here are some key themes we explored: 1. AI integration frameworks they've adopted: - Assist, Augment, Automate – This framework has helped categorize the 15-20 AI pilots running at any given time. It has especially reduced the pressure to automate everything right away, allowing teams to focus on assistive & augmentative use cases first. 2. Real-world AI implementation examples that required process changes & KPI definition: - Leverage GenAI from your SMS partner to create new audiences & test custom messaging. Process changes included: new workflows for both internal & external teams. KPIs: # of new customers acquired & conversion rates. - Launch a GenAI conversational experience during peak sales to manage case loads, while ensuring real humans are available for more complex queries. Process changes included: customer query routing & escalation procedures, with KPIs focused on # of cases resolved to satisfaction, incremental revenue from case resolutions etc. 3. Keeping up with the evolving world of AI: a) Follow key professors like Ethan Mollick & Stefano Puntoni b) Stay close to the VC community to learn about emerging applications & how people are thinking about the future c) Access to product engineers & innovation through involvement on Boards (e.g., Cordial) d) Attend key tech events like CES and SXSW. 4. How AI can transform retail, from customer experience to back-end operations: - Use weather data to inform inventory buying & planning, ensuring customers get the products they want in the channel they prefer. - The retailer that best uses GenAI applications to develop personalized & on-brand communication with customer segments will create the most value. c) Empower consumers to virtually try on products & learn more about them, both online & in-store. Finally, some questions to consider: - I wish consumers knew AI… - I wish regulations did… - I hope someone develops… There’s no doubt that AI is omnipresent, but achieving meaningful impact requires strong digital strategies, partnerships, and a sharp focus on data governance. #AI #Innovation #Transformation #Leadership

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Another AVN season in the books (exhale). Not surprisingly, 72% of brands faced some level of challenges within their negotiations compared to 15% citing collaborative or efficient AVNs. 14% haven’t resolved their AVNs yet. According to our benchmarking, negotiating favorable terms is the #1 challenge brands face during AVNs. What challenges did you face within your AVN? And are you curious how your Amazon AVN experience, terms, and profitability compare your peers? Join me and Martin Heubel next Tuesday 6/25 where we’ll dig into the full results from our AVN Wrap-Up survey of 250+ brands. Register here: https://lnkd.in/eAD48b_g We’ll be covering: ✅ AVN intensity ✅ 2024 trade term %s ✅ AVN impact to brands’ margins ✅ Key profit levers for the year ahead ✅ and a chance to ask ALL your AVN questions! A must-attend for 1P vendors. See you there!

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#HotTake: Retail stores aren’t a shortcut to success. Retail offers bigger POs, visibility, and cash flow Yet, it doesn’t ensure brand sustainability Case in point: JLo Beauty Despite celeb status and prime placement at Sephora, She faced challenges resulting in a US exit Retail alone doesn’t secure loyalty or repeat sales Placement isn’t guaranteed forever For lasting success, think beyond the retail PO Some markers of a sustainable brand include: Authenticity, community, differentiated formulas, and true fans Building a lasting brand legacy requires more than a retail presence – 👋🏾 Hi, I’m Monique, a former retail buyer turned beauty industry advisor who helps emerging brands ready to scale at big retail. If you are ready to scale and invest, book a discovery call, and let’s see if we can work together.

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DTC/Digital Native Brands struggle to achieve scale. CPG portfolio's are stagnating. Consumers are trading down, and retailers owned brands are disproportionately growing. Target, Costco, Trader Joes, and Aldi owned brands are winning. Now Walmart has launched a formidable new elevated basics brand, BetterGoods. The best way to beat the Amazon/Temu/Shein/TikTok marketplaces is to sell products they don't have.

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BRILLIANT RESEARCH: Five 2024 Holiday Shopping Predictions https://lnkd.in/emwXStw7  Holiday shopping will look different for retailers this year.  After remaining largely resilient throughout four years of economic uncertainty, consumers are finally feeling the pinch.  Nearly a third of global shoppers (32%) reported using alternative credit services like buy now, pay later (BNPL) more frequently this year #retail Digital Commerce 360

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"Really good retailers are re-thinking the purpose of the store." And it's about time! In 2018, I co-authored an IBM Institute for Business Value white paper on how #retailers needed to reTHINK their stores. It started with the idea that #stores still matter, but they need to play different roles than they had in the past. Six years (and one pandemic) later, we're seeing the difference between stores that "sell stuff" and stores that create a "treasure hunt," offer "experiences [customers] can't find online," fulfill online orders for pickup (BOPIS), shipping (BOSS), and local delivery (BOLD), and provide a place to see, touch, and feel products before making a purchase. The framework we developed (in the comments) is as relevant today as it was then.

