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Reasons to Read

On March 28, 2023, Coresight Research presented at Shoptalk 2023 on opportunities and challenges in luxury. In this presentation, we offer insights into luxury shopping trends in China, the US and developing nations.

Other relevant research:

China Consumer Tracker: Understanding Luxury Shoppers
All Coresight Research coverage of luxury retail
More insights from Shoptalk 2023, including Innovator Profiles and daily updates

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Reasons to Read

On March 28, 2023, Deborah Weinswig, CEO and Founder of Coresight Research, presented at Shoptalk 2023 on Web3 (sometimes styled Web 3 or Web 3.0) and the supply chain.

In this presentation, we explore the following:

Why Coresight Research is talking about intelligent, connected supply chains
Current supply chain challenges and limitations
The benefits of intelligent, connected supply chains
Our proprietary framework for Web3 supply chains
Why retailers are not yet considering Web3 supply chains
Supply chain solutions available today

We cover key topics including associate empowerment, blockchain, demand forecasting, digital twins, on-demand manufacturing and the last mile.

Other relevant research:

More insights from Shoptalk 2023, including Innovator Profiles and daily updates
All Coresight Research coverage of emerging technology and the supply chain
All our Retail-Tech Landscapes spotlighting innovators that are disrupting the retail industry

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Reasons to Read

The Coresight Research weekly US Consumer Tracker takes a regular temperature check on US consumers’ behaviors and sentiment, based on exclusive proprietary survey data.

In this report, we present findings from our survey conducted on March 20, 2023.

Data in this report are our latest proprietary survey findings and four-week changes for:

Which retailers consumers have bought food and nonfood products from in the last two weeks
Avoidance of public places, by type of public place
Activities that consumers have done in the past two weeks
What products consumers have bought in-store and online in the last two weeks

Companies mentioned in this report include: Aldi, Amazon, Albertsons, Ahold Delhaize, Costco, Dollar General, Dollar Tree/Family Dollar, Kohl’s, Kroger, Macy’s, Target, Walmart

Other relevant research:

Read the full series of US Consumer Tracker reports

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Executive Summary

Introduction

Coresight Research is a research partner of Shoptalk 2023, which is taking place March 26–29 in Las Vegas, 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 day two of Shoptalk 2023.

Shoptalk 2023 Day Two: Coresight Research Insights

Shopper Engagement: The Future of Livestreaming and Customer Loyalty

With more brands, products and marketing noise than ever, retailers must provide unique and immersive shopping experiences to capture consumers’ attention and wallets. Various sessions on the second day of Shoptalk 2023 covered the importance of starting initiatives that improve shopper engagement, especially via livestreaming and loyalty programs.

Many companies are discovering how well they can connect with their existing customers—as well as new ones—through shoppable livestreams. In 2023, Coresight Research expects to see the US livestreaming e-commerce market grow to nearly $32 billion, up from just over $20 billion in 2022, due to key trends such as companies using multiple platforms and consumer demand for product transparency. Much of Shoptalk’s “Forefront of Livestreaming and Shoppable Video” session focused on the potential growth of the livestreaming market over the next few years. Per the session, in 2024, US consumers are expected to spend more time watching digital video than their televisions, making it a premier channel for companies. Livestreaming is also far more personal than many other marketing and communication methods, enabling brands to create personalized experiences that drive shopper engagement and sales, while also allowing customers to immerse themselves in the brand.

During the panel, Andrea Moore, Chief Digital Officer at NEST New York, explained what companies should do if they wish to enter the livestreaming space—most importantly, diving in instead of waiting for everything to be perfect. Constant innovation, customer feedback, and trial and error are all critical in determining how livestreaming will fit into a brand’s storytelling and its overall process.

“Forefront of Livestreaming and Shoppable Video” session (left to right): Soumya Sriraman, President of Streaming, Qurate Retail Group; Andrea Moore, Chief Digital Officer, NEST New York; Kevin Miller, Chief Marketing Officer, The Fresh Market; and Kendra Bracken-Ferguson, Founder and CEO, BrainTrust
Source: Coresight Research

Another topic of frequent discussion during the second day of Shoptalk 2023 was how loyalty programs can enhance shopper engagement. Online shopping has made it easier for consumers to compare and try different brands and retailers. This comes at a time when customer acquisition costs (CAC) are rising, putting extra pressure on brands and retailers to extract value from their existing customers by increasing customer loyalty.

In the keynote session, “Innovative Approaches to Customer Loyalty,” topics covered ranged from how to personalize loyalty programs to using gamification and rewards to boost program engagement. For those looking to personalize their loyalty programs, panel members recommended that companies first look at what first-party data tells them about their customers’ habits. For instance, Kent Zimmerman, VP of E-Commerce and Marketing Technology at Shoe Carnival, discussed how the company focuses its promotions on customers who react well to those offers. However, the company does not think all promotions must be sent to all customers, helping it maintain better margins.

“Innovative Approaches to Customer Loyalty” session (left to right): Jenny Wolski, SVP, Omnichannel Experience, Petco; Art Sebastian, VP, Omni-Channel Marketing, Casey’s; Zimmerman; Lokesh Ohri, Partner, EY
Source: Coresight Research

All panel members agreed that gamification remains a powerful tool for loyalty programs of all types but that companies need to keep things fresh—simply reusing the same gamification models again and again will not work for modern consumers. Instead, companies should find ways to keep loyalty program games and rewards exciting, such as theming games seasonally or making them more challenging over time. In the coming years, Coresight Research expects more brands and retailers to turn to technology to increase customer loyalty and engage with consumers in new ways, including experiential rewards and non-fungible tokens (NFTs). We believe that the metaverse and NFTs will provide a considerable opportunity to enhance loyalty among consumers, especially Gen Zers.

Read our Retail-Tech Landscape to view selected startups globally that offer innovative solutions for brands’ and retailers’ customer loyalty programs, covering gamification, personalization, blockchain and more.

