In this episode:
Wendy Liebmann talks to Justin Honaman, head of Worldwide Retail & Consumer Goods, Go-to-Market at Amazon Web Services, and worldwide segment leader for Food & Beverage.
- Immersive retail, the power of personalization, frictionless retail and where the Metaverse is already having an impact
- The role of the physical store, and the impact AI can have on curating more meaningful shopper experiences.
- Retail media and how, if done correctly, it can deliver a “triple win”
- How to develop and execute a Consumer 360-view that can drive loyalty – not just discounts
- How retailers and brands are behind in the cloud journey and the urgency to catch up
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Watch the video episode:
Hello, everyone. I’m Wendy Liebmann. I’m the CEO and chief shopper at WSL Strategic Retail, and this is Future Shop. This is where I talk to kind of class disruptors, big thinkers about the future of retail. Today, I have a very big thinker. His name is Justin Honaman. Welcome, Justin.
Hey, it’s great to be here and good to be with you. What? Twice in like three weeks. So it’s great. Thanks for the invite.
It’s a luxury right? Well, let me just try and paraphrase what the heck it is you do. And then you can tell us a little bit more. I’m going to read this because it’s quite a convoluted title. Justin, as the Head of Worldwide Retail, and Consumer Goods, Go-to-Market at Amazon Web Services. Tell us a little bit about what that title actually really means that Amazon
I lead our worldwide retail and consumer goods go to market team. Yes, I sit within AWS, Amazon Web Services that I work with. And my team works with the vast majority of retailers and consumer goods companies worldwide that engage with an interface with AWS and actually broader Amazon. And the big idea is how do you bring capability systems process and thinking around innovation to these customers to help them go further, faster? Like that’s the bottom line of what we’re here to do. I also am the segment lead for food and beverage 10 years at Coca Cola and quite a few years since that time, in consumer goods and retail, and we engage together in the industry. And so hence how we connected a lot of good connection points with you and our networks.
No, it was exciting when we first met. And of course, the first question out of my mouth is always Oh, come on the podcast and have a chat. So I’m glad we got to do this so quickly. You know what struck me when you were talking about the sort of broader view that you have going to think about you in the cloud, right in the not just the Amazon cloud. But in the world cloud of all things consumer products and retail you published just at the end of the year, early this year, you’re thinking piece on what the key trends were for 2023. And I was taken with them because it’s a unique lens. I mean, it’s got a very strong digital perspective to it. So I wanted to pull out a couple of those and just have a chat about it, because I think you bring that compelling view. But one that first hit me, which is sort of the hot new topic of the day is retail media networks. And so my question to you is, is it all huff and puff? Or are we really somewhere in these things that are retail media and networks? Are they adding value to shoppers not just monetization for retailers?
Yeah, that’s a great question. So just to give your listeners a little bit of context, every year I write a piece for RS News on trends and retail for the year. And it’s a lot of fun. Because it’s a prospective piece. It’s an idea that puts ideas together around potential focus not only on technology, but process and people thinking about the industry for the year. Yeah, retail media networks is definitely what it would make the buzzword bingo card for 2023. And it Israel. There are real solutions around it. But it’s not just I’d say buzz or you know, a concept. The idea here is using instore messaging, basically dynamic messaging to allow brands to reach consumers and in somewhat of a one to one fashion right and with trade execution dollars with spent with that retailer to put your brand in front of a customer or shopper in near real time. So it’s very unique because as you know, when retail stores is typically put a display in or put signage in or put an a shipper in, and it’s there for a period of time, but it’s not dynamic, right? It’s there for a set period of time. And a purchase. I’ll call it by a consumer goods brand. And so what’s interesting about this is it’s a more dynamic way of allowing consumer goods companies to work with the retailer to reach the consumer. So that’s what’s really interesting, and yes, I think we’ll see more of it.
I also think done, right? That whole notion of personalization using the retailer’s data, assuming it’s good data, to be able to, sorry, excuse my cynicism, but good first party data and other I suspect, but able to target more effectively, what I’m seeing as a shopper and not just seeing the sort of mass as you said, the mass static display presentation message because I think that’s the thing that that feels to me like it’s where the excitement is. If the message feels right to me at that time, then I can respond appropriately rather than just walking by to the clutter kind of thing.
