Shoptalk Fall 2024 Day Two: Understanding Supply Chain Trends and Enhancing Sustainability Drives Business Success

Introduction

Coresight Research is a research partner of Shoptalk Fall 2024, which will take place during October 16–18 in Chicago, Illinois. Shoptalk Fall is a new conference that builds on the success of the annual Shoptalk event held earlier in the year (which has been rebranded as Shoptalk Spring). The conference unites executives from retailers, consumer-facing brands and technology vendors across both physical stores and e-commerce to discuss the latest trends, innovations and challenges in the industry.

Shoptalk Fall 2024 covers six major themes in retail: conquering unified commerce; designing an optimal product assortment; developing efficient and successful teams and retail businesses; unlocking new growth opportunities; loyalty and brand trust; and AI (artificial intelligence) and the changing retail landscape. (Not all coverage reports cover all six themes.)

We present key insights from the second day of Shoptalk Fall 2024.

Shoptalk Fall 2024 Day Two: Coresight Research Insights

1. Developing Efficient and Successful Teams and Retail Businesses

As discussed in the “Rapid Fire: Major Trends in Global Trade and the Supply Chain” session, companies cannot build effective businesses if they do not first understand major trends that are occurring throughout the global macroeconomic environment. Brian Houck, Partner and US Supply Chain Practice Leader at PwC, believes that rapidly changing consumer demand is proving to be an extreme challenge for many companies. According to Houck, the next five years in the retail market will be won by the companies that are currently becoming adaptive in the face of consumer sentiment that seems to change “every quarter.”

Supply chains were a major discussion point in the session, “Tools, Tactics and Structures that Enable Supply Chain Resiliency.” There, interviewer Janie Yu, Partner at LFX Venture Partners, asked audience members via a live poll about the “biggest supply chain problem [they] are looking to solve.” Nearly 40% of respondents stated that they are trying to “overcome legacy systems to enable growth,” a sentiment with which Larry Grischow, Executive Vice President of Supply Chain and Procurement at Abercrombie & Fitch, agreed. His company is working diligently to achieve “unified warehouse data” across its entire network that Abercrombie & Fitch can simply plug into “downstream systems” to optimize its inventory processes and, therefore, the customer experience, Grischow explained.

Currently, Abercrombie & Fitch is leveraging AI to optimize its forecast accuracy and inform its demand planning procedures; this discussion led nicely into Yu’s second question for the audience: “Where do you think AI is going to have the biggest impact on your supply chain operations?” Just over 40% of the audience answered “end-to-end supply chain orchestration.” Rick DiMaio, Executive Vice President and Chief Supply Chain Officer at Ace Hardware, agreed that AI could revolutionize end-to-end supply chain orchestration as, currently, “if one [supply chain] link breaks, the entire thing stops.” (We discuss more insights on AI later in this report.)

The “Tools, Tactics and Structures that Enable Supply Chain Resiliency” speakers (left to right): Grischow, DiMaio and Yu
Source: Shoptalk Fall

 

Sustainability emerged as a focus on day two, with various brands and retailers pointing to initiatives that can increase sustainability without adversely affecting efficiency—in some cases, even boosting efficiency. Much discussion centered on the need to keep profitability at the core of sustainability strategies.

Lifestyle brand Rothy’s is committed to sustainability, taking plastic bottles and repurposing them into stylish footwear and accessories, according to the company’s Chief Supply Chain Officer, Heather Skidmore Howard.

Irene Quarshie, SVP of Global Supply Chain and Logistics at Target, outlined the sustainability problem in the apparel sector: 82 pounds of textile waste is generated per person each year in the US. Target has invested, tested and learned to understand products’ end of life and the resale market. Quarshie pointed to a number of initiatives that the company has launched to enhance sustainability:

• Launched in 2016, Target’s car-seat trade-in program sees consumers bring in used car seats to receive a 20% discount on new car seats and other selected baby products (such as strollers). The plastic resin pellets produced from the recycled car seats are used to create new products and materials, including storage crates for Target’s home-goods brand, Brightroom; some plastic crates are made from 30% PCR (post-consumer recycled) material. As of September 2024, more than 3 million car seats have been recycled through the program, resulting in the collection of 45 millions pounds of resin, according to Quarshie.
• Target’s “Denim Take Back Event,” which was held chain-wide in August 2024, enabled consumers to trade in their used denim in exchange for a 20% discount on any denim purchase with Target Circle.
• The Target Forward sustainability strategy commits to have 100% of owned brands be designed for a circular future by 2040.

