Wendy 00:03

Hello, I'm Wendy Liebmann, CEO and chief shopper of WSL Strategic Retail. And this is Future Shop or in fact, a special version that we've been doing lately called Cloud chat. And with my partner in crime, Justin Honaman, the head of worldwide consumer goods at Amazon Web Service and Guru of All Things technology. This is where we have a short, sharp, hopefully provocative chat about emerging technology and the implications for the future of retail. Hello, Justin, good to see you again.

Justin H. 00:38

So good to be here. I love doing these I've gotten a lot of feedback from, I'll say, listeners or watchers of this, and and it's been fun doing these with you. And it was great seeing you last week at the NACDs anniversary event. And then you guys hosted some incredible events around that. And I mean, you just see the power of relationships and connectivity in our industry, and how you can really get things done through relationships. And you guys are really at a heart at the heart of that. So thank you for the invite to those events.

Wendy 01:08

It was great. And just for everybody, Justin was honored with an award from MMR leading trade publication, retail trade publication for being one of the people who made a difference into 2023. So congratulations on that. Well deserved. It was

Justin H. 01:26

great. And I you know, it was so great to meet the other retail leaders. I mean, I work with retailers every day in my role, but the group that was honored was just an incredible group. And many of them I didn't know and so again, like walked out there going, Wow. I mean, I was just blown away.

Wendy 01:42

Yeah, be between a few days of, as Justin said, retail meetings, we were really the range of all the major mass retailers in this country and around the world. We had the new CEO of Walgreens Boots Alliance, as well as Kroger and Costco and Walmart, all the CVS people it was just an extraordinary week, we just

Justin H. 02:09

Publix, Hy-Vee, I mean, it was just ordered regroup. So yeah, and

Wendy 02:13

all the regional rate the other regional chains that we love. So anyway, I don't need to preach to all of you about the value of retail relationships and building those relationships and in even social situations, often the best way to do it, because Justin, and I are joined at the hip on that conversation. But anyway, so here we go in the new year into the new year 2024. What are the trends that you're watching, in your space tech consumables retail,

Justin H. 02:52

to the Gosh, a lot of momentum going into 2024. I mean, if you look at the numbers around consumer sentiment, just and most geographies is very strong, interest rates expected to come down in 2024, for it, looking at things like inflation of input, input costs going into producing product coming down. So it's a really interesting setup going into the new year. Also retailers, most of them have resolved their supply chain issues. In fact, as we talked about, I think on one of our other episodes that some retailers ended up with too much inventory. So they're working through some of that, as we go into the new year, of course, technology will be a big topic, especially at NRF in January, and we can talk about some of what those technology topics will be or topic areas will be. But I think it's gonna be an interesting, interesting focus in retail going into next year with a lot of expected growth and different channels.

Wendy 03:54

Now, one of the things that we've been seeing, though, and it disturbs me some is that even though on some of the measures you see, you know, the improved confidence sentiment, there's just this sort of underlying concern. We see in our all our How America Shops® work from shoppers, we saw it leading into the holidays, and we're still seeing it, as you know, we move into 2024 about the sort of “just in case” even though the economic indicators, you know, the sort of bigger economic indicators look so much better. To your point, that people still feel prices will go up, rightly or wrongly, they feel they won't come down, which is probably true in most places. They feel they've got less disposable income that's having had an impact over the holidays. And so, this is sort of sentiment versus reality in some ways, but you know, sentiment is reality when it comes to shopping for a lot of things. So that's the worry. You know, I have we see you know, businesses in better shape you know, the macro-economic indicators in better shape. Sure, but. All of this other stuff. So, you know, from your perspective, how do we balance that out? And how do we use tech technology to understand it better?

Justin H. 05:14

Well, I highlighted a lot of the economic indicators, you're right on the consumer side, you know, prices are still very high for grocery, for example, you're still seeing trade off to private label and grocery stores because of that cost. And, you know, what you can buy for the same amount of money is less right in grocery today. Same thing with like fashion, apparel, travel, there's quite a bit of say, inflation or higher costs. And that, you know, that limits to what you can actually do right with your with your budget. So I, you know, I'm not the expert on on all of the metrics, in terms of, you know, performance, but I will say there's no doubt though, you receive how the shopper is making decisions in the store. And what's interesting is like, if you look at premium, that's a very different case for that shopper than I'd say, the majority of others that are struggling with some of the high costs.