Emerging Channels: Global Retail in 2023

In the current uncertain macroeconomic environment, retailers can turn to new and emerging channels to drive alternative revenue streams. The most significant disruptions of 2022—including the Russia-Ukraine war, the European energy crisis and talent shortages—snowballed and have rolled into 2023. While overall US inflation is moderating, prices remain high in several everyday retail categories, including food and household products, which both remain up by double-digit percentages (as of February 2023). This year, companies need new strategies to successfully navigate the global retail landscape in 2023.

During the “New Insights on Global Retail Trends” session, Kelsey Robinson, Senior Partner at McKinsey & Company, took a deep dive into the current macroeconomic environment and how it is impacting the global fashion industry. She explained that it is a time of change for the fashion industry, as consumers’ preferences and behaviors are shifting rapidly, including trading down. In response, the entire fashion system is changing; in particular, Robinson stated that many fashion companies are likely to overhaul both their digital marketing efforts and their organizational structure (see more coverage of this trend at Shoptalk 2023 in the “Organizational Changes” section below).

Robinson during the “New Insights on Global Retail Trends” session
Source: Coresight Research

In the same session, Lee Ballin, Managing Director of Environmental, Social and Corporate Governance (ESG) and Sustainability Services at Deloitte, discussed how consumers’ growing demand for transparency and sustainable offerings impacts the retail industry. Putting it simply, he stated, “ESG risks are business risks… Corporate social responsibility should be corporate social opportunity.”

For companies looking to drive their sustainability initiatives, the panel went through four key ideas that can help spur environmental change company-wide:

A company cannot manage what it does not measure and track. To begin hitting ESG goals, companies must be measuring and tracking.
Sustainability regulations are real and enforced; companies must follow them.
Everyone in the company has a role to play in regard to sustainability.
Value chains drive accountability, making them a crucial part of any sustainability initiative.

For companies searching for more ways to make their organizations more environmentally friendly, Coresight Research developed the EnCORE framework to help brands and retailers frame their approach to sustainability. The framework comprises five components, including environmental engagement and circular models.

For some companies, emerging channels might simply mean retail avenues they have never considered before. As part of the “How Content and Technology Are Transforming Retail” keynote, Jeffrey Katzenberg, Co-Founder and Former CEO of DreamWorks Animation and current Managing Partner at WndrCo, discussed the immense retail opportunity for media companies. He spoke from experience, explaining how Disney and DreamWorks movies have “multiple lives” by living on through retail products associated with the original media, such as memorabilia or toys. He stated that storytellers of all types should look for opportunities to expand their products’ stories.

Katzenberg discusses how media companies can utilize the retail channel
Source: Shoptalk

Store Experience: Reimagined Spaces

After experiencing the convenience and other benefits of online shopping over the past couple of years, consumers’ expectations around the in-store shopping experience are more demanding than ever. Now, consumers want a streamlined, personalized and technology-enhanced shopping experience, a topic covered in great detail in the keynote session, “Transforming the Store Workforce with New Roles and Capabilities.” Throughout the panel, participants discussed how organizations must rethink both their store experience and the technologies and capabilities that enable store associates to create that unique experience.

According to Marc Mastronardi, Chief Stores Officer at Macy’s, physical stores exist to fill four needs: discovery, convenience, service and engagement. To do this effectively, Macy’s relies on its store team members, which must be much more than engaging. To help customers discover new products, team members must know a store’s inventory (or at least how to search it quickly), a task made easier by radio-frequency identification (RFID) technology, another popular topic of conversation during the session. Well-equipped team members can also easily help any customer quickly, boosting convenience. Finally, Macy’s has also turned its stores into “return hubs,” where customers engage with a person when making a free, in-store return.

Mastronardi at the “Transforming the Store Workforce with New Roles and Capabilities” session
Source: Coresight Research

Similarly, at the “Providing Inspiration and Ease: Balancing Store Design Imperatives” session, all three speakers—Eric Ryan, Co-Founder and CEO of Cast Jewelry; Lisa Bubbers, Co-Founder and Chief Brand Officer of Studs; and Yehuda Shmidman, Chairman and CEO of WHP Global and Toys “R” Us—discussed the importance of reimaging the store experience. By reimagining their stores, companies can find new audiences, bring creativity to stores, use smaller spaces and leverage exclusive partnerships and in-store experiences to drive sales. Ryan challenged companies to look to create an “everlasting gobstopper,” turning their stores into “forever destinations.”

The conversation on new and improved store experiences continued in the keynote session, “A Global Perspective on the Evolving Role of Stores,” later in the afternoon. Once again, panel members asked companies to rethink and reimagine their stores. While stores once served a singular purpose—retail—they now serve many, including bringing a brand to life in the real world. However, companies need to think about more than just how they can change their already open stores. Organizations should also devise new stores that provide new experiences and meet consumer demand. For example, Tolga Öncü, Retail Operations Manager (COO) at Ingka Group (IKEA Retail), discussed how IKEA is rolling out smaller-format stores, which are meant to complement the company’s flagship locations and answer consumer demand for IKEA stores closer to their homes.

Öncü (left) and Joe Laszlo, VP Content, Shoptalk (right), discuss IKEA’s smaller-format stores
Source: Coresight Research

In 2023 and beyond, Coresight Research believes that retailers and brands must execute a comprehensive, consumer-centric brand strategy across all consumer touchpoints—physical and digital—bringing in new audiences and keeping customers coming back. From dressing rooms and in-person checkout areas to social media apps and branded websites, all touchpoints must build the brand, amplify brand messaging and create an engaging, immersive and omnichannel shopping experience.

Technology: Personalization Rules

In the face of brisk economic headwinds, strong technology investment plans will be crucial in reducing inefficiencies and driving growth. Many of the panels during Shoptalk 2023’s second day focused on various emerging technologies, namely artificial intelligence (AI) and data and personalization technologies.