Yeah, I think it’s like a triple win. So it’s a win for the brand, let’s pick a Kellogg’s or a Coca Cola or PepsiCo or the major brand or small brands even right, that don’t typically have access to one to one consumer data or shopper data, they have to get that through a retailer or through like, they have to buy it through Nielsen, or IRI. So there could be a win there for the brand in terms of being able to reach the customer work dynamically, the second win would be for the retailer, right? So the retailer is now going to monetize that space. So it’s an incremental revenue opportunity for the retail shop owner, I’ll call it. And then for the actual shopper, like you and I that are in the store, I can have faster access, potentially, to coupons to buy gets in store, or just awareness of new brands. I think that’s another interesting play for retail media networks. But all of this comes down to data, and you said it. So like who’s going to own that data, and then use the data to serve up and or kind of curate that presentation of content. And that part, I think, is the part that you know, that’s where you’re seeing some of the technology players try to play a role. It’s interesting,
I spent actually, myself and several about team we spent last week couple of days facilitating an event with one of the retailers and their newly formed retail media network of about a retail and media team, so far, 14 people, and soon to be even more, so from the ground up. And it was fascinating, because our role was to remind them that actually what they do in the end has to deliver value to the shopper. So not just okay, we want to put an ad here or push out a coupon here or whatever. But actually, if you don’t bring value to the shopper, stored online, whatever it is, then you can charge the vendors that for a long time, but the shopper is going to get pretty annoyed about the over whelming amount of clutter in their brain. And I say, so it was really interesting. And what we actually did was one of our retail safaris, we sort of facilitated a day. But then we took them into places, not necessarily competitive type stores, places that were using different in person, digital and physical tools to engage shoppers. So we went everywhere, from banks, to museums, to regular stores to see how they’re actually engaging. So it was it was interesting on several levels, one that there were 40 people who didn’t basically exist in the space, you know, six months ago. And just the focus, which I thought was impressive on. Remember, we’ve got to bring value to the shopper.
Yeah. And we’re still early days. Right? What’s interesting here is, you know, back to your first question, it’s it is real, and there are real solutions for it. But how do you deploy it in a way that still fits with the brand set in the store? You don’t? I mean, there’s still fits with how the experiences are you want the experience to be in the store? So I think there’s some work to be done there. And then how do you use the data? And also, on the consumer product side, you’re probably going to take some dollars out of your trade spend and put it here. So like, where does that bucket of money come from? Is it net new dollars? Or is it you’re shifting money from other typical buckets where you might spend trade dollar? So I think that’s going to be interesting to see how that plays out.
Yeah. And actually, we accosted I’m always shopping to pick them the store, shoppers and others and we accosted a CPG fellow who was in one of the stores and said, What are you doing? And he said, Well, it’s an add. And I said, Oh, lucky you because the brand people were going to have that budget, and he was going to keep his trade spend. And they said, Well, I’ll talk to you in a few months cynical Wendy, let’s see what that looks like. But anyway, but you’re right question to be asked. Yeah,
it’ll be interesting to see.
I think that’s true.
Like, yes, the retailers are hoping it’s an end, additional income stream that’s those retailers will be hoping for that.
Of course, always and right. We love them desperately. But it’s always an add. The other thing you talked about, and when I first read it in the piece you wrote, I misinterpreted because you talked about immersiveness. And I immediately thought, oh, immersion, oh, this is where I walk into an amazing physical space. And I can smell things and taste things and see things and touch and feel and all of that. And then I realized you’re actually talking about more digital immersion and the infamous second word for the bingo card. Metaverse, right? And other things. So again, Metaverse, yes, no, come in, go going. Who the hell flip the coin. What’s the story here?