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Complex and major initiatives often require an increased focus on initial expectation setting and managing expectations during the change. Also, a potential reminder that Wholesale can be an important channel and that many times a Both/And solution can surpass an Either/Or. Meeting a wide variety of customers using the Reach of E-commerce and Wholesale partners AND including the touch/experience at Nike Stores as well as stores in areas that may not easily be served by existing Nike Stores ( ~300 in the USA and ~1,000 globally). Your thoughts? Excerpts: Dive Insight: Nike’s Consumer Direct Offense and Acceleration plans are coming under attack in a new class action lawsuit that alleges two of the brand’s top executives misled investors about how successful the strategy was. “Throughout the Class Period, Defendants repeatedly touted the purported strength of Nike’s business model, and in particular, the claimed success of its digital and direct-to-consumer strategies to produce sustainable growth, while downplaying the significant competitive pressures facing the Company,” the lawsuit reads. The lawsuit recounted Nike’s efforts to ditch wholesale partners in 2020, which continued into 2022 in a much-discussed shift away from Foot Locker, as well as the retailer’s subsequent return to many of those partners when its DTC strategy didn’t deliver as intended. Indeed, on the back of disappointing sales results, Nike late last year rolled out a cost-savings plan aimed at driving growth and profitability. The plan included layoffs, as well as a simplification of its product portfolio, with executives referencing its shift to a DTC model as a reason for the cuts. “Since fiscal ’19, our investments in accelerating Nike’s consumer direct vision have created new operating capabilities, added tens of millions of new members to our member base and delivered a return of more than $12 billion of incremental revenue,” Friend said on a call with analysts at the time. “However, we have also added complexity and inefficiency. In this competitive environment, we need to accelerate our pace of innovation, elevate our marketplace experiences, maximize the impact of our storytelling, and increase our speed and responsiveness.” Donahoe followed that up in March by acknowledging that the company needed to make some “important adjustments” to its Consumer Direct Acceleration strategy, as Nike was not “performing at our potential.” #Nike #DTC #Retail

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𝐍𝐄𝐖 𝐁𝐋𝐎𝐆!🎉🎉 𝑹𝒆𝒕𝒂𝒊𝒍 𝑮𝒆𝒕𝒔 𝑫𝒆𝒆𝒑 delves into the heart of the topics that really matter in retail. I take a magnifying glass🔍to compelling topics pulled from my podcast episodes, media contributions, and those of industry leaders, expanding on key points and ideas that deserve a closer look.🥸 Inaugural article: 𝐋𝐚𝐫𝐠𝐞 𝐚𝐧𝐝 𝐈𝐧-𝐂𝐡𝐚𝐫𝐠𝐞: 𝐖𝐡𝐲 𝐅𝐥𝐚𝐠𝐬𝐡𝐢𝐩𝐬 𝐀𝐫𝐞𝐧'𝐭 𝐅𝐥𝐚𝐠𝐠𝐢𝐧𝐠 𝐢𝐧 𝐭𝐡𝐞 𝐃𝐢𝐠𝐢𝐭𝐚𝐥 𝐀𝐠𝐞🚩A recent RetailWire article asked the burning question: Are flagship stores necessary for retail brands? I pointed out that flagships aren't a must-have for every brand, but they sure are a nice-to-have for many. Flagships are a fantastic way for brands to take control of customer experience, own the brand story, and show off the latest and greatest in-store tech.  𝐂𝐇𝐄𝐂𝐊 𝐎𝐔𝐓 𝐓𝐇𝐄 𝐅𝐔𝐋𝐋 𝐀𝐑𝐓𝐈𝐂𝐋𝐄 https://lnkd.in/gpcn2Gmp

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It’s not just about price—that was the headline that reporters from Retail Dive, Footwear News, and other outlets took from the AlixPartners U.S. Consumer Footwear Survey for the back-to-school season. We found that price ranked below quality and value for 1,000 parents preparing to shop for shoes, and that one-third of consumers start their footwear search on Amazon.com, but nearly two-thirds intend to purchase shoes in-store—armed with deep knowledge of differing price points for the same shoe, product qualities, and ranges between brands. These topline findings have big implications for how footwear brands and retailers coordinate their online and offline business. Find out more in our discussion of how leaders in the footwear industry are meeting the moment. https://lnkd.in/ddiNXGvw