At the “Data and Personalization Technologies” session—a standing-room-only panel, revealing this particular topic’s immense popularity with Shoptalk 2023 attendees—panel members covered how companies can provide personalization options in a brand-friendly way. According to Carrie Tharp, VP of Retail and Consumer at Google Cloud, data analysis shows that consumers want personalization; however, it also shows that it is easy for a company to “creep out” potential customers by asking for too much data. Companies need to research and test what personalization options will work for their identities and customers. “There is no such thing as too much personalization,” Tharp explained. “Just personalization done wrong.”

In the same session, the panel discussed what questions brands and retailers should ask themselves when implementing AI into their processes. First, companies should ask what role AI will play in the organization and whether the AI will be on “auto-pilot,” where it works alone, or “co-pilot,” where it works alongside a human. Next, companies must determine ways to ensure AI follows their brand, business and safety protocols. Finally, companies need to ask themselves how they will track and learn from AI missteps, allowing them to adjust processes and systems, making them better.

Once these challenges are navigated, all panel members agreed that AI can play a pivotal role in a company, especially concerning personalization. Assaf Baciu, Co-Founder and COO of Persado, stated, “Motivation AI marries data from the brand experience and gives consumers a personalized language experience specific to an individual, something which ChatGPT or Bard cannot do.” Persado defines “Motivation AI” as a specialized segment of natural language generation that creates personalized messages designed to motivate the customer to act.

“Data and Personalization Technologies” session (eft to right): Puneet Mehta, Founder and CEO, Netomi; Baciu of Persado; Jen Glaspie-Lundstrom, Co-Founder and CEO, Tandym; and Adam Pressman, Partner and Managing Director, AlixPartners
Source: Coresight Research

In various other sessions, many companies—including retail giants such as Kroger and Lowe’s—discussed how AI helps train associates quicker, while freeing already-skilled team members up to do more meaningful tasks. AI was also the main topic of discussion at the “Unlocking the Future of Marketing with AI” keynote at Shoptalk’s Majestic Theater. There, Sean Downey, President of Americas and Global Partners at Google, spoke about Google’s AI developments since it became involved with the technology in 2016. Downey mentioned that, while there is a lot of excitement surrounding generative AI, there are also many less-talked-about AI tools that can help companies complete a variety of tasks, including driving growth and providing entertainment to customers.

Downey discusses AI
Source: Shoptalk

These are just some of the sessions that initiated conversations around AI, which certainly took center stage on day two of Shoptalk 2023, dominating many conversations. AI was also one of the main focus areas for companies in the Shoptalk 2023 “Shark Reef” startup pitch competition—moderated by Deborah Weinswig, CEO and Founder of Coresight Research. Read our separate report for more on the competition and the startups involved.

How to leverage data to empower companies was another popular topic during the sessions on day two. At the “Leveraging Data Effectively Throughout the Organization” session, Brendan Witcher, VP and Principal Analyst at Forrester, interviewed Alan Boehme, Chief Technology Officer at H&M, about the role of data at the company. Throughout the conversation, Boehme covered how each part of the company’s process, from its supply chain through to final sale, leverages data and how it builds teams to leverage that data. Specifically, H&M hires team members who are “open to where the data will take them.” Boehme also stated that almost every brand and retailer, including H&M, is competing with lifestyle giants, such as Apple, Pinterest and Spotify. These companies not only have a wealth of data on consumers thanks to their place in daily life, but they have also trained their teams to use data effectively and efficiently.

Organizational Changes: Improving the Employee Experience

Making structural and organizational changes is crucial for retailers to remain competitive in an uncertain and challenging macroeconomic environment. They can also help create a better employee experience, ensuring less turn over a time in which labor shortages loom large—this was a major theme during many of the sessions on day two of Shoptalk 2023.

During the “Leveraging AI and Automation to Enhance Operations” session, Alexis DePree, Chief Supply Chain Officer at Nordstrom, and George Hanson, SVP and Chief Digital Officer at Panera Bread, both discussed how they are bettering their employee experiences. Specifically, DePree and Hanson spoke to the impact of automation on employee experiences, which has allowed the companies to reduce “micro-friction” while their employees are freed up to do more fulfilling work.

At Panera, the company is testing Amazon One hand scanners. These scanners reduce the time it takes employees to look up information, reducing frustration and enabling employees to focus on more important tasks. Hanson also covered how Panera has released an opt-in geolocation feature on its app, which enables local teams to see what customers are closest and optimize production and delivery times.
DePree discussed how automation has changed Nordstrom’s value chain, which is key, as the brand is about “discovery” and access to the best brands. Looking forward, the company sees many applications for AI and automation, including helping it better understand customers’ shopping patterns and discover exciting brands that resonate with its base. There are also many opportunities for automation in the company’s supply chain, powering its teams to do more rewarding work.

The “Leveraging AI and Automation to Enhance Operations” session (left to right): Depree; Hanson; Gerry Hough, Partner, McKinsey & Company
Source: Coresight Research

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Reasons to Read

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Reasons to Read

On March 26, 2023, Coresight Research hosted the “Shark Reef” Startup Pitch at Shoptalk 2023, which saw 12 early-stage retail-technology innovators compete to win the Judges’ Choice and Audience Choice awards.

Coresight Research is an official research partner of Shoptalk 2023.

In this presentation, we outline the following:

Startup Pitch history—past winners
Event format, comprising two rounds
Judging panel, led by Deborah Weinswig, CEO and Founder of Coresight Research
Startup selection criteria
The 12 participating innovators across four areas of retail disruption
Choosing the winners—how to vote and things to consider when voting

The 12 speakers and four judges that participated in the Shark Reef pitch competition at Shoptalk 2023
Source: Coresight Research

Other relevant research:

Read highlights from the Startup Pitch event and find out which companies won in our recap report
You download an Innovator Profile for each company here.
All Coresight Research coverage of emerging technology
Visit the Coresight Research Retail Technology Hub to explore reports, data and competitive landscapes on technology.