Okay, so yeah, immersive is another buzzword for the year and parts of it are real. So in the definition of how I wrote about this, I talked about personalization. I talked about AR and VR, which are real. I talked about virtual stores virtual try-on, which there are some great examples of those out there and 3D images is really taking new life now for E commerce shopping. Even virtual stores for consumer goods brands like you could have a store without having actual store where you could curate products for a consumer or a customer to buy. Okay, so all of those things I mentioned are real and evolving. And so what we have seen over the last 12 months is a real shift back into immersive experiences in store and online. So the things I just mentioned, most of those are ecommerce or online technologies. And like the thing you said at the beginning around the look and feel and smell and layout and design and like checkout technology, there’s a lot of work happening around the store again, in store, like it’s very exciting. And so on both sides, there is this whole idea of immersive and like experiential focus around the guest or the customer Metaverse, very exciting topic. I always ask groups that I’m talking to to how many of you are testing this? How many of you are using this? How many of you are not going to think it’s not gone down the list? The jury’s still out in terms of how to use it in a constructive and profitable way. A lot of experimentation happening around it. I’ll tell you in lots of technology partners making up solutions for the metaverse, so I’d say it’s still in the a lot of companies are experimenting, investigating, looking to see what others are doing. That’s largely what I would tell you is happening on the retail side.
So two things there. I’m going to do the metaverse first and then remind me about checkouts. Because I’ll forget I know I forget that. But on the metaverse thing. What’s interesting to me, we just finished some of our latest research, How America Shops® research, we called Plan Disruption on the shop of planning their own disruption and disrupting everybody else’s life. And we saw about three out of 10 people report there in the metaverse with some considerable regularity. Three quarters of them are there every week, you know, doing lots of different things. Some of it’s got a gaming, you know, whatever. What I found really interesting about it was actually what they were doing there, and from a shopping standpoint or beyond gaming directly, but some of them were doing things like buying clothes for their avatars, I get that, I want my avatar looking fabulous in Nike or taxon or something. But the other was concepts, which I thought was really interesting, speaking about experiential, as well as immersive, to be at a concert. And the other couple that I found were interesting were exercise classes. So I had sort of the Peloton, Lululemon kind of thing and thinking how useful it is I do it on my bike now in some ways I do not but others do. What does that look like? And then the last one was pets, anything pets, which I found talks to a lot of different things, of course. But I just found the usage beyond the sort of obvious to that relevant, value oriented.
I think it’s really interesting because this is where you see capabilities come together that bring together digital or marketing and technology. And it’s part of what has driven the real expansion and explosion and cloud capability in retail and consumer goods. And for the most part like retailers and CPG brands are behind in the whole cloud journey. But that has accelerated the last year, year and a half because of an interest in focus on some of these new capabilities and solutions.
Yeah, I mean, I can see it being a fashionista in my own way. You know, I can see that ability to be part of a fashion show, feeling like I’m there loving music being at a concert, things like that. So you can, it’s important not to dismiss it. At this point in time. I’m thinking you’re saying the same thing on all of that, that to the other technology in terms of the Mercer checkout. Of course, like other retail specialists, Chief shoppers, I was in the first Amazon Go store in Seattle, you know, it took me aback, I’d actually my last trip before the world closed down in 2020 was to was to Seattle, and I went back to the Go store. And in that first store now there was a maybe it was there the first time and I forgot because the line was so long, and there was a liquor department. And the thing that was interesting to me was it was manned there was a fellow in the liquor department because he had to check my card. Nice of him, check my card. But it struck me in two ways. One is I love the idea of go, I love the idea of walking in checking out feeling like I stole something but knowing I didn’t have to even bother, right, it’s me. But when I noticed in the store, I don’t know if it’s still there. But with the liquor department, you still had the ability to talk to somebody. And actually if I talked to him about wine and said, Oh, these are all Washington State wines or these are Oregon wines, why we had this fabulous conversation. So it was this amazing blend of you know, click and go. And yes, but if you wanted to, there was somebody to talk to and it felt so right. So I don’t know how you feel about all of that with all the checkout technologies and some of the things that are emerging but all here