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Things are hotting up in the east vs west battle for global dominance of the premium department store space. Hudson's Bay Company owned Saks Fifth Avenue merging with Neiman Marcus Group further cements Richard Baker’s ambitions to create the ultimate global luxury department store conglomerate. How stable mates Hudson's Bay and GALERIA Karstadt Kaufhof GmbH will be involved in this is not yet clear but the involvement of tech behemoths Amazon and Salesforce in this move is the ultimate enabler for global consolidation in both the physical and digital space. Given the collapse of FARFETCH, the questionable future of NET-A-PORTER, and the resurrection of the department store as brand aggregator, there is a void here to be exploited for sure. Currently the Thai giant Central Group leads the field in this, linking Selfridges group, THE KADEWE GROUP, DeBijenkorf BV, Brown Thomas Arnotts , Rinascente ILLUM GLOBUS CRG and Robinsons Retail Holdings Inc. On a market by market basis there has been little cross over, other than Germany, but the digital space could see a direct battleground. Perhaps a purchase of YOOX NET-A-PORTER might be a logical place for one of them to go next? https://lnkd.in/eaxV8AXX

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As we look toward the retail holiday season and planning for the year ahead, MOHR Retail will be hosting a panel discussion that explores the landscape of retail store environments today, focusing on a range of topics, including the dynamic roles of store teams, the rise and fall of self-checkout systems, how stores are increasingly becoming fulfillment centers, and how successful retailers are addressing issues related to mental health, safety, and burnout amid preparations for the holiday season. Here’s a quick overview of some of these hot-button retail store trends and issues and what we’ll be focusing on during the webinar: ↪The Evolution of Store Roles With the surge of Buy Online, Pick Up In-Store (BOPIS) options and stores doubling as fulfillment centers, retail teams are adapting to new responsibilities. The traditional role of a store employee has shifted from managing in-store tasks to balancing online orders and managing stock all while building loyalty by ensuring a seamless customer experience, both online and offline. ↪The Rise and Fall of Self-Checkout Self-checkout was once hailed as a revolutionary step forward in retail efficiency, offering customers a quicker way to check out while reducing the need for staff. However, recent concerns over security, increased theft, and the impersonal nature of the experience have led some retailers to reconsider their reliance on self-checkout systems. ↪Doing More with Less As staffing challenges continue to rise, retailers are finding themselves needing to do more with fewer employees. Retailers need to rethink scheduling, training, and multi-role positions while looking for best practices that help streamline operations. If you’re interested in joining this panel discussion, reach out to me! We’re looking for your experiences, insights, ideas, and/or other lessons you might be able to share to add to a lively, thought-provoking discussion #LearnMOHR #RetailTrends #Retail

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Target’s Earnings Dip: A Sign of the Shifting Retail Landscape Target's earnings report highlights the challenges retailers face in today's economic climate, according the the Morning Brew article. Target reported a 12% drop in profits to $854 million and a 1.9% decline in same-store revenue. Despite a 10.8% increase in online sales, overall comparable sales grew by just 0.3%, missing analyst expectations. CEO Brian Cornell attributed these results to reduced consumer spending on non-essential items and increased costs from supply chain adjustments. In contrast, competitors like Walmart have reported stronger performances, with Walmart's comparable sales growing by 5.3% last quarter. This situation emphasizes the importance of adaptability in retail. Retailers need to balance cost management with strategic investments in e-commerce and supply chain resilience to navigate economic uncertainties and shifting consumer behaviors. No easy feat for sure! #RetailTrends #Target #RetailSuccess #Measurement

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As we enter Q2 of 2024, I have been asked about key trends relative to the current strength of the consumer in the U.S. Despite headlines showing endless resiliency, we have seen some softness in purchasing behavior on the consumer front, especially in January and February, with a rebound since March.   Q1 also brought dynamic changes in the consumer goods sector's M&A landscape. Key highlights include:   Health Focus: Significant deals like Medbase's acquisition of Zur Rose Group reflect a growing emphasis on health and wellness. Luxury and Efficiency: Firms like Tapestry are strategically acquiring to enhance luxury portfolios and operational efficiency. Tech Integration: Investments in AI and digital capabilities are driving better consumer engagement and operational agility. Strategic Consolidations: Companies are optimizing their portfolios by focusing on core areas and divesting non-core assets. Global Investments: Cross-border M&A remains strong, targeting regions with high growth potential.   Despite economic uncertainties, these trends show the sector's resilience and strategic focus on long-term growth.   #ConsumerGoods #MnA #BusinessStrategy #HealthAndWellness #DigitalTransformation