Katherine Homuth, Founder and CEO of SRTX, explained to the Shoptalk Fall audience that the material science and technology company aims to offer better textiles that drive durability and sustainability to transform the apparel market. Its Sheertex brand is the number-one bestselling tights brand in the US, with 3.3 million pairs sold, according to Homuth. She highlighted that by increasing vertical integration SRTX reduced its costs by 50% in five years with 16 times fewer fossil fuels used.

Elsewhere at the conference, one hot topic was building strong customer experiences. We heard from Sharon Price John, CEO of Build-A-Bear Workshop, about how her company built its success by differentiating itself from other, more transactional mall retailers. In her mainstage keynote, Price John stated that Build-A-Bear “has been a pioneer in experiential retail in its near three decades in existence.” The experiences that its customers receive have in turn resulted in high affinity figures, with its happy customers “extremely willing” to offer up their data, she said. The experiences are so treasured that associates get invited to children’s birthday parties, and the company now benefits from a couple of generations of customers having memorable experiences in its stores, which has turned into record financial results, according to Price John.

Price John discusses how providing memorable in-store experiences have translated to financial success for Build-A-Bear
Source: Shoptalk Fall

 

In some sessions, speakers discussed the ways in which companies should not build their retail businesses. For instance, Stacy Malone, Vice President of Global Business Marketing at Pinterest, bluntly stated that lower-funnel, conversion-focused marketing no longer works and that companies “need to be able to influence each step of the way.” Kristen D’Arcy, Chief Marketing Officer at True Religion, and Lee Sterling, Chief Marketing Officer at Simon Property Group, agreed that traditional, lower-funnel marketing tactics are not effective but recommended that companies diversify their marketing channels and emphasize storytelling in order to meet customers wherever they are in the shopping journey—or, as D’Arcy put it: “Fish where the fish are!” True Religion is seeing particular success with micro- and nano-influencers who are more focused on building a community, rather than converting shoppers instantly, D’Arcy said.

2. Loyalty and Brand Trust

The mainstage keynote delivered by executives from McDonald’s revealed that the company has seen dramatic improvement in the data it possesses on its customers, with 150 million 90-day members. Whereas previously the company just operated restaurants and drive through, today, there are multiple channels such as ordering via the app or online for pickup or delivery, as well as purchasing in-store. Via the app, McDonald’s can market to its customers directly. The fast-food chain’s data team defines global goals (such as the loyalty program being defined by points) but otherwise allows each country broad freedom in terms of the particulars in how they operate their respective programs, such as the number of points needed for an item. McDonald’s is working toward developing one single app that works worldwide. Although the loyalty program is transactional at present, the company is thinking about building an emotional loyalty program, the Shoptalk Fall audience was told.

Left to right: Michelle Gansle, Global Chief Data and Analytics Officer at McDonald’s Corporation; Allegra Krishnan, Global Chief Loyalty & Engagement Officer at McDonald’s Corporation, Zia Daniell Wigder, Chief Content Officer at EMARKETER (Interviewer)
Source: Shoptalk Fall

 

3. Conquering Unified Commerce

In the “Building Best-in-Class Unified Customer Experiences” session, the panelists presented two interesting views on unified commerce: J.Crew Group aims to offer authenticity to all its customers, regardless of age; Fabletics leverages data to offer real-time one-to-one personalization to its customers.

Danielle Schmelkin, Chief Information Officer at J.Crew Group, said, “We want to be seamless to our customers, wherever they want to interact with us.” The company leverages its data for connectedness, offering its associates a clienteling tool that can include information on customers to provide more personalized service. J.Crew has brought back its iconic catalog—digitally—and offers an app on the Apple Vision Pro headset, Schmelkin said.

Adam Goldenberg, Co-Founder and CEO of Fabletics, explained that his company uses an internally built system that makes its data available to all aspects of the company. “We are using data every day and making changes every day based on it,” he said. Data enable Fabletics to make real-time decisions on which content, such as video, to use to drive sales and customer satisfaction.