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The Coresight Research biweekly China Consumer Tracker takes a regular temperature check on Chinese consumers’ behaviors and sentiment, based on exclusive proprietary survey data.

In this report, we present findings from our survey conducted on March 13, 2023.

Data in this report are:

Beauty consumers’ purchase frequency, spending, channels and brand choices, by gender
Avoidance of public places, by type of public place—latest data and two-week PPT changes
Activities that consumers have done in the past two weeks
What products consumers have bought in-store and online in the last two weeks
Expectations for economic conditions and personal finances in the next 12 months

Other relevant research:

Read the full series of China Consumer Tracker reports
China Consumer Tracker Preview: Early Data on Shopper Behavior and Sentiment
Key Festivals and Holidays for Promotional Campaigns in China in 2023: Calendar
Retail 2023: 10 Trends in China E-Commerce

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Using data from the Office for National Statistics, we analyze UK retail sales in February 2023, in total and by sector.

Data in this report are:

Year-over-year changes in UK total retail sales (excluding automotive fuel) for the past 13 months
Year-over-year changes in retail sales by sector, December 2022–February 2023
Year-over-year changes in online retail sales for the past 13 months

Other relevant research:

Our monthly reports keep you up to date on retail sales (in total and by sector) and key consumer indicators, focusing on China, the UK and the US.

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Reasons to Read

Executive Summary

Introduction

Coresight Research is a research partner of Shoptalk 2023, which is taking place during March 26–29 in Las Vegas, US. The annual retail conference focuses on the trends, business models and technologies that are shaping the future of retail.

We present key insights from the first day of Shoptalk 2023.

Shoptalk 2023 Day One: Coresight Research Insights

Shopper Engagement: Making Shopping Engaging and Joyful

Today, more companies are fighting for consumers’ attention than ever, meaning that brands and retailers must provide their customers with engaging shopping experiences that capture both their attention and their wallets. At the “Rediscovering the Joy of Shopping” session, panel members discussed how it is more important than ever to keep customers engaged through every point of the shopping journey. While, for e-commerce, the past decade has been about seamless buying, the next 20 years will be about using channels and technology that make online shopping as “joyful” and engaging as in-person shopping.

To better engage with consumers, e-commerce platform Verishop built a premium retail media network (RMN), as Imran Khan, the Co-Founder and CEO of Verishop, discussed in the “Powering Brand Discovery through Transformative Shopping Experiences” session. RMNs provide brands with highly personalized targeting capabilities and an effective way to measure their advertising return on investment (ROI) and SKU (stock keeping unit) level. The desire to monetize shopper data and increase profit margins has driven many retailers to build their own RMNs or enter strategic partnerships with technology providers to set up RMNs, and we expect more to follow suit in 2023 and beyond.

The next 20 years will also be about responding to consumers’ rapidly changing needs, which can only be done through engagement and listening. At the “The C-Suite on Thriving in Today’s Retail Environment” session, Michael Fiddelke, CFO at Target, stated that responding to consumers’ needs and concerns is critical to formulating long-term investments and objectives for brands and retailers. Even if the economics of an initiative is not economically favorable—Fiddelke explained that Drive Up returns at Target initially did not seem economically feasible—it will be worth it in the long run if that initiative favors a particular consumer behavior and causes them to spend more at the store.

Fiddelke (left) discussing shopper engagement with Krystina Gustafson, SVP of Content at Shoptalk  (right)
Source: Coresight Research

Emerging Channels: Data Analysis Is Key

In the current uncertain macroeconomic environment, retailers can turn to new and emerging channels to drive alternative revenue streams and engage with new audiences.

One emerging channel discussed at multiple sessions on the first day of Shoptalk 2023 is livestreaming. Livestreaming e-commerce offers a significant opportunity for retailers to drive consumer engagement and conversion. Coresight Research expects the US livestreaming market to triple in size from 2021 to 2023, totaling $31.7 billion. This pales in comparison to China’s livestreaming market, which was valued at $512.0 billion in 2022, revealing the significant growth opportunity in the US market. Key trends we believe will drive future growth in the livestreaming market include multichannel streaming, incentives and special offers during streams, expansion into new retail verticals and the creation of online communities via livestreaming.

At Shoptalk, Khan talked with Joe Laszlo, VP of Content at Shoptalk, about the impact of livestreaming: livestreaming and shoppable video improve conversion rates by 42%, because they resonate well with shoppers, per the “Powering Brand Discovery through Transformative Shopping Experiences” panel.

Another emerging channel that many retailers are interested in is the US secondhand market. During the “Resale, Upcycled Products and the Circular Economy” session, Anthony Marino, President of ThredUP, an online consignment and thrift store, stated that 50%–60% of “younger consumers want to buy secondhand when shopping.” Additionally, Marino stated, “Increasingly, brands are asking: ‘Can you help us define a resale strategy?’”

We are seeing signs of growing consumer demand for resale, especially fashion resale offerings. Coresight Research believes that the fashion resale trend will continue to grow alongside consumers’ increasing awareness of sustainability and demand for pre-owned luxury. We expect the fashion resale market to continue its current momentum through 2023 and 2024, with year-over-year growth of 14.6% and 13.0%, respectively, in each year, for a $36.4 billion market by the end of 2024.

Marino (left) talking about the circular economy with Jeannette Neumann, Reporter at Bloomberg News (right)
Source: Coresight Research

When embracing emerging channels, data analysis is the key to removing customer friction, regardless of the sales channel. For instance, at the “Building an Omnichannel Organization” session, Seemantini Godbole, EVP, Chief Digital and Information Officer at Lowe’s, discussed how AI (artificial intelligence)-powered data analysis enabled the company to improve sales trends, make strategic changes to increase sales and reduce friction for customers, across all channels. Without detailed data and trend analysis—something AI is allowing more companies to do—brands and retailers will remain in the dark about which emerging channels they should enter and if their strategies to do so are working.

