Wendy 00:09

Hello, I'm Wendy Liebmann, CEO and chief shopper at WSL Strategic Retail and this is Future Shop. I'm here today after way too long at least a month with my partner in all things. Cloud digital AI, Justin Honaman, Amazon Web Services and guru of all things amazingly cloud based.

Justin H. 00:35

I am also a chief, I have a chief shopper at my household so I can be also chief shopper like you. And it's great to be back with you.

Wendy 00:45

Be my guest, I always love to have other people who are chief shopping with me, and especially if they pay for me that's even better. And after that, so we've had you and I an incredibly busy last month or so between National Retail Federation Europe, FMI. In Florida, I was at Cosmoprof in Florida and the National Association of Chain Drugstores Regional Chain Conference. It is that time of year, when we left off, you said there was so much going on at NRF, National Retail Federation and Big Show a lot around technology a lot around AI, even some maybe case studies and I thought, tell us a story about what you saw there and what stood out for you and what we should be keeping an eye on for retail.

Justin H. 01:33

All right, great. Well, so it's so good to be back. The industry is off to a very fast start. And I do think it's different. This year, it not only it doesn't just feel different, I've seen it different daily with customers in both the retail and consumer good space for those that haven't met, lead up that area, from a go to market perspective here at Amazon and AWS. Yeah, very fast start. So when we when we were talking about NRF, I really was thinking back in q4 that it would be all generative AI. And it wasn't. It was there and a big topic. But I was I think the thing that stood out in my mind was just the intense focus on stores. And in store experience, loyalty, customer engagement, physical store technology is what we call it at Amazon. When we want to dive deeper, and like we've got people in our stores, and we're growing stores, and we're closing stores, and we're trying to ramp up loyalty programs again. And retail Media Network. I mean, like it was it was fascinating. Yeah.

Wendy 02:41

It's interesting to me, because I got two sides of that story. One was what you're saying the other people, particularly global retailers, who we met with, who said they felt this, it was very tech oriented and not and operational, and not very consumer shopper centric, and that there wasn't much discussion about what was going on with shoppers, what was going on in the sort of broader economic. And so while there was a lot of retailer discussion, it was more about how can you use the latest technology to drive more efficiency and things like that.

Justin H. 03:21

If we had met up there in person on the floor, you would have said, Wow, I see a story here of, of engagement with customers, the retailer's customers of the retailer, owning that relationship and understanding customers in a new and different way. I think you're exactly right, though, in terms of my sense from seeing many of our partners and others there that it was heavily Tech, I don't know that I was surprised by that. Because I mean, that show is really much more tech heavy show than others, like grocery shop or shop talk or, you know, some of the RS events and whatnot. So I'm not surprised by that. But I think for us, it was showing this Unified Commerce view of physical and digital and in the crossover, and making sure that you're doing the best job possible to create a good customer experience. You know, if Bridgette

Wendy 04:18

Yeah, no, I think and I must say that piece to it. And I'm sorry, we didn't you know, that was sort of conflicting. We were being pulled in different places, right.

Justin H. 04:27

If mobile, I'd take all responsibility, vocally self critical.

Wendy 04:32

No, no, no, no, it wasn't your fault. I had more meetings off the floor with retailers than I did on the floor. Because it was so hard to you know, if you were with a retailer, they were you know, people were fighting to talk to them, right. So it was one of those. But But what was interesting to me is absolutely what you say this whole piece now of how do we use it to make you call it the customer experience? Absolutely. But the the less friction that we're But in terms of getting what I want, when I want and the right thing I want on my, you know my own terms. And so that felt like there was a lot more of that going on. We had interesting conversations and as I say, two global retailers who are in my mind, one was talking about with a pharmacy driven proposition. How do they use technology more to free up, you know, the pharmacist to do more advising, consulting, building more custom solutions around healthcare issues? healthcare needs, so there was a lot of that conversation. So it does feel like it's all of the new tech, generative AI, anything else that we're thinking about is quickly being tested, experimented with on lots of different levels? Is that some of the things that you are seeing now you've been talking about that for a while?

