Introduction

Coresight Research is a research partner of Shoptalk Europe 2024, which took place during June 3–5, 2024, in Barcelona, Spain. The annual event brought together retail and e-commerce professionals to discuss trends, innovations and challenges in the industry, with a focus on five major themes: employing AI (artificial intelligence) to transform business; harnessing brand power and building brand trust; creating unified retail experiences; next-generation demand creation; and navigating changing industry relationships. Our wrap-up report presents key insights from across the three-day event under these themes, featuring examples from numerous event sessions and companies.

Shoptalk Europe 2024 Wrap-Up: Coresight Research Insights

1. Employing AI To Transform Your Business

Companies are increasingly adopting AI for a range of purposes, including data analytics, inventory tracking, real-time recommendations and enhancing customer experiences. For example, AI can help optimize supply chains by predicting demand more accurately, while AI-powered chatbots and virtual assistants can provide 24/7 customer support.

Generative AI (GenAI) has emerged as a particularly exciting area of development, with discussions during Shoptalk Europe 2024 focusing on its potential to create new content and applications across various business functions. During the event, we saw customer-facing use cases for AI and GenAI from a number of online-focused retailers, especially those in the apparel space:

• Amazon Fashion’s use of AI and large language models (LLMs) provides the company with detailed customer review analysis and consumers with real-time size recommendations that are informed by brand-specific insights and customer preferences.
• During the event, Amazon also showcased its innovative use of GenAI through programs such as Rufus, an “expert shopping assistant” that enhances natural language search capabilities; Starfish, a solution that improves product cataloging processes; and AI-driven customer review summarization, which helps customers make more informed purchasing decisions.
• Gareth Locke, Chief Growth Officer at Mytheresa, discussed how the company is using AI to make personalized product recommendations. However, Locke also stated that the company combines these recommendations with manually merchandised and edited “key pages,” enabling it to deliver “the finest edit in luxury.”
• Daniel Krantz from Otto Group highlighted how GenAI can enhance customer experiences through improved search capabilities and aggregated reviews. The company’s “Search Buddy” feature uses natural language processing to provide personalized product recommendations, resulting in increased click-through and conversion rates. Otto Group also uses AI to collect and analyze customer reviews, allowing potential customers to ask questions to a GenAI-powered LLM and receive personalized answers.
• Tian Su, Vice President of Personalization and Recommendation, at Zalando, highlighted the company’s GenAI-powered Lambda OS system, which enables hyper-personalized conversations with customers and can handle millions of interactions simultaneously. So far, the system has logged over half a million conversations, with engagement times lasting 3X longer than the time used for traditional search bar inputs, according to Su.

Away from customer-facing use cases, the business-to-business applications of AI were exemplified by startups such as Raspberry AI, which won the Judges’ Choice award at the Shoptalk Europe 2024 Startup Pitch with its GenAI-powered design assistant that can reduce sample costs and time. This tool allows designers to visualize concepts and refresh designs with only a few words, showcasing the technology’s potential to streamline operations and boost efficiency.

Cheryl Liu, Founder & CEO of Raspberry AI, collects the Judge’s Choice award from the judges during the Startup Pitch
Source: Shoptalk Europe

 

Amazon Web Services (AWS) noted that many companies are using the same AI models and, as such, data has become the differentiator, revealing the need for a strong data foundation strategy. Most notably, companies need storage and specialized databases as the foundation of their data strategies; integrated, not siloed, data sources; and a strong governance strategy, focused on how data gets in and out and access controls.

AWS also explored how companies can enable teams to build GenAI apps by having clear and well-defined processes and governance controls that build trust among stakeholders, as well as by starting with something that can be reversed if things go wrong—what Amazon calls the “two-way door” system.