Godbole (left) and Sarah Engel, the President of January Digital (right)
Source: Coresight Research

Store Experience: Innovation Leads the Way

After experiencing the convenience and benefits of online shopping over the past couple of years, consumers’ expectations around the in-store shopping experience are more demanding.

During the “Using Customer Data to Surprise and Delight” session, panel participants discussed the role of data in creating an enjoyable in-store experience. Manju Thomas, SVP of Engineering at Data Science at Stitch Fix, discussed the importance of creating moments that connect and resonate with customers. At Stitch Fix, the company has an 80-data-point style quiz that provides the company with its customers’ unique wants and needs, helping it match the client with the best product for them. Today, over 1 million people take the test monthly, according to Thomas. The test also enables Stitch Fix to determine what styles are trending and pick up on any “nuances in style,” allowing it to create a store experience that fits its customers’ desires.

In the same session, Caleb Pearson, VP of Media and Digital for US Marketing at McDonald’s, discussed the importance of always innovating the store experience. McDonald’s strives to retain and respect its “cultural icon” status. To do so, it remains true to the principle it was founded on: people first and innovation second. According to Pearson, rich customer data are the key to innovation and creating a unique store experience—a theme we heard throughout the first day of Shoptalk 2023.

From left to right: Charles Gorra, Founder and CEO of Rebag; Pearson; Thomas; Kelly Pedersen, Partner, US Retail Leader, PwC
Source: Coresight Research

Technology: AI Is Here To Stay

In the face of brisk headwinds, strong technology investment plans will be crucial in reducing inefficiencies and driving growth. Additionally, these investment plans must include allocations for developing or using AI-backed tools. In the Shoptalk 2023 “Shark Reef” startup pitch competition—moderated by Deborah Weinswig, CEO and Founder of Coresight Research—many of the participating innovators focused on how AI could help companies and consumers in various ways, including enabling more personalized offerings and better customer communication.

Read our companion report for more on the Shoptalk 2023 “Shark Reef” startup pitch competition.

However, companies need to be engaged with adopting AI technology. In the “Rediscovering the Joy of Shopping” panel, Bill Ready, CEO of Pinterest, commented that AI needs high-quality signals and inputs to work correctly, which typically requires a large data set. Pinterest’s 450 million users are constantly making associations between products on their “boards,” meaning its AI is fed very “powerful and accurate” signals. As a result, Pinterest has boosted relevancy scores (the rate at which a user marks a recommendation as relevant) to over 95%.

One thing was clear during the first day of Shoptalk 2023: AI is here to stay. Moving forward, brands and retailers must begin utilizing AI-backed technology to see growth, analyze data faster, save time and better engage with consumers.

Ready discusses the importance of high-quality signals for effective AI in personalization.
Source: Coresight Research

Organizational Changes: Hybrid and Remote Work Modes Bring Changes

Making structural and organizational changes is crucial for retailers to remain competitive in an uncertain and challenging macroeconomic environment. Today, companies are learning that how they bring teams together truly matters and that leaders need to listen—especially as many teams are now spread across the world and various work modes.

In the “Creating and Maintaining a Culture of Excellence” session, Sarah Engel, President of January Digital, asked the panel how their companies now approach hiring:

Samir Desai, Chief Digital and Technology Officer at Abercrombie & Fitch Co., stated that the company is focused on bringing on people with different skill sets than it had previously, helping it build agility without partnering with other companies.
Lisa Collier, Chief Product Officer of Under Armour, commented that the company had eased back on its educational guidelines, helping it attract both more creative voices and generalists who can play a variety of roles.

All agreed that retailer leads must begin hiring team members from diverse backgrounds and invest in upskilling and reskilling programs.

In the same session, the panel also discussed how retailers should change their organizational approaches in response to the rise of hybrid and remote work modes. Desai explained that, while annual—or more frequent—meetups are important for remote workers, the meetups must have a reason for existing. They must be unique meetups with a specific intent, he explained. Parth Raval, Chief Growth Officer at PepsiCo Foods North America, agreed, stating that meetups need a clear purpose, whether that is collaboration, communication, education or celebration.

From left to right: Desai, Collier, Raval and Engel
Source: Coresight Research

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Reasons to Read

Executive Summary

Introduction

On March 26, 2023, Coresight Research hosted the “Shark Reef” startup pitch competition at the convention Center’s Beacon Theater, which saw 12 early-stage US retail-technology innovators compete to win the Judges’ Choice and Audience Choice awards. We provide a recap of the pitch competition, with key insights from the startup presentations.

Shoptalk 2023—“Shark Reef” Startup Pitch Competition: Coresight Research Insights

Event Format and Judging Panel

The Shoptalk 2023 “Shark Reef” startup pitch competition was comprised of two rounds:

Round 1—All competitors presented for three minutes on their innovative technologies.
Round 2—Six finalists participated in a more in-depth, four-minute Q&A session.

Deborah Weinswig, CEO and Founder of Coresight Research, moderated the competition and participated as a member of the judging panel. Three expert judges joined Weinswig:

Anna Barber, Partner at M13
Brooke Kiley, Partner at VMG Partners
Matt Nichols, General Partner at Commerce Ventures

The judging panel: (left to right): Weinswig, Kiley, Nichols and Barber
Source: Coresight Research

Innovative Solutions Across Four Areas of Retail Disruption

Coresight Research categorizes the 12 startups into four areas of disruption in retail, as defined below.

1. New Ways To Engage Consumers

Retailers are increasing their degree of engagement with consumers via messages on social media platforms, providing inclusive imagery, enabling price negotiation and using clienteling to cater to key customers.

Companies: Drop, GoCharlie, Nibble, Reflekt Me

2. Innovative Video Applications

Video is becoming a primary communication channel, particularly with certain demographics. Innovators are helping retailers and brands improve the quality of video and storytelling and offer customer service via video.