well, so Yeah, another space or another word for everyone’s for focus this year is frictionless, right? And when we talk about checkout technology or checkout function, the idea here is how do you take that part of the shopping process and make it simpler, easier, less friction, right for the guests in the store. And so hence why you’ve seen a real explosion or a real investment in for companies in new technologies, new ways of checking out and whatnot in store. So with Amazon, yes, there’s Amazon, ghost stores, some of you have been to. And the way that that works in the Amazon store is you scan a QR code on your amazon.com app, it opens the door. And computer vision and sensors on the shelves will allow you to build a virtual basket of products or no basket and put it in your pocket. And then walk out when you just walk out. Hence the name, your credit card is charged for your Amazon account that that’s the case in an Amazon Go store or an Amazon Fresh store, for example, our grocery concept. There are also other retailers though that use the just walk out setup than their store. So their store, it’s called a store kit. And in those cases, you could use Amazon one which allows you to validate with your palm that’s linked to a credit card, or use just a credit card to enter the store. And then again, build your virtual cart and just walk out and your credit card is charged. So that space, there’s a lot of new interest in it and checkout, but also other parts of the store. If you go to one of our fresh stores, you’ll see Alexa devices and you can say hey, Alexa, where do I find the low fat, Jeff peanut butter, and it tells you the aisle and the shelf number and you’re instantly right. Amazon also in the Whole Foods stores and a select Whole Foods source and select fresh stores as new dash cards where you push a cart and scan product, put it in your cart and just walk out. There’s a lot of innovation happening around the store. It’s an exciting time in retail, it’s exciting time in store as much as online. And I think we’ll see a lot more just across the industry in terms of investments. One thing though, in order to make a lot of this work and putting tech in legacy stores, and retail is the infrastructure, so you got to have, you know, the bandwidth and the capability to support new technology. So where you see this really happening is in retrofits and new store build outs.
And that is one of the things I mean we know as shoppers right, we go into a store, before we did this immersion the other day, as I mentioned, we made everybody download any of the apps any of the things they would need from where they were because we were in there in a space that had very good Wi Fi. And then because we knew that, you know, you walk into a store and you’re trying to look something up, or you’re trying to you know, whatever. And it’s exactly what you said that the infrastructure is not there. I do recall, it is interesting, because I remember I think one of the first AmazonFresh stores in I think was Silver Lake or somewhere in Los Angeles going into and you know, loving the idea of I can say okay, you know, what will I make to dentists? And I click here, Alexa, I shouldn’t say that too loudly. Right? Something will go on in the house, and we’ll hear everything. But that whole piece and then thinking about novelty versus usefulness? And how does that help me in all of that? So I think you know, as you say,
That’s right. For example, though, if you had like one interesting thing. On the new dash cards, if you have your shopping list, there are like a shopping list of use before you’re logged into the retailers app, for example, it could save you time it could show you things that you’ve bought before also show you like what’s on sale or coupons are available. So there is a mash up of digital and physical that I think is coming in store. And like I said it’s really exciting time to be in our industry. Just the last couple really a year or two we’ve just seen an acceleration and investment in innovation.
Yeah, which is exciting and leads me to the next piece that you wrote about on that we’ve been looking at a lot is the role of the store. So there was that, you know, massive Oh my heavens and stories dead you know, all of that. Then we went through the pandemic and we realized the only person we ever talk to was the frontline worker at the drugstore at the supermarket, right? They were grateful when my AmazonFresh did not get delivered or whatever, don’t let’s have not, won’t have that conversation. I’m not blaming you for the ills of the world with an eye on it. But that whole just sense of the store we know in our life, at least long ish life, that most things don’t go away. They just keep evolving or revolving. And what I think is so interesting is again, in some of the work we’ve done this whole focus on the role of the store and to your point, one of the things we’ve seen in this new work is you know the fact the store becoming kind of Discovery Zone again, you know, I can get so much of the basics done, online delivered or pick up at the curb, whatever, get it off the list and then now’s the time. I can go if I’m looking for something new. I can go into the store and hopefully it’s well merchandising all of that. But that, to me is an interesting evolution of the store beyond the you know, I’ve run out of milk quickly run in, I can’t get my delivery in two hours.
Agree, it’d be interesting to be interesting to watch loyalty. Also, you know, we haven’t, like loyalty programs have had their highs and lows over the years. So I think that’s an area that keep an eye on I didn’t write about it, and but it’s one of those things I think is worth watching. Because you’re gonna have more and more data on the shopper, like the retailer is gonna have more data on the shopper. So like, what can they do with that data that’s unique and differentiated and can create a better experience. So I think loyalty will be something to take a look at this year to relate to this whole in store experience.