Wendy 06:10

Yeah. And what what I find interesting about all that is, with the with the kind of data and analytics we have now, I mean, the breadth of it. And the ability, you've been teaching me a lot about, you know, AI and generative AI the ability to analyze and personalize. It seems to me that in many ways, with this sort of yin yang mindset going on, that we really, that's where better data and better understanding of the consumer as shopper, really comes to play here in being able to deliver what people want, when they want to, you know, at prices they can afford. So am I being you know, is that is that too much of a leap now?

Justin H. 06:57

I think it's interesting point just in that even in the last couple of weeks. So you know, I spend every day with meetings with retailers and consumer goods brands, and the interest level now on things like personalization on ecommerce or marketplace sites that, you know, it's not a new topic. But it's been coming up the curve very quickly, because of the power of some of the new AI models that can help drive engagement, drive loyalty, drive interactions, drive basket building. And so I, I do think that the tech part of this will come into play in terms of solution options, and also in like, in what you do running an ecommerce platform, both on the retail side and the CPG side. Actually, I don't think I'm already seeing it. So like that, I think that's interesting, because like I said, personalization is not new. I'm surprised at the number of companies I've met with that have not deployed personalization 101, either in the contact center, or through email, or chat, or direct mail. It's amazing. So I think that's one area that will definitely help this next year. Yeah,

Wendy 07:58

I just feel like that's that moment that we really have to know consumers and shoppers better, if we're going to encourage them not just to say, Oh, I'll go, I'll either opt out, and I won't buy stuff, or I'll just try and find the cheapest price I can, that if I really know who they are better and what their interests are better, then I can really target, tailor, provide solutions and value and then, you know, get them to buy more

Justin H. 08:29

Sure. Well, there's also a proliferation of platforms on what you can sell now as a brand or as a retailer that has product you I mean, think about the way that you if you're on Instagram and you see an ad buy, it'd be really interesting to look at the numbers of which platform and where decisions were made around product and because that is certainly multiplying. And being in behind that is are model is to recommend right to you as a potential purchaser of those products or to try out new products and with product reviews. So anyway, there's a lot that goes into that.

Wendy 09:00

Yeah, and I think when people are more cautious about how they're spending and is the product going to work for them, not just on basic consumables, so does, you know, whatever snacks, things like that, but on on new things, you know, that search, that recommendation becomes even more important than to, you know, whether it's seeing somebody on TikTok or Instagram and then buying or just influencing them, you just see all of that we see it a lot in health and wellness work that we're doing where people are searching everywhere for information because they're not getting really what they want. And it's very time consuming. So, you know, you've sort of inspired me a lot to think about well, digital in this in that in that in that vein, so anyway, so other other things that I mean supply chain important

Justin H. 09:49

or supply chain, so an underlying theme, you know, at NRF and going into this next year is going to be all the AI discussion. And I think we will see it in a couple of weeks as we look around and everybody is going to be an AI expert. And so it'd be interesting to see which companies are deliberate about their strategy for generative AI, specifically, AI, but generative AI, and then what are, you know, putting that to the side or not jumping in and testing it, as we've talked about on other episodes is a game changer and disrupter and, and a real potential value add in terms of the you know, the old days of seamless customer experience, well, generative AI can superpower that so as I mentioned, to see how companies are using that, we're gonna hear all kinds of good examples of it in the next couple of weeks in the next couple of months. And that will really power a lot of energy behind that, and that is supply chain space or customer experience, right? Yeah,

Wendy 10:48

it's interesting, because I had on just recently Maly Bernstein, who is the CEO of Blue Mercury. And she was talking about, not just her specialty beauty formats and new formats she's opening and all of those things and customer experience, she was really talking about the role of AI and generative AI to support her teams. So they could provide a much more personalized service and have time, not only by knowing who her shoppers are better, but also to give her teams, you know, the ability to be better educated faster, and deliver content and serve their customers more. So for her, she wasn't just designing new, lovely stores with new innovative product, she was actually thinking about the role very quickly of how all of this would play in delivering the experience

Justin H. 11:44

totally Well, you're right. And there's as much people and process changes the technology that's behind it. So like you what you're really talking about too, is people's roles will change. And we expect that to happen, the vast majority of customer experience or customer facing roles with our customers, because they the speed to getting information or getting access to or doing some of the menial tasks that you may have been used to even on the you know, for example, images or text and whatnot. I mean, like, that's real today, like, and so your role is going to change to, you're going to be getting faster to the point where you can do something with information, do something with images, or video and whatnot. And I think that's going to really be interesting to see how companies shift, right how people shift into that skill set and understanding and how it also will disrupt some of the support companies, agencies, consulting groups that do work for our retail and CPG brands. Yeah.