Companies: Gander, Hark, Tolstoy

3. Next-Generation Business Needs

Retailers and brands have a major stake in ensuring customers receive products that ensure their loyalty and meet their sustainability standards.

Companies: IN BOLD PRINT, Toki

4. Optimizing Operations: Payments and Supply Chains

Demand planning is a critical step that drives inventory, sales and returns, which, in turn, enables efficient logistics. Offering various payment methods, including biometrics, reduces friction and increases conversion.

Companies: Frate, Syrup, Wink

The Winners

The six finalists that made it to the second round were Drop, Gander, Hark, ReflektMe, Syrup and Wink. Of these six, the expert panel of judges selected the Judges’ Choice winner as Drop, which won a $100,000 investment from Commerce Ventures, an early-stage venture capital firm. Meanwhile, the audience voted for the Audience Choice winner, Syrup.

Left to right: Kiley, Weinswig, James Theuerkauf (from Syrup), Benjamin Benichou (from Drop), Nichols and Barber
Source: Coresight Research

The Competing Innovators: Pitch Highlights

Below, we detail highlights from each of the innovators’ presentations, in alphabetical order.

The 12 speakers and four judges that participated in the Shark Reef pitch competition at Shoptalk 2023
Source: Coresight Research

Drop

Speaker: Benjamin Benichou, Co-Founder and CEO
Area of disruption: New Ways To Engage Consumers
Read the full Innovator Profile for Drop

Founded in 2020, Drop is a social commerce platform that enables enterprise brands and retailers to engage with and sell products to their Meta and Instagram followers directly, at scale, providing opportunities to increase revenue from organic and paid social initiatives.

As Benichou stated at the beginning of his presentation: “we now live in a social world.” More than 80% of the world’s web traffic is through social media channels, as opposed to the 17% that occurs through web browsers. At the same time, the cost of driving traffic and acquiring customers through a branded website has reached an all-time high, while e-commerce conversion is low, Benichou said. Brands need to rethink how to attract their social media followers to their website.

How the Drop platform works
Source: Drop

Benichou explained that Drop leverages AI (artificial intelligence) to enable brands to personalize their tone of conversation, creating conversations that resonate with the brand’s unique identity. Using AI also means that brands can easily and quickly adjust their tone, providing flexibility to experiment and adapt and maximizing the effectiveness of their engagements. Currently, Drop’s clients include Asics, Decathlon, Dentsu, Havas Media and Hot Topic.

Benichou presents on the future of Drop
Source: Coresight Research

Frate

Speaker: Bailey Newton, Founder and CEO
Area of disruption: Optimizing Operations: Payments and Supply Chains
Read the full Innovator Profile for Frate

Founded in 2022, Frate provides returns management software for “peer-to-peer returns.” Frate’s solution incentivizes consumers to hold onto items they wish to return while the retailer re-lists them at a discounted price. If the item is re-sold within a certain period, consumers “return” the item directly to the next buyer—what the company calls an “EcoDrop.” Additionally, the platform tries to find a local buyer versus shipping to a warehouse or across the country.

Newton discusses Frate’s returns management software
Source: Coresight Research

During his presentation, Newton emphasized the negative impacts of retail returns on both profitability and the environment, including that, in 2022, $816 billion in goods were returned, 16 million tons of carbon dioxide (CO2) were emitted from return shipping trips and six billion pounds of returned goods ended up in landfills. Newton explained that these impacts are driven by the inefficient, status-quo returns process.

Frate’s solution tackles these impacts: peer-to-peer returns enable retailers to save on shipping labels, warehousing costs, liquidation and more, while also decreasing CO2 emissions from shipping trips and reducing packaging and landfill waste. According to the company, retailers that leverage the Frate platform see a 23% increase in profit retention and a 34% decrease in shipping emissions per return, on average (see image below).

The impacts of the Frate platform
Source: Frate

Gander

Speaker: Kimiloluwa Fafowora, Founder and CEO
Area of disruption: Innovative Video Applications
Read the full Innovator Profile for Gander

Gander helps give shoppers what they need to reach a purchase decision. Founded in 2021, the company has developed an end-to-end solution that enables brands to easily create and embed quality video user-generated content (UGC) on their websites, driving sales, engagement and conversion. Gander can handle the entire UGC production process, including sourcing content creators, developing content narratives, video editing and production, and licensing. The company also uses high-quality content delivery networks (CDNs) to improve network speed.

Fafowora explained that when online shoppers browse product pages on retail websites, they often turn to social media platforms such as Instagram, Pinterest, TikTok and YouTube to discover more about the products and see them in use. However, after navigating away from a retailer’s site, these shoppers often do not return to make a purchase. Therefore, there is a gap between where consumers find the content they need versus where they make their final purchase. Gander aims to bridge this gap by putting brands’ content in the right context, according to Fafowora.

How Gander helps consumers
Source: Gander

In the fourth quarter of 2022, Gander achieved a 23% conversion-rate lift and influenced $10.4 million in sales, according to the company. Gander’s clients include beauty and skincare brands Black Opal (BLK/OPL), Eadem, Huron and Tower 28.

Fafowora discusses Gander’s end-to-end solution
Source: Coresight Research

GoCharlie

Speaker: Brennan Woodruff, Co-Founder and COO
Area of disruption: New Ways to Engage Consumers

Founded in 2021, GoCharlie is a multimodal, generative AI company that uses a proprietary AI-powered engine to help brands and retailers create engaging marketing content. Its “Campaign in a Click” product allows content creators to use various inputs—including websites, audio and video files, or text content—to generate a campaign’s worth of content tailored to individual platforms, including Facebook, Instagram, LinkedIn and Twitter.

Woodruff explores the role of AI in marketing and GoCharlie
Source: Coresight Research

Per Woodruff, “we live in a generative AI world.” AI enables brands to thrive and grow, while providing personalized customer interactions and rapid ideation, among other benefits. With GoCharlie, marketing teams can turn ideas into marketing campaigns that both match a brand’s voice and drive consumer engagement. GoCharlie can also help companies repurpose previously created content, saving companies’ time and “revitalizing existing content libraries.”