Goldenberg explains the critical role of data in Fabletics’ operations
Source: Shoptalk Fall

 

4. Designing an Optimal Product Assortment

In one interesting session, executives from Havenly (an interior design and décor company), Macy’s and Walmart discussed product assortment strategies, with each discussing their experience targeting different groups of customers: digitally native millennials, 29–45-year-old men (for the launch of a new private label) and the entire US population.

Lee Mayer, Co-Founder and CEO of Havenly, explained that his company was created to capitalize on the demographic of digitally native millennials coming into their peak furniture-buying age (their 30s). Havenly aims to speak to their unique shipping habits and needs.

Emily Erusha-Hilleque, SVP of Private Brands at Macy’s, discussed how private brands fit into the company’s “Bold New Chapter” transformation (announced February 2024), which aims to fundamentally reposition the company and deliver growth. According to Erusha-Hilleque, Macy’s actually embarked on its journey to “build, rebuild and reimagine [its] portfolio of 25 brands” two years ago. The company has evaluated its brands, kept most, retired some brands and introduced three new brands in that time, she revealed. One of the new brands, launched in September 2024, is Mode of One: a men’s contemporary brand aimed at 29–45-year-olds. Macy’s also hired new design, analytics and brand management teams to support the transformation and new view of its private-brand portfolio.

Denise Incandela, EVP of Fashion & Private Brands at Walmart US, highlighted that Walmart’s vision is to democratize fashion for the US population, driven by two major trends: the shift from department stores and specialty retailers to mass merchandisers, and the shift in fashion authority from fashion magazines to individuals. Walmart has increased the presence of higher-priced national brands and elevated its own brands, shifting from considering them as private label to cohesive brands, Incandela said. The company has also sped up its supply chain to get products to consumers faster, she added.

Erusha-Hilleque discusses the role of private brands in the Macy’s portfolio
Source: Shoptalk Fall

 

5. AI and the Changing Retail Landscape

In addition to discussing how macroeconomic trends will impact retail companies in the coming years, speakers at the “Rapid Fire: Major Trends in Global Trade and the Supply Chain” session also discussed the potential of AI to continue to revolutionize the retail space. Sara Ittelson, Partner at Accel, stated that she not only believes that AI is not overhyped, but that its full potential continues to be understated. Ninaad Acharya, Co-Host of the “eCom Logistics Podcast”, and Co-Founder and CEO of Fulfillment IQ, agreed, stating that AI will cause massive disruption in the retail supply chain given its ability to analyze data in real time. He also predicted that organizational charts will look very different in just a few years, with many roles being replaced by AI agents.

However, Houck of PwC took a more cautious approach, stating that AI will only succeed if it is implemented correctly. He recommended that businesses first start with the problem they want to solve and then decide if AI is the right tool for the job, also stating that not explaining to employees why a technology is being implemented or what the long-term goals of the technology can often lead to “massive failure.”

The “Rapid Fire: Major Trends in Global Trade and the Supply Chain” panelists (left to right): Houck, Sara Ittelson, Partner, Accel, Ninaad Acharya, Co-Host, eCom Logistics Podcast & Co-Founder & CEO, Fulfillment IQ, HG O’Connell, Senior Content Director, Shoptalk (Interviewer)
Source: Shoptalk Fall

 

The impact of AI was also covered in the “Spotlight on Cutting-Edge Technology Solutions: Reaching New and Existing Customers Effectively” session, where executives from technology companies Ometria, Qloo, Shopsense AI and Soona, discussed how the technology is enhancing personalization and content creation, as well as providing companies with detailed consumer insights.

While all speakers agreed that AI can help brands predict consumer preferences and streamline processes, a rather unexpected insight came from Liz Giorgi, Co-Founder and CEO of Soona, who highlighted that consumers may desire more authentic, analog connections in the years to come, as they are likely to grow weary of constant digital targeting.

Moving forward, the session panelists agreed that it will be critical for brands and retailers to balance leveraging AI for efficiency and maintaining human creativity and genuine interactions. This tension suggests that, while companies must innovate with technology, they must simultaneously stay mindful of consumers’ desire for meaningful, human experiences.