Rebecca Bemhena, Vice President of Content, Europe, at Shoptalk, and Ben Miller, Vice President of Original Content and Strategy at Shoptalk, offered three takeaways for deploying AI in retail:

1. Balance risk with a culture of experimentation
2. Full business ownership remains critical, and the clear owner must have full accountability
3. Stay focused on applications that solve real problems

The Shoptalk team discuss the deployment of AI in retail
Source: Coresight Research

 

2. Harnessing Brand Power and Building Brand Trust

At Shoptalk Europe, a company’s ability to build brand loyalty was identified as a crucial factor in its long-term success in the retail sector. We heard from various retailers and brand owners on how to build brand loyalty via the customer experience, innovation and increased cultural and demographic relevance.

Among retailers, speakers from Amazon Fashion, Bata and H&M agreed that retailers must prioritize creativity, curation and innovation when attempting to optimize the customer experience and, as a result, build loyalty:

• Creativity is key to cutting through the noise and delivering unique, branded experiences.
• Curation is essential for consistent surprise and delight.
• When implementing innovation, balancing value and convenience is crucial, and investments in innovations that bring customers back time and time again should be prioritized.

Looking at brand owners, Sanjay Luthra, Executive Vice President, Managing Director (EMEA) and Global Head of Direct-to-Consumer (International) at Mattel, discussed the company’s approach to connecting with fans and collectors through limited-edition products and collaborations, highlighting the importance of nostalgia in creating brands that appeal to adults. According to Luthra, two key strategies have led Mattel to success in this regard:

• Launching collaborations that create excitement and exclusivity—Luthra discussed two recent collaborations between Mattel brands and other companies, the collaborations between Off-White and Monster Mattel and Monster Cards and Gucci, both of which quickly sold out.
• Listening to the consumer—Following the release of the Barbie movie, Mattel listened to its community, finding a demand for goods based on the character of Ken, portrayed by actor Ryan Gosling. The company ultimately developed a Ken-themed sweatshirt, which sold over 100,000 units in the first days of its launch.

Mars Pet Nutrition also leverages its brand power to resonate with its target audience. By understanding its customer’s preferences and tailoring its offerings accordingly, the company builds strong emotional connections that drive loyalty. Deri Watkins, Regional President (Europe and ANZ), Mars Pet Nutrition, revealed that today’s consumers are adopting pets at much younger ages than those who adopted pets previously, meaning that Mars has needed to change the way it interacts and connects with its customers. For instance, Watkins stated that some 40% of Gen Zers want to buy their pet products digitally, making social commerce a serious growth opportunity for the company. To this end, Mars is building relationships with younger consumers by providing advice on how to buy a pet (such as which breed to select) and how to take care of their pets once adopted. The company is also deploying personalized marketing messages, with one campaign for its Whiskas brand producing hundreds of pieces of customized content to deliver an 80% “addressable” campaign.

Watkins explains how Mars Pet Nutrition is engaging with younger consumers
Source: Shoptalk Europe

 

Elsewhere, Procter & Gamble (P&G) discussed how partnerships and acquisitions have helped the company meet specific consumer needs and expand its market presence in areas where its core brands cannot credibly stretch. For example, the acquisition of Mielle has allowed the company to better serve the “textured hair market.”

Bemhena and Miller of Shoptalk discussed the opportunities for differentiation created by limited-time product drops, brand collaborations and newer digital marketing formats, such as video. They also provided three takeaways on brand power:

1. Brands should consider being a part of the cultural conversation.
2. Brand engagement is blurring the traditional lines of brand marketing.
3. Brand trust is hard to gain but easy to lose; authenticity is key.

3. Creating Unified Retail Experiences

The concept of unified commerce was a recurring theme at Shoptalk Europe 2024, with speakers advocating for a consumer-centric approach to retail. However, is unified commerce even real? That was one of the questions tackled by the event’s concluding panel. Chris Walton, Co-CEO of Omni Talk, stated that he thinks that the retail industry needs terms like “unified commerce”—whether it is omnichannel, unified commerce, or new retail—to educate the industry, where there is a risk of being dismissive. Anne Mezzenga, Co-CEO of Omni Talk, agreed with Walton, stating that she expects that there will be no “end” to unified commerce as consumers’ expectations will continue to evolve.