Justin H. 05:55

So I think a recap this on one of your other episodes, but I'll do the 22nd version for those that may be listening for the first time. From like, March of last year till August, it was every day all day. What is generative AI? How does it what is AI? What is ml? We're just generally I fit in? Why should we care? This is like bored CEOs, like, not the CIO, like they were there too. But like it was across the business in retail, and consumer goods came in around August, September, that shifted into, hey, we're testing now we want to try some things out, we're using these models and learning about prompt engineering, like, you know, these types of things. And it very quickly now we've seen just as expected, in the end of the year, a lot of really good tactical use cases or examples of where this is coming to life. And then we're also seeing this being built into some of the products we use and some of the technologies software, the service products that you all might be using, naturally built into that. So there's really those two different angles that we're seeing pull out play out very quickly. And then I always get the question anything that's like game changing, like it's driving incremental revenue that's blowing the doors off. Not quite yet, like, but a lot of good, like efficiency plays, you know, better access to information, faster images, like unbelievable, the image quality you can create, you know, ecommerce listings, you know, the coding, like there's some really good, strong use cases that are out there now. And we just had our customer advisory board call literally an hour ago. And I didn't even plan for that to be the topic, it happened to become the topic because it but the discussion was more about like setting up. Do we set up a COA or not? Like, how do we do governance or not? Like, how do we who's going to own that? Is it in the business? Or is it upper corporate anyway? It's very interesting. Yeah.

Wendy 07:48

And how how the degree of the nature of the questions of how to do it, not just Wow, isn't that fabulous? Interesting. Two things have come up in my world in the last few weeks around this one, which was quite simple, but really quite dazzling in my mind. So at Cosmo prof, which is the largest global beauty show in the world had their first event in Miami. Normally, they're in Europe, Asia, Las Vegas, they did their first Miami event, bringing the South and Latin American beauty companies, retailers, brands, whatever. Anyway, I and my team went to one of the sessions that was in Spanish only. And I you know, there was a QR code, you downloaded the QR code when you went in my to Allie and Elia, two of my colleagues, didn't realize that, so I walked in a bit after them, they're sitting there. And I'm thinking, wow, they're impressive. They obviously speak Spanish, I have no idea. Well, they just didn't know how to do the QR code. But that aside, so I have my QR code went onto my phone and this automatic translation instant. But the thing that was most interesting about that, because I could do that with other apps, obviously, was the generative side of that. And that was first passed, translation of a sentence was sometimes a little when they made instantly, instantly it corrected itself. And you had a much more correct, relevant, whatever. And that to me was just, you know, just a day to day speed of learning was really quite extraordinary.

Justin H. 09:32

Yeah. So that you and I talked about this. We, for those that don't know, the Emerson Industry Day, is an incredible event put on by Scott Emerson and his team. And I was presenting at and you know, the night before we're talking about this and like, I was putting some additional material together on this topic and it just kind of like, you start to see some use cases you're like, Okay, that's real and like that is what somebody does today. Like that is not will change, like it will change like today. So I mean, and that's going to continue to be the case for many roles, you know, think about analysts, business analysts roles were served and evolve. We've talked about the role of agencies and whatnot will shift and evolve, and whatnot.

Wendy 10:15

The other thing that's an effect, I thought of two examples. The other thing, even this last week ourselves with a new tool, we have color shopper performance index, Devin, who runs that was showcasing I had asked him a couple of questions in prep for a client meeting. And he'd gone through all the data and he and I, what I realized was the good use of his toy, he pulled it together, and a lot of AI helping behind the scenes. But then we really spent the time thinking about what it all meant, you know, what are the implications of that for this category at this retailer, what are the implications? What are we not seeing? So the ability for us to use our time better? In the thinking, not just the doing was really, really, really powerful, which was great. And the last one, I'm supposed to be interviewing you. But of course, this is all in my head. I was at my dresser yesterday, getting my lovely natural red header. And the owner came up to me and because we're always talking about retail, and he said, we were talking about what's going on in the economy. And he said, You know, sometimes he gets a lot of pressure of late from his investors to say, you know, why aren't you getting rid of more the people are at the front desk, and using more digital tools to do all this. And I said to him, listen to me, at the price of this haircut. That said, you better have a lot of personal service, you can make it easy for me to get an appointment, you can make it easy for me to check in. But you better be having somebody bring me the carpet. And that sounds like a princess. But it is that conversation, where do I save money? Where do I use digital to do that? Or where do I and free up people? So they are my three? In real life examples of late so enough for me FMI? What was what was the conversation? FMI? This is the Food Marketing Institute for those of you who don't live in that space, same conversation.