Wendy 12:33

And I think that that's actually that, that makes me think a lot about a conversation, we've been doing some work with a CPG client, and in also in the beauty space, but we've been talking about a big global beauty company about what the future of retail and beauty retail will look like. And helping them think about that. And one of the things that struck me is, you know, even though this is a gigantic company, and has put a lot of emphasis behind ecommerce and digital, they still don't seem as many don’t to connect the story around the consumer as shopper, and they a little treat ecommerce as its own channel. I'm like, it's not

Justin H. 13:18

it's just another way to buy your product. Right? Right.

Wendy 13:22

Yeah. And all the digital tools that, you know, we're now talking about, we've said to them, you know, it's just the underscore enabler of everything. So if you're not thinking about that through the lens of the shopper who's already using everything, then the sort of silos just gets exacerbated in this new world. So I don't know where you're seeing, are you seeing specific companies or categories, brands, good product categories, or retailers who are doing a better job at this naming names or not? Or it's, there's still a long way to go on a scale of one to 10. So

Justin H. 14:02

for some of you that haven't been in retail for long, just a little bit of history, so many retailers, you know, they have their stores and their systems that support those stores. And then they launched ecommerce, and they were like, Let's put that over here. Because we don't know it's kind of this new thing. Well, now it's a new thing, obviously, years later, but it's it built, it's built on other systems, so many retailers struggle, even just 101 trying to get single view of like performance and operational understanding and then be able to make decisions. Okay, so, therefore, what we're seeing quite a bit of, especially, I'd say in the last six to 12 months is on the retail side, especially, an interest in moving to more flexible commerce, b2b and b2c, by the way, commerce platforms that first of all connect across channels, regardless of whether it's a store it's a website, it's a mobile platform, it's fill in the blank right? But also allow you the flexibility to choose best of breed technologies to leverage so whether it's a contact center solution, whether it's a text solution, whether it's a personalization solution, whatnot, you can have a more flexible, flexible ability to map in and out new capabilities. So there's a lot of work happening in that space. It's called composable commerce for those that want to be looking into that. And there's many companies blooming and growing in that space. And again, at NRF, they will all be there.

Wendy 15:28

Yeah, no, I think that it's gonna be I think it's going to be called the National Generative AI Federation, maybe this year 2024, the big AI show when it

Justin H. 15:42

will be better there will be, you know, ecommerce platform players, there'll be the supply chain. A lot of companies are looking at new different ways to manage their supply chain. And yes, back office operations are frustrated with the inflexibility of legacy platforms. I mean, and within flexible platforms are now moving very fast to write a problem. So there are other players getting into that space. It's there's a whole tension playing out around that area.

Wendy 16:06

Yeah, I think that's really exciting and you have tempted us tantalize this last episode, I think there'll be some use cases that will be revealed, oh, I'm eager to bring It on live, where you're around,

Justin H. 16:19

I'm going to show you that a bunch of great demonstrations, you know, in production, not just generative AI, but a kind of new tech around virtual tryon around visual supply chain anyway, more than a couple of weeks. Yeah,

Wendy 16:35

it's interesting. I just made me think quickly, before we wrap up, one of our clients from the UK, retail clients is coming in. And, and one of the things that we're really talking about is, you know, how do you enhance, you know, experience customer experience with, you know, better, more flexible technologies, so that it's everything from supply chain to all the way of how you interact with the consumer/shopper, you know, in the in the buying experience?

Justin H. 17:09

You know, one thing that generative AI did this year, is they brought the business into the conversation of digital and technology and analytics and data. And you know, this isn't, there's the oh. IT has got that you guys, let me know, when you need something. I mean, my challenge to everyone that's here that might be on the business side is don't lose the energy that came from kind of the generative AI excitement, you know, that that brought together the business and it like, there's so much power in that and so much power that that came, it has come from the conversations we have had with a roomful of business and technology leaders, it is so different than when it's just the technology team, or just the line of business teams, that would be my challenges. Keep that model because it's so powerful in differentiating.