Miller from Shoptalk argued that it is time for retailers to move on from the channel-centric view implied by “omnichannel” to a consumer-centric view in unified commerce, one built upon four key components:

1. A unified tech stack, with retailers potentially needing to rationalize their stack over time.
2. A unified data platform to enable the harmonious exchange of data, providing a single view of the customer and operations (such as inventory levels).
3. A unified corporate structure that finally breaks down siloes.
4. A unified customer experience enabled by the prior three components and focused on enhancing in-store elements, creating a throughline that reflects shoppers’ journey across both digital and physical stores.

The digitalization of the physical store to match the capabilities of the e-commerce channel has highlighted as a key component of unified commerce.

• David McIntosh, Vice President and General Manager, Connected Store, at Instacart, stated that shoppers have told Instacart that they love the convenience and personalization of e-commerce and desire that level of convenience and personalization in physical stores. On the other hand, Instacart hears questions from stores on how they can digitize in-store customers. Instacart’s approach to the connected store sits at the intersection of those two conversations—the company believes that every element of the store, from counters to shopping carts be digitized. For example, smart shopping carts could enable shoppers to place a deli order from anywhere in the store or allow CPG (consumer packaged goods) companies to offer personalized deals and coupons to in-store shoppers.
• Marc Vicente Sala, Group Digital Director at Kingfisher, discussed how the company has successfully built an online marketplace that connects with its physical stores. This connection allows customers to return third-party sellers’ products to Kingfisher stores, facilitating easy returns. Additionally, Kingfisher stores fulfill close to 90% of the company’s online orders (despite its large marketplace of third-party sellers), according to Sala. We also heard from Nick Burton, Chief Information Officer at Screwfix (owned by Kingfisher), on how the company reduces fulfillment times and empowers customers with self-service options: Its event-driven platforms provide real-time notifications to store colleagues, allowing them to quickly fulfill customer orders. Screwfix has also taken steps to allow customers to finish more tasks themselves; for instance, it linked its app and its order management systems, making it easier to complete in-store pickups.

Sala highlights Kingfisher’s unified commerce strategies
Source: Shoptalk Europe

 

RFID (radio-frequency identification) was also highlighted as an essential tool for creating unified retail experiences. RFID helps retailers maintain accurate inventory levels, which is critical for meeting customer expectations and ensuring product availability. By providing real-time visibility into inventory levels, RFID technology enables retailers to optimize stock levels, reduce out-of-stock situations and improve overall supply chain efficiency.

• Gustav Zetterström, Senior Vice President, Global Head of Emerging Technology, at H&M, discussed how the company is leveraging RFID technology, stating that the company is using the tech for everything from real-time product tracking to providing smart mirrors in fitting rooms with instant inventory updates. H&M also leverages its RFID data to inform store-level inventory decisions, often resulting in reduced SKU (stock-keeping unit) counts and store-level inventories that are optimized for local trends and styles. “To have this level of data and understand what is happening in the stores will revolutionize the experience for shoppers,” Zetterström predicted.

Zetterström discusses the use of RFID technology at H&M
Source: Shoptalk Europe

 

Shoptalk’s Bemhena and Miller provided three takeaways on unified commerce:

1. Implementing unified commerce is more than tying channels together—it requires technology, data and organizational structures.
2. Unified commerce can unlock benefits beyond the customer experience.
3. Physical stores are critical to unified commerce, necessitating investments in technology and in-store training.

4. Next-Generation Demand Creation

This theme covered perhaps the most ground at Shoptalk Europe 2024, tackling a wide variety of topics, from localization and personalization to diversified offerings to rapid-delivery models and retail media.

Personalization was identified as a key driver of demand—companies such as Mango and maude use localization and personalization technologies to tailor their offerings to specific markets and individual consumers. This approach not only enhances the shopping experience but also builds customer loyalty by making products and messaging more relevant and engaging. Similarly, Baptiste Marchis, Vice President, Digital International, at Victoria’s Secret, noted how the company seeks to unlock cross-border opportunities by adapting its business model to each country, looking at the joint ventures, partnerships and strategies that will bring it the strongest growth in each region. Meanwhile, Andrea Cappi, Chief eBusiness and Omnichannel Officer at Valentino, stressed the importance of retailers understanding both the cultures and customers of the countries they are working in. “Based on your customer profiles, you must integrate localized marketing and channel mix practices,” Cappi explained.