Justin H. 12:16

No. And, and so it was so strange. And if you've never been to either of these or both together, you may not, this may not. But walking out of NRF, like three or four days of like these back to back to back to back to back to back meetings on everything on those topics we just talked about, right? Not just AI installed on and then stepping into the FMI midwinter event. Okay, first of all, the audience is completely different. Okay, these are commercial sales leaders from the major consumer goods brands, these are the major, you know, leaders from major retailers that work with those brands. There's lots of one to one meetings and interesting content around it. Okay, so that's the setup. I don't think anybody is there from it, like, maybe a couple people. So like, you know, shift, you got to shift focus in terms of what you're talking about there. And it was interesting, right? To gauge where the business people are, were the business leaders on these topics. And I'll tell you, the big theme, I would say is innovation and growth, top line growth. Whereas last year was a lot of cost, takeout cost savings, cost optimization, still sorting through supply chain, you know, both on the retail and CPG side, a lot of interesting growth and innovation. And I think we'll see some M&A this year or look with small brands. But that was my big takeaway from that. Now, as it relates to some of the tech topics we talked about. engaged and interested. I'm not sure if that group is feeling and sensing the realities of it yet, because it's still coming to life.

Wendy 14:07

So that's interesting. And then I went to the this is not travels with Justin and Wendy, but you know what, the January, February it is. And then I went to the National Association Chain Drugstores Regional Chain Conference. And what was interesting about that was that it was it is smaller chains, regional chains, it's become quite even though it's drugstores. It's become quite food, focused food as in grocery retailers because they have pharmacies, obviously and clinics and things. What was impressive on several fronts was almost the combination of those two conferences you and I were just talking about NRF and FMI. It was VP, SVP retailers, regional chains Hy-Vee, Meijer, Publix, Wegmans, so that group, obviously manufacturers as well supporting it, quite a pharmacy health care focus, because it's drugs NACDS. But lots of conversation about healthcare services. How do you Yes, on the one hand create efficiency with new technologies? But on the other, how do you enable the pharmacist, the tech, the front store people to be delivering a better experience. So I do think a lot about the regional grocers in particular regional drug as well. But regional grocers who seem to be much more focused through necessity of needing the technology to support what they're doing, but also enabled to do that, because most of them are still privately held like a Publix or a Wegmans. You know, Hy-Vee is owner, employee owned. Meijer, still, I think private. So all of those things made it a very different tone, almost the sort of convergence of what you were talking about. So very interesting,

Justin H. 16:02

as little sidebar for all of you that are listening about these events, it's like, well, you just go to these events and have a bunch of dinners. I mean, like, if you want to win in the industry, with with industry leaders, you've got to be where the industry leaders are pure and simple. You can't be dropping in and dropping out, like, you know, these brands and retailers, whether large and small are looking for people investing, and looking for people leaning in with ideas and not hoping for some quick transaction. And so, you know, I hope that's you all, if it's not, I figured out a way to be at some of these, because you can learn more in two or three days. And you can learn in a year reading email newsletters, okay, sorry. Um,

Wendy 16:40

no, I think I think that's really important. And I do think you and I talk about a lot, because we're on the road a lot. But you cannot beat it, you just cannot beat it, I heard one of the CEOs of a very big consumer sales organization sort of taking to task I think I was supposed to be the conduit of the message, some of his insights and category team people, because he said, All they're doing is sitting at their computers, and they're not out in the stores, they're not understanding what's going on, they're not meeting face to face anymore, we're behind a screen. And I mean, he's preaching to the converted with you and me. But I think to your point, I think all of and even to see my best AI experience, right, sitting at a meeting, listening to three people speaking Spanish, and actually knowing what that guy was saying,