And I often think about the way retailers have talked about loyalty, particularly mass retailers, not to dump on them, but is that it’s been more of discount loyalty, you know, it’s been more about okay, I know you bought this, well, maybe, you know, yes, you’ll buy that. And it’s all about Here’s a coupon, Here’s a coupon, rather than, you know, that whole picture. And it sort of talks to where you got to when you talked about, you know, consumer 360, you know, I’m happy to share my data, I’m happy to share my information, if you give me back some solutions to things and please take it off my brain out of my brain. So I don’t have to remember that anymore. So I think that whole piece and I can’t think what was it called Amazon dashboards, the thing on the fridge that told you you’re out of whatever, milk or something, that thing, p&g did something with it at one point, but you know, those sorts of tools that say to you, you who, Wendy, you’re going to be able to milk in about two minutes. And you know, if you don’t have milk for your coffee, tomorrow, you’re going to be really crappy. So that integration of all of that data that you’re talking about that we’re seeing come to fruition now, that feels like delivered in the right way, I as a shopper get a much more personalized experience that could build my loyalty to whomever. Am I reading that the right way based on your view from 30,000 feet?
Absolutely. And that’s why also you’re seeing more technology enablement around personalization. So what you might want to buy if you have bought this before, and beyond that, using artificial intelligence and machine learning about what your buying patterns are, you’re seeing more and more curated experiences with the that running in the background. And that’s only going to increase what now that you have better technology to support it.
Yeah, I was thinking about that the other day, because heaven forbid, sorry, I actually ordered from Fresh Direct in the city because they were the first step at some point. And what always annoys me is they give me my list, right of everything I bought, and the last whatever I can reorder from my list, but they haven’t reminded me is you haven’t bought this for three months. And this seems to be your usage pattern. Don’t forget, I’m like, that’s really annoying. Why don’t they do that? So you know, that sort of now I expect a lot more from them than just showing up on time kind of thing with all of that. So there’s no question to that. I’m just venting because, you know, I just have you here. And I can vent on all of that. The last piece of all of this. I mean, obviously, there’s so many other things going on. I mean, you talk about supply chain issues and things throwing up, you seem very optimistic about where things are headed in terms of some of these macro economic issues and technology issues. Did I read that right?
So I’m not an economist, I will just say that we’re seeing a lot of investment and interest in innovation on the consumer goods side and retail side. And CPG companies have really been focused on supply chain the last two or three years. So and you can see, there’s not a lot of innovation, but where the innovation is on that industries and the new upstarts, the new food and beverage brands, the new makers of small consumer products. And so there’s a lot of excitement there. And energy. on the retail side, like I said, last year was a lot of, hey, can you help us with inventory, visibility, and help us even with delivery help us get on technology, so we can run some of these things we need to be running? And I’d say the last six, eight months, six to 12 months? It’s then and now it’s like, what about immersive experiences? What about frictionless checkout? What about using computer vision in the store? What about leveraging data analytics in new in different ways? So the conversations have shifted,
that there was so many logistical pressures on people over the last couple of years that we see. That’s why I think we’re doing more and more of our Retail Safari®, people want to get out either we do them virtually, and we show them what’s emerging around the world virtually, if they can’t get out, or in a market. Let’s go. Let’s go and look at things around a topic or an issue, as I said the other day. So you see that we’re sort of getting out the interest in looking at the new and solving problems in innovative ways, which I think is is the really encouraging piece. That’s also the sort of recognition of there are a lot of issues that we need to address. So let’s get to it. and move forward, which I think is encouraging between retailers and manufacturers coming together to solve, in some ways, bigger issues, whether it’s health and wellness, whether its purpose, sustainability, all of those things bundled up. So I’m with you, I actually think that, you know, when you lock us away for three years, and we go through terrible times, then hopefully that spark is still there to be encouraged. There are a couple of other things on my list. One is, you know, of course, the infamous AI Chat GPT, which everybody seems to be like, Oh, my dear, all the school children now will never write a report or a summer holiday, something without going on to ChatGPT, right. So there’s like, oh, the world will fall apart. I’m like, okay, all right, seven, another thing. So that’s another topic at hand. Right. But that just talks to more AI and different learning? Is that how you feel it? Or are you like, Oh, my heavens, the world is about to end.