IKEA’s strategy of opening smaller, urban stores to boost penetration across channels was discussed as an innovative approach to demand creation in a retail market where consumer shopping behaviors are constantly evolving. While those stores are sometimes not profitable, the gains are found in the “halo effect” of greater cross-channel shopping in stores’ catchments.

Lars-Johan Jarnheimer, Chairman, INGKA Holding B.V. (IKEA), speaks at Shoptalk Europe
Source: Shoptalk Europe

 

Diversifying beyond the traditional core was also explored elsewhere: Currys showcased how services can create secure, lucrative business models in low-margin categories, such as the electronics category. By offering services such as financing and product set-up, Currys builds customer loyalty and increases profitability.

Also in electronics retail, MediaMarktSaturn (MMS) defined its four pillars for growth: services and solutions (such as trade-in and financing); its marketplace; its “lighthouse stores,” which provide “tech villages” in selected major cities; and retail media. According to Torsten Ahlers, Managing Director, MMS Marketing Services, at MMS, the company’s “asset is the consumer;” Ahlers also stated that MMS has looked at how it can work in closer and different ways with its customers.

Retail Media in Focus

In the US, retail media spending is estimated to reach the levels of television advertising in 2024, while European retailers are just starting to explore the implications of retail media, according to Shoptalk’s Miller. According to Miller, the European retail media market is estimated to be only about 10% of the size of the US market; as such, some of the questions brands have—such as where the retail budget sits, what the role of trade marketing is and what categories to focus on—can be answered by looking to the US.

A slide from Shoptalk showcasing the rapid rise of retail media spending in the US
Source: Shoptalk

 

Adgild Hop, Partner and European Retail Market Leader at Deloitte, discussed how grocery retailers’ margins are eroding amid higher labor costs and interest rates. At the same time, retail media offers a 75%–85% net profit margin and only takes a small proportional contribution to move the needle for a grocery retailer’s bottom line. A grocery retailer pivoting to be a retail media-first retailer could potentially grow its net margin from a European industry average of 1.7% to 4.3%, according to Deloitte (and as demonstrated in the image below). Hop argued that, ultimately, retailers could look to become media and tech companies enabled by grocery (and the data it provides), boosting not only margins but also valuations.

A slide from Deloitte revealing how a retailer could potentially grow its net margin with retail media
Source: Deloitte

 

Retailers must foster collaboration between different departments—such as their marketing, technology and operations departments—to ensure that retail media initiatives are effectively integrated into their overall business strategy. However, according to Alexis Marcombe, CEO at Unlimitail (Carrefour and Publicis), retailers should not underestimate the amount of change needed to tap the retail media opportunity and deliver the right services and proposition, and management must ensure that the change occurs. Retail media is “all about measurement” and, for that, retailers need the ability to effectively structure data, according to Marcombe. Teams across the company must also foster collaboration. “You need commercial, marketing and other teams to work together. Company ownership and clarity across teams are not yet set up yet. That is driven by historic silos, which creates challenges in driving the effectiveness of retail media,” explained Tony Navin, Global eCommerce Director at Kraft Heinz.

Ahlers from MMS recommended retailers embark on retail media partnerships with firms who are experienced in retail media, know the potential issues and can limit major mistakes; for instance, Ahlers said that MMS partnered with Criteo as a technology partner, as well as a sales and an operational partner. He also advised that retail media requires alignment from the board because retail media touches multiple parts of a business, such as its technology and marketing teams.

Walmart is aiming to participate in e-commerce growth occurring outside of the Walmart ecosystem—with technology providing a key way of capturing some of that growth—according to Sunil Kumar, Global Vice President and General Manager, Walmart Commerce Technologies, at Walmart. Specifically, Kumar explained that Walmart Commerce Technologies is very focused on the European market due to the absence of direct competitors in the market—on the other hand, in the US, large retailers often rival Walmart.