Justin H. 17:26

Let me build on your point now on so some of you may not realize that we work with the vast majority of brochures worldwide. And that may come as a surprise to some of you because Amazon owns Whole Foods and Amazon Fresh, but it is the case. And and so it's an interesting view, we're many competitors, by the way, run on AWS and whatnot, which is part of that conversation, if you're interested in that reach out, we're happy to share with you. But um, you know, an example of that is just the last couple of weeks, I met with a grocer who doesn't work with us. And, and at the end of the meeting, we have six workstreams of things to follow up on that include everything from retail media networks to customer data, and how to better manage that data and to use it for loyalty, or to leverage it for loyalty and driving a loyalty program to layouts of stores and planograms. I mean, like. So I really do see a lot of the operations side of retail leaning in and looking for new innovation and ways to do things more efficiently. Cost is a certainly a huge issue right now in grocery price being passed down from the brands who the retailer and then the retailer trying to not pass it on to customers. There's a lot of tension in that space right now. And so anyway, those are some of the things that just have been kind of front and center. I'll say on that on that part. And you're right on the healthcare part is becoming really big conversation with not only like the, the the retail stores where you might find a pharmacy, but grocery and pharmacy, you know, of course, what we're doing in that space. And even more broadly, you know, it's really a topic that is picking up a lot of energy and interest. And I think there's a lot of opportunity to better serve in customers in that space. And that's what makes it interesting.

Wendy 19:15

Yeah, well, to your point, you know, Dollar General, I think was Dollar General was talking a lot about their retail media network the other day, it was $1 General. And then on the other side, Walmart announced they're going to be doing mammograms and hundreds of their stores with a partnership they're doing. So there's just so much going on in the retail space that I think is really compelling. And to your point about Amazon and healthcare. Having just as I mentioned, you spent some time with the Amazon OTC team this week. And I think just you know, looking at the upcoming NACDA Annual meeting where some of your pharmacy team will be there. I mean, a lot of people converging in that space again, so the tech piece the how that's informing everything from retail media to healthcare, delivery, all of those things. I mean, it is it is hugely exciting. And I hate to use the word disruptive, but hugely disruptive. Right? So no wonder you're on the road all the time.

Justin H. 20:16

Yeah, you know, this whole idea of innovation and new tech, and the word disruption. They, they do go together. And it's my challenge. So people want a good example, I was spent a day this week with a bunch of food scientists, and everyone in that sector, from recipe generation to product development through personalized meal. meal planning is a great space for AI. Like, I was like, you know, guys, let me just walk you through a couple of things like half the people in that room, the roles are going to change are already like, in but that's okay. Like the ones that were there? Like, I'm in like, what, what do I learn? Like, what do I need to what do I need to learn? And that's what's exciting about it is there's a real interest in upskilling.

Wendy 21:00

Yeah, and I think that's where you and I left off last time and, and will continue to, because I think that's the role that we all play in this new and really stunningly exciting world. I can't believe I'm discussing between my hairdresser and the, you know, GI to GI, upper GI now translate Spanish

Justin H. 21:20

my haircut only cost like $14.99 when I have a coupon. So I mean, you know, that's pretty good.

Wendy 21:27

Yeah, but your natural, fabulous color mine. Of course, I always say my hair cost more than just about anything else I'm wearing today. So I better get my coffee and personal service, because I'm not putting up with a box for that. Thank you. Anyway, on that note, hopefully it will not be quite so long before we capture this because there's a lot more to talk about. I also do think some of the some of the work you're doing in the food and beverage space, which is obviously one of your areas of expertise. We should put that in our agenda for next time because there's so much going on in that space as well.

Justin H. 22:01

A lot of innovation in subcategories are really interesting.

Wendy 22:06

Yeah. So that's that's on the agenda next time everyone. For a breath we always tried to do this in 15 minutes. It never works because so much to talk about. And we just do so. Justin Honaman, as always, thank you and see you in the future.