The proof is what you just said, it’s been amazing how fast that topic has run around the last couple of weeks, weeks. And so yeah, I think be interesting to see, like, early days, and we’re dealing with new and different technology that no one has really dealt with so or had to think about how to leverage. And so the question is, like, on things like that, and even some of the other technologies we’ve talked about, like if you’re a legacy or major retailer, how do you balance the new shiny object, but also potential value capabilities with the fact that you’re sitting on old ERP systems that are expensive to operate? And they’ll change? You know, how do you think about customer experience with some of the new these new personalization capabilities? And in the immersive capabilities, right? How do you think about that, when you are balancing that with some of the operational challenges of getting inventory and sourcing and whatnot. So definitely good to keep an eye on what’s happening in the market. And then in what you’re seeing is from the retailers that are doing it? Well, they are looking, they’re investigating, they’re experimenting, they’re trying things that are days and weeks of testing, versus months and years,
Are there retailers around the world, or CPG companies around the world that you think are really doing interesting stuff that we should all kind of lean into and think about?
there. Yeah, there’s a lot of great innovations happening in the industry. There’s no like, one shining star, you know, for everything. But when you think about it, like for example, some consumer goods brands have really jumped in around like this whole connected factory idea and using data analytics across factory in an understanding and being able to drive better decisions. An example of a customer on the retail side that was not happy with their own point of sale systems, they develop their own 4000 stores in Carter’s. And if you listen to the CIO from Carter’s, tell that story, you’ll see they said, I’m not finding what I need here, I’m gonna go build it in a flexible way, and then roll it out. And it’s working very well for them in so many different ways.
What you’re saying here, as we look at what we call Future Shop, and the future of retail, this is a moment, this is another moment of many, but a moment when there is huge opportunity and the ability to think about these things and innovative tests, trial and start refine, stop, go again, from product new talked about small brands, and the opportunity in the CPG space to develop new products that bring to market you know, through so many different types of media, the impact of social, I think all of those things, you know, as well as the role of the story and all of this. So it’s certainly to us. And I think that’s why you and I agree on most of this is that there’s just this is a moment there for people to really engage and define what their future looks like, or at least test what their future looks like, and keep testing and testing and going. So I think that’s the exciting piece. I will say one last thing to you, which has struck me of late, which is in all of this the role of people and I mean that particularly in the role of people in store, frontline people we learned that through the pandemic, but the people who are the brand at the store level, we were in Cincinnati doing some other innovation work with retail and CPG clients and the thing that stood out to me beyond the amazing Ocado distribution center robotics was the people who staff REI or the store manager at Five Below and these people were so passionate about what they do and love what they do that you realize that’s still old world laying out of hands makes a difference. So in your digital world, your view from the cloud, you have the same sense of that or
you know, here’s what I would say yeah, I was just thinking as we were talking only two plus years ago the the hot topic was stores are we’re going to be closing how can we drive revenue we’re having to shift to all ecommerce because people aren’t going to stores and, you know, oh my gosh, and we were counting store closings, if you remember. And here we are now, February 2023. And stores are opening, not they’re open, but they’re growing retailers are investing in experience and in store and online. E commerce is level above where it was pre COVID markets are still opening around the world that we are going to see impacts from. And so my only thought and when I talked to customers, like make sure to be thinking about how do you first don’t go back to the old way of siloed work, but also position yourself to have the flexibility to spin things up and down and try things that pull back on things more quickly in the future. So give yourself some of the flexibility to operate differently because you don’t know what will be the next thing. That’s the way I’ve been thinking about the go forward is it’s great that we’re celebrating a lot of growth and new experience things and innovation is just 100% make sure to position yourself for flexibility in the future. Well, that
is a perfect wrap up now. I don’t even have to do a wrap up because you just did it as I knew you would. So I thank you. I feel like you’re my new best friend, which is really lovely. So
I am I’m all in I no I am thrilled
come along on this journey right of redefining the future or testing our way through the future. So thank you for this Justin. It’s really been a pleasure.
Yeah, I’m looking forward to doing it again in the future. Thanks, Wendy.
Indeed. Look forward to seeing you happy travels, as always, see you in the future.