Kumar describes Walmart’s focus on the European market
Source: Shoptalk Europe

 

Other Opportunities

At Shoptalk Europe 2024, we heard from a number of rapid delivery providers, following a period in which the ultrafast delivery segment has struggled and a number of providers closed or contracted:

• Miki Kuusi, Head of International at DoorDash and CEO of Wolt, discussed the “pull” effect in new channel development, noting that e-commerce is at different stages in different countries due partly to high-quality players “creating the market;” he also argued that a similar effect can be seen in the rapid delivery space.
• Kuusi also revealed that 85%–90% of Wolt sales are incremental to the third-party stores that serve its retail orders. He also stated that Wolt brings technology to small retailers that may not have much tech capability. Likewise, Suzy McClintock, Vice President, Grocery, Hop, Editions and Retail, at Deliveroo, stated that her company helps create product solutions for its third-party retail partners, providing them with various benefits, including savings that are ultimately passed on to the consumer.
• Kuusi and McClintock agreed that convenience in rapid delivery services is not just about which company can provide the shortest delivery time. McClintock revealed that the access to retailers that consumers could not easily access otherwise is important to shoppers, while Kuusi claimed that order accuracy is more important than delivery speed; as such, Wolt has focused on optimizing its inventory levels and order accuracy.
• Dr. Oliver Vogt, Director, Strategy and Transformation, at Tesco, discussed how the retailer has integrated rapid delivery into its small-format “Express” convenience stores, given Tesco’s experience of fulfilling grocery orders from large stores. Despite the operational differences, Tesco ended up using “more or less” the same systems at Express as it does for its larger estate, using its own IP (intellectual property) for scheduling, routing and delivery. Vogt stated that this decision was due to the company already having the people, in-store hardware and cloud-based that it needed, meaning it did not have to add much to bring omnichannel to the smaller stores.

Vogt discusses Tesco’s rapid-delivery capabilities
Source: Shoptalk Europe

 

On the second day of the event, Shoptalk’s Bemhena and Miller explored the disruption created by factory-direct models and AI (already discussed); these factors are turning the path to purchase into an “infinite loop,” Miller explained. The pair’s three takeaways on next-generation demand creation were:

1. The traditional purchase funnel is ancient history—retailers must understand their own shoppers’ journey.
2. Shoppers are moving from consideration to consumption more quickly, meaning that retailers need to remove friction and make as many touchpoints as possible shoppable.
3. AI and shoppable media are merging search and discovery.

5. Navigating Changing Industry Relationships

Throughout the event, data sharing emerged as a critical factor in navigating changing industry relationships, with speakers emphasizing the benefits of data-sharing partnerships between brands and retailers. For example, marketplaces Allegro and Miravia provide sellers with valuable shopper data, creating a “win-win-win” scenario for sellers, marketplaces and consumers.

The rise of online grocery and unified retail has led to the need for new industry relationships and closer collaboration between retailers and brands, with Bruno Mourão, Head of Ecosystem at Sonae MC, Bertrand Bastien, New Business Ventures Director for Pernod Ricard, and Marta Lopez Saavedra, Head of Grocery and Retail, Spain, at Uber, all discussing how their companies were forging new data-sharing collaborations. Mourão discussed how Sonae is adding new features to its processes, including drop-shipping and retail media. Mourão also covered how Sonae has launched a self-service portal that allows suppliers to access data and analytics, providing insights beyond their core categories. A “360-degree vision of the customer is critical and tracking behavior across channels and platforms is key for us and our partners,” Mourão explained.