Wendy 17:55

Yeah, yeah. And, you know, you just reminded me, there's another client of ours in the healthcare space on the on the manufacturer side, who, you know, has just picked up this the responsibility for for, RGM, so this sort of growth management. And I said to him the other day, you know, this whole area of cost saving, as you think about how do you add value, but also how do you take cost out of something, you know, the ability that think about these kinds of technologies, as you evaluate how you're delivering goods and services, and then creating value and price point. This seems so exciting. But you're right, we, we all jumped down there, oh, look at this chat, we could get on chat and create whatever wonderful, you know, we could create wonderful, you know, new new novels that we always wanted to write in a second or something or books, but actually, there's so much there in that space that can help people as they think about growth and revenue, manage, and all of that. So, lots, lots of excitement. Um, last question, what's your best shopping experience this person, a real person not? Amazon will say shopping. Do you do any shopping? Of course it’s Amazon, I want to push your Amazon to the side, other than on what other fabulous shopping experience? Oh, horrible. Did you know?

Justin H. 19:19

So I have a worldwide team. And so I've had a chance to spend time in a number of different geographies this year. And the first theme I would just say is the stores are booming. I mean, crowded, busy, you know, with it with an obvious investment in stores, you know what I mean? You're seeing physical store, take physical store appearance, the experience really stepping up. In terms of like a great shopping experience that I have had. I would say that the some interesting ones or when I'm working with a retailer and I go shop their store before I go meet with them. Don't you think this is 101 and some of you don't do it, and I'm telling you, you need to do this. But if you're gonna go meet with, let's see Neiman Marcus, you should go to their store and spend time in their store ahead of time. So what I what I really enjoyed this year was of this we're working with so many different retail brands was going to their store and just kind of seeing what they're doing at the tactical operations level talking to the people there. And, and really seeing the interest and engagement and investments that retailers are making and then being able to kind of validate that with their teams. I know it's not a shopping experience. But that is a shopping experience for me is the see it kind of come to life on both ends

Wendy 20:42

from Yeah, how I never understand how people walk into a meeting. And we're having somebody

Justin H. 20:51

watching this that does this right? If you're worried I'm here to let a Carter's is right across the street. If you're going to work with Carter's, you go to a Carter store before you go with garters,

Wendy 21:01

right, and look at them, and pick up the price, you know, all of those things, which seems so basic to us, and watch the people buying and talk to the people on the floor. And first of all, it brings it all to life, which is wonderful. You know, it's not just intellectual, you know what, pablum. So I'll tell you my best because you didn't. We took a group to look at retail on our Retail Safari®. And so we're in New York. Two, neither will surprise you. One is the continuing consistency of REI, the outdoor mountaineering climbing, the people the pride, they hire the right people who are proud to not only talk they're experts, they'd love to talk about their latest climb, hike, whatever backpacking and their, you know, their eagerness to get you engaged in whatever way you want, which I love. The other was the Lego store, which just continues to blow my mind. There two young Japanese women personalizing little figures for themselves and creating little things. They were so engaged as well as little tiny kids who are, you know, building things. And, and it was just to watch those two experiences, one kind of we've seen a lot and then the other to different totally different categories. But you look at that level of engagement. And you go, yeah, it's fine.

Justin H. 22:39

think it's, I mean, you, we've talked about this before, too, but you've got your business on the doing the Safaris and really introducing customers to retail and helping them understand like the nuances of it right? Let's walk in let me explain what's happening around the store. The store you know

Wendy 22:56

why they walk like a walk at like a consumer that you are before you put your work hat and then you intellectualize things and forget the basics of Hello how are you come in may I show you. Anyway, whatever I'm preaching to the converted I know that thank you for this as always, we will have I know you're going to be up to your ears in NRF but we will as we will be juggling our various and sundry so I'm eager to see all what dazzles you at Amazon.

Justin H. 23:25

I'm going to give you a whole tour of what dazzles me and yeah, week so looking forward to that it's

Wendy 23:29

gonna be really, really exciting. And then we'll have more to talk about

Wendy 23:37

As we segue, so Anyway, happy everything happy, wonderful 2024 for all good things, looking forward to playing seeing with you. So see you in the future. Thank you