Hark

Speaker: Fran Brzyski, Founder and CEO
Area of disruption: Innovative Video Applications
Read the full Innovator Profile for Hark

Founded in 2022, Hark is a customer experience (CX) platform that offers a unique post-purchase interaction experience for customers and service teams. The platform leverages video and audio prompts to allow customers to showcase and explain their issues to companies before interacting with a live agent. With its AI technology, Hark packages relevant details into a “perfect ticket” delivered to service teams via Help Desk integration.

Hark’s CX process
Source: Hark

During his presentation, Brzyski shared success metrics that Hark has achieved with its customers, including a 43% decrease in cost per ticket, a 21% decrease in ticket-reopen rate, a 25% increase in customer satisfaction rating and a 26% increase in one-touch resolution. He also highlighted that Hark offers a “feedback loop with context,” providing advanced reporting and analytics to its clients’ product, marketing and executive teams.

Brzyski emphasized that “customer service is a revenue generator,” so it is a critical operational area for brands to improve profitability by leveraging technology.

Brzyski presents on the future of CX and the role Hark will play
Source: Coresight Research

IN BOLD PRINT.

Speaker: Cierra Valor, Co-Founder and CEO
Area of disruption: Ensuring Product Quality and Sustainability
Read the full Innovator Profile for IN BOLD PRINT.

IN BOLD PRINT. is a technology company that provides a cloud-based platform to help consumer brands work toward sustainability goals by measuring carbon emissions and improving environmental, social and corporate governance (ESG) reporting from the platform’s central, interactive dashboard.

Valor discussed the challenges for retailers in knowing and sharing their climate impact—namely, that consultants are expensive, emissions data are complicated and employees are busy. IN BOLD PRINT. helps consumer brands understand, track and optimize their carbon footprint to become more environmentally sustainable. Valor described IN BOLD PRINT. as “the only data-focused carbon emissions platform built for the consumer good industry.” She also called it the “TurboTax of carbon accounting.”

Valor explains how IN BOLD PRINT. helps brands track their carbon footprint
Source: Coresight Research

The cloud-based platform aggregates Scope 1, 2 and 3 carbon emission data across a retailer’s operation—as well as its vendors’ operations—through an interactive dashboard. It also allows for data downloads and offers services such as data preparation to track goals and action plan creation.

Valor explained that IN BOLD PRINT. helps its clients answer their customers’ demand for transparency, which can drive sales and loyalty: she highlighted that 94% of consumers would be loyal to a brand that offers transparency (per Label Insight). Meanwhile, detailed ESG metrics also allow companies to determine how to earn the best return on investment, pleasing stakeholders, per the presentation.

The IN BOLD PRINT. dashboard increases transparency and clarity around carbon emissions
Source: IN BOLD PRINT.

Nibble

Speaker: Rosie Bailey, Co-Founder and CEO
Area of disruption: New Ways To Engage Consumers
Read the full Innovator Profile for Nibble

Founded in 2020, Nibble is an AI chatbot for e-commerce retailers that lets customers negotiate personalized prices on desired products or services. Through an automated and entertaining chat experience, Nibble aims to preserve margins and improve conversion rates and customer engagement.

Nibble’s position in the customer journey
Source: Nibble

According to Bailey, Nibble is the first chatbot that can negotiate on a company’s e-commerce site, allowing customers to negotiate for a lower price. Bailey explained that brands and retailers that use Nibble see a 50% increase in average order value (AOV) at modest discounts of below 10%. On the other hand, resellers that use Nibble see a £10.00 ($12.24) average profit increase on their items sold through the chatbot. The chatbot can also help companies clear excess inventory while doing so in a brand-appropriate manner, resulting in a 27% average margin increase for products sold through Nibble.

As AI and chatbots are here to stay, Bailey stated that companies should use them to see “sustainable, profitable growth and real consumer engagement.”

Bailey discusses how Nibble works
Source: Coresight Research

Reflekt Me

Speaker: Tope Mitchell, Co-Founder and CEO
Area of disruption: New Ways To Engage Consumers
Read the full Innovator Profile for Reflekt Me

Founded in 2018, Reflekt Me aims to help brands and retailers make the online shopping experience more inclusive. Its business-to-business (B2B), software-as-a-service (SaaS) platform enables retailers to provide personalized product images featuring “real people,” with different skin tones and body types, on a product’s landing page. These product images resonate with shoppers and enable them to better understand product size and fit, driving consumer confidence in their purchase decisions.

Mitchell covers how inclusive retailing impacts consumers and companies.
Source: Coresight Research

Mitchell stated that “online retail has an image problem,” where product marketing images do not reflect real people. For example, she cited that over 70% of women are size 14 or above, but just 2% of photos used across the e-commerce space feature images of offerings in size 14 or above. As Mitchell explained, brands and retailers can use the Reflekt Me platform to answer shoppers’ three most pressing questions: “What does a product look like… in my size, on my skin tone and with my hair type?”

Reflekt Me aims to help brands increase sales and engagement, reduce returns and build a community. Mitchell emphasized the importance of representation in driving revenue, highlighting the considerable market opportunity in solving the issue of size- or fit-based returns, which is a total addressable market of $816 billion.

Reflekt Me’s clients include Levi’s, which has used the platform to cultivate “a truly inclusive experience [and give] the consumer a more accurate preview of the item,” according to Lara Lasisz, Levi’s Innovation Lead.

Syrup

Speaker: James Theuerkauf, Co-Founder and CEO
Area of disruption: Optimizing Operations: Payments and Supply Chains
Read the full Innovator Profile for Syrup

Founded in 2020, Syrup offers an AI-powered platform that helps omnichannel brands and retailers optimize inventory management. The platform uses machine learning (ML) algorithms to analyze historical sales data, market trends and other factors to provide accurate demand forecasts and inventory recommendations. It also offers tools for automating inventory allocation, managing purchase orders and optimizing inventory levels across multiple channels.