Brand and retailer partnerships are “the only way to go” when looking to deliver a satisfying, unified commerce experience, according to Gaurav Goel, Vice President, Global Commercial Strategy and International Ecommerce, at PepsiCo. By partnering with retailers, PepsiCo has been able to execute a successful unified commerce strategy, resulting in a major sales uplift for the company, especially during times surrounding major sporting events. Partnerships have also enabled PepsiCo to integrate its products seamlessly into various retail environments, providing customers with convenient access to their favorite brands while enhancing the overall shopping experience. Also from PepsiCo, Celso Borges Shimabukuro, Vice President and Head of eCommerce, Europe, at PepsiCo, discussed how the company is currently pursuing “full-funnel retail media concepts” as the company looks to partner in-store activations with connected digital activations.

Goel discusses the importance of brand and retailer partnerships
Source: Shoptalk Europe

 

Jie Cheng, Vice President and Global Head, Digital Commerce, at Mondelēz International, discussed how brands are often in a strong position when it comes to consumer trend data and product development capabilities, while retailers often have direct access to shopper data—combining those resource pools can be powerful, according to Cheng. For example, Mondelēz has ideated new occasions around which to market its products as suitable—such as, for its Oreo brand in China, weekend family outings (i.e., picnics)—as it pursues demand creation based on partnership and collaboration.

The evolving roles of retailers and brands in the grocery sector—including Amazon’s current transition into a prominent grocery player—were also explored during Shoptalk Europe 2024. In grocery categories, Amazon is finetuning an “Everyday Essentials” strategy built on three pillars—selection, pricing and convenience—and focused on low-price items that consumers buy often (three to four times a week), according to Giorgio Busnelli, Vice President, Consumer Goods Europe, at Amazon. The company is also focused on the most-sold products and variants—those that are most sold in 90% of physical supermarkets and hypermarkets. However, Busnelli also noted that Amazon’s range is one of its competitive advantages: It typically offers around 30 million SKUs in the grocery space in each market compared to the roughly 30,000 SKUs offered in a typical supermarket.

In regard to convenience, Amazon is reducing delivery times by spreading inventory closer to customers and scaling up its same-day facilities. Amazon’s “north star” for its “Everyday Essentials” is making ordering quicker and simpler. To this end, it added an add-to-cart from search feature in 2023; while the feature only saves consumers a single click, it is still “huge for customers” and for Amazon, driving volumes and bigger baskets, according to Busnelli.

Busnelli explains the three pillars of Amazon’s “Everyday Essentials” strategy
Source: Shoptalk Europe

 

 What We Think

Coresight Research believes that, if there is one thread to pull from the five themes of Shoptalk Europe 2024, it is data, including the need for companies to structure their data in a way that maximizes deployment.

• We heard from AWS that retailers need three things to drive AI and GenAI use: data storage and specialized databases as a foundation; integrated, not siloed, data sources; and a strong data governance strategy.
• Likewise, retail media efficiency is inherently dependent upon retailers’ shopper-data strength. Retail media is “all about measurement” and, for that, retailers need the ability to structure data efficiently, according to Unlimitail.
• Data sharing emerged as a critical factor in delivering unified experiences and shaping changing industry relationships between brands and retailers and between marketplaces and sellers.
• Truly unified commerce demands a unified data platform to enable to the fluent exchange of data, creating a single view of the customer and operations.

Digitalization is making retailing a data business, with shopper data moving away from being a monetizable “exhaust” from the core business and toward becoming a principal driver of profits and—perhaps ultimately—focus. Over the long term, major retailers could potentially migrate, becoming media and tech companies in which their traditional retail focus is primarily a provider of data “fuel;” however, such a pivot in focus is far from certain, and that model comes with its own set of risks, most notably around taking the focus away from serving and competing for the shopper and placing it on treating shoppers as a source of data to be sold to more valuable clients (such as advertisers).

Within this context, we reassuringly heard about enhancements to retailer propositions, from small-format stores at IKEA and GenAI applications at companies such as Amazon, Otto and Zalando, to more fluid fulfillment at Kingfisher and an enhanced in-store experience at H&M. Shoptalk Europe 2024 made it clear that retail is changing fast, largely to the benefit of the customer, whose expectations are rising accordingly. The five themes outlined at the event provide one means for retailers to approach how they navigate these changes.