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𝐑𝐞𝐭𝐚𝐢𝐥 𝐦𝐞𝐞𝐭𝐬 𝐫𝐞𝐚𝐥 𝐥𝐢𝐟𝐞... A recent RetailWire discussion ponders whether Walmart can take on Trader Joe's with its latest private brand launch, bettergoods. My take was that the brand seemed more Target-esque (shades of Good & Gather) and that it was about time Walmart upped the ante with a "better" private brand in grocery. This weekend, I headed to the freezer to grab my new favorite plant-based ice cream only to find I was out of it. Keep in mind that 1. I'm plant-based but wasn't always. I know the standards analogs need to meet. 2. I've been hitting this ice cream several times per week. It's rich, not too sweet, with a perfect consistency, even after days in the home freezer. 😋 I started backtracking to remember where I bought it. Was it Whole Foods? Fresh Market? I remembered the bright green packaging...very "Target" - that must be it (my more frequent jaunts to Target for plant-based goods still surprise me). I wasn't completely sure so I headed to the recycle bin. Mystery solved. It was - Walmart's "bettergoods" plant-based ice cream. 😯 Well played, Walmart. Well played! ✅ 👏

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I think the label "private brands" has been a misnomer for a while - they have as strong brand-building power as traditional "brands." Now consumers are choosing retailers because of the strength of PL brands, meaning retailers have even more power in trade. How can traditional CPG brands justify the price? Huge need for differentiated positioning, distinctive packaging, and outside-in innovation.

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"We thought, ‘We can do more with a lot less,’ and that didn’t work out for us.” On the back of #TerribleHorribleNoGoodVeryBad quarterly results, it's quite refreshing to hear Kohl's (outgoing) CEO speak so openly about the current state of the business and the decisions they / he made that did not work out. The full transcript (link in the comments) is worth a read. CEO Tom Kingsbury started with ... "Over the last several quarters, we have implemented a significant amount of change across our assortment, value strategies, and in-store experience. We believe these actions will make us more competitive over the long term. However, we undervalued the short-term impact this change could have on our sales performance." And then went into details on the three areas that drove performance: "a decline in traffic, especially early in the quarter, during the back-to-school season; a reduction in receipts in our private apparel brands, which impacted our ability to drive sales in our key value items; and categories where we have lost traction that represented opportunities for us going forward such as fine jewelry, petites and intimate apparel, and legacy home products." He didn't blame the macro environment or the weather, despite both playing a factor. Frankly, the only thing not addressed -- in the narrative nor in the Q&A -- was how to overcome the challenge of operating in the department store sector as a whole (for those not following closely, department stores have been in a 30-year decline). And yes, I imagine that knowing you're no longer in charge is part of why he was able to "own" the issues, effectively "cleaning the plate" for incoming CEO Ashley Buchanan. But still a welcome change from the "corporate speak" of most quarterly calls. https://lnkd.in/ez8PJ2t7

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On a jet plane on my way to NYC for #NRF! ✈️ I'd wager a billon dollars that: 😂 AI will be a hot topic 💻 Data will be cited as the #1 issue 👩‍💼 There will be only some who talk about the people side of the AI equation to get results 💰 That many will inflate their successes and down play slow adoption and expected ROI 💸 Reality is: retailers and brands are leaving significant revenue opportunities on the table by treating AI as a stair-step innovation instead of embracing its transformational potential. Similarly, vendors lack the change management resources necessary to drive sustainable adoption, despite their success depending on it, leaving them stuck. 🤔 Do you know of any retailers and/or vendors who are feeling this way? I'd love to connect with them at NRF to discuss how my services will help them achieve the results they seek. 🙏 Thank you to RetailWire for the opportunity to talk about what's not being talked about enough. 👇 Want to learn more about this topic and what I'm seeing in the industry?

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Retail's next big growth play is hiding in plain sight - right on store shelves. Coresight Research data shows that smart retailers are doubling down on in-store tech. As of Q2, about 50% have invested in solutions targeting: - Addressable out-of-stocks - Pricing and promo execution - Planogram compliance - Allocation and assortment optimization Over 80% of the remaining retailers plan to invest in these areas by Q2 2025. Nailing just ONE of these can boost sales up to 6% and operating margin by 5%. The future of retail is not just digital-first. It's data-first, store-centric, and powered by intelligent automation.

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