The impact of Syrup’s AI-powered software
Source: Syrup

According to Theuerkauf, the Syrup platform drives a 5%–10% gross margin increase, reduces excess inventory and waste by 10%–20% and achieves time savings of 60%–90% on manual workflows. Theuerkauf also stated that the platform drives “10X better inventory decisions.” For example, Syrup can correlate the impact of micro-influencers with point-of-sale (POS) data.

The company’s omnichannel retail clients include Desigual, Faherty, Reformation and Windsor.

Theuerkauf presents on how AI impacts inventory decisions
Source: Coresight Research

Toki

Speaker: Elise DeCamp, Co-Founder and CEO
Area of disruption: next-generation business needs

Toki offers an “easy-to-manage” loyalty program platform that creates growth and retention. On the platform, brands and retailers can create branded tokens, offer gamified experiences with non-fungible token (NFT) prizes and innovate into Web3. On the other side, consumers can use one simple login to enjoy fun experiences, earn rewards for sharing their data and shop “their own way.”

DeCamp speaks on how the Toki platform helps companies attract and retain customers
Source: Coresight Research

According to DeCamp, Toki was built to help companies earn 10X the engagement and 10X the revenue. To do so, Toki has turned loyalty into a “full funnel program,” along every part of the consumer journey: pre-conversion, at purchase and post-conversion. Retailers can use loyalty as an acquisition tool for better results and a better shopping experience, which Toki facilitates. DeCamp stated that Toki creates a unified experience by incentivizing customers to write a review or take a quiz and bringing a company’s entire tech stack together.

Toki enhances the customer journey
Source: Toki

Tolstoy

Speaker: Dov Kaufmann, Co-Founder and CEO
Area of disruption: Innovative Video Applications
Read the full Innovator Profile for Tolstoy

The platform allows for the creation, publishing and sharing of short-form interactive videos to increase visit duration times on the clients’ websites and drive conversion. Tolstoy also offers a video quiz feature that enables businesses to better understand their audience and personalize their offers and future experience.

Kaufmann dives into Tolstoy’s various features
Source: Coresight Research

Kaufmann started his presentation with a story about how Tolstoy helped Omsom, a company that makes Asian food flavor packets. According to Kaufmann, it was a story that could only be told via video, one particularly suited for TikTok, which is why consumers often did not convert on the websites. However, the personalization and engagement provided by interactive video changed that.

Tolstoy has a measurable impact on return on investment (ROI), with Kaufmann stating that companies BelliWelli, Deux and Korean Skincare have seen a 22X, 60X and 89X increase in ROI, respectively, since using the platform.

Some of the in-video interactions that Tolstoy provides
Source: Tolstoy

Wink

Speaker: Deepak Jain, Founder and CEO
Area of disruption: Optimizing Operations: Payments and Supply Chains
Read the full Innovator Profile for Wink

Wink is a US biometric identity and payments platform that enables companies to offer simpler and seamless payments experiences through AI and ML technology and facial and voice recognition-based, multi-factor authentication. Customers can checkout securely and quickly without using passwords, usernames, card numbers or SMS texts.

Jain explains the details of Wink’s platform
Source: Coresight Research

Jain explained that Wink converts all cameras into biometric authenticators and payment acceptance points—there are currently more than 44 million cameras in the world (see image below). He discussed the multiple applications in the payment space that the technology facilitates, including frictionless in-store payment, loss prevention for self-checkout, hands-free and in-vehicle payments, smart home cloud biometric payments and ATM fraud prevention. Users enjoy that Wink provides biometric authentication with one-way encryption and Web 3.0-compliant architecture.

Currently, the Wink payments platform supports major payment methods and can send biometric payments to more than 200 major gateways.

Wink data on the rise of cameras in the world
Source: Wink

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Reasons to Read

Each report in the Weinswig’s Weekly series reflects on a topical theme in retail. We also highlight our key research from the past week and upcoming reports to look out for, so you don’t miss out.

This week’s note, “From the Desk of Deborah Weinswig” (CEO and Founder of Coresight Research), discusses recent ventures in drones, including from Amazon, IKEA and Walmart.

Other relevant research:

The Last-Mile Race Intensifies: Target and Walmart Pave the Way in Delivery Innovation
Read last week’s Weinswig’s Weekly, which discusses the Coresight Research team’s activities at Shoptalk 2023.

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Reasons to Read

Our Weekly US and UK Store Openings and Closures Tracker reports on store closures, openings and bankruptcies.

Data in this report include:

2023 week-by-week comparisons of announced store closures and openings in the US and the UK
2022 week-by-week comparisons of announced store closures and openings in the US and the UK
2023 major US store closures and openings
2023 major UK store closures and openings

Companies mentioned in this report include: Best Buy, Dollar General, Five Below, Foot Locker, Signet Jewelers and Williams-Sonoma.

Other relevant research:

Complementing our weekly report, the Coresight Research US Store Tracker Databank offers our premium subscribers access to openings and closures data from 2012 to 2023 year to date, filterable by sector and year.

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Executive Summary

Introduction

Coresight Research is a research partner of Shoptalk 2023, which will take place during March 26–29 in Las Vegas. Shoptalk is an annual retail conference focusing on retail innovation and the trends, business models and technologies that are shaping the future of retail.

The Coresight Research team will participate in two panels and a workshop during the conference—see our Must-Read Guide to Shoptalk 2023 for more details.

In addition, on March 26, 2023, Coresight Research will host the “Shark Reef” startup pitch competition at the Beacon Theater, which will see 12 early-stage US retail-technology innovators compete to win the Judges’ Choice and Audience Choice awards.

In this report, we present a preview of the pitch competition, covering its format and the judging panel as well as an introduction to each participating innovator.