In this episode:
Wendy Liebmann talks with Andrea Leigh, former Amazon executive, and founder of The Allume Group, an ecommerce education community, about the future of commerce.
- How lifestage and lifestyle needs coupled with new technologies mean that shopping is now a passive — rather than an active — activity.
- That “always shopping” has impacted loyalty to retailers and brands
- How digital shopping can create opportunity to shop in physical stores
- The emerging challenges for Amazon, and how specialty-oriented retailers are winning
- The impact of omni-commerce and the critical need for seamless shopping
- The “revenge of the stores” as shoppers, especially older ones, move back to physical retail, and
- The critical distinction between saving time and faster shopping, and the investment implications for the future
Don’t miss upcoming episodes, stay up-to-date by visiting the WSL Shopper Insights Library, or our Podcast page.
Hello, I’m Wendy Liebmann, CEO and chief shopper at WSL Strategic Retail and this is Future Shop. This is where I talk to innovators and disruptors about the future of retail. Today the topic is digital shopping 4.0 Amazon Walmart the metaverse and what the heck comes next? I have the perfect guest for that broad sweep of the universe. She is Andrea Leigh, an ecommerce educator, writer, advisor, entrepreneur with over 20 years of ecommerce experience 10 years as a senior executive at Amazon, and drumroll she has just launched a new company, The Allume Group, a brand new fresh and shiny education community providing ecommerce courses, strategy, certifications, and community for ecommerce professionals. Everything all of us need these days. Hello, Andrea, welcome to Future Shop.
Hi, Wendy. Thanks for having me.
It is a pleasure. It struck me when we were planning this that I think actually I have seen you more in person than anybody else I know in the world. I mean, this is stunning in the last Seattle in October, right? Yes in person well virtual somewhere around the world in Emerson Industry Day but then in person at a roundtable in New York a couple of weeks ago then in person at the Chain Drug Review MMR Retailer of The Year in New York, and then Las Vegas for Shoptalk. That is amazing.
Well, that’s just because I’m your groupie and I follow you around everywhere, Wendy? Well,
it’s a mutual admiration society, because I feel if anybody is educating me about the world of ecommerce and digital shopping, it is you so it’s great to have you join me today. Thank you for doing that. So here we go. I mean, am I correct in suggesting that we are now in an era of what I’ve called 4.0. I mean, this, it felt like first it was Amazon and books. And then there was Amazon and The Everything Store. And then Amazon embarking on traditional retail in new ways versus Walmart. And now as I look at the world, I think we must be in this sort of 4.0 world. Is that right? Or are we further along or not so far, along.
But I think if you follow any of the teachings of Dan O’Connor and the Future Commerce Initiative, he would definitely say that we’re in the fourth generation of commerce, and coming out of the third generation and entering the fourth. So the third generation being marketplaces, which would include the likes of Amazon and others. And where marketplaces being places that bring buyers and sellers together but more platforms than retailers. And definitely entering the Generation 4 of commerce, which is sort of this interconnectivity between, I guess you could call it omni channel, I think is the the most popular word, but I think we’ve had some discussions and maybe prefer something else. They’re omni-commerce or something like that. But I do think that if you kind of go back to the shopper, they’re definitely in a stage where they are in always on shopping. So they’re shopping while they are reading the news. They’re shopping while they’re browsing social media, probably some folks shopping while they’re listening to our podcast today. And so shopping has become more of a passive activity versus an active purposeful activity So we used to make lists and go to the physical store. And we would choose from what was available to us in the brick and mortar aisle. And now we are just shopping while we’re doing everything else. And I think that change for the shopper definitely brings us into a new generation of commerce where we are consuming. I think the light latest study I read was about an hour and a half more per day of digital media than we were before the pandemic. And some of that’s pandemic driven. But I think some of it’s just not it’s just how we’re sort of interacting with others and with retailers and with information and media in different ways. So I think Generation 4 it’s about what the retailer landscape looks like. But that’s also a reaction to what the shopper behavior looks like. And that has evolved quite a bit in the last few years.
Yeah. And it’s interesting you say that, because as you know, my metric is always if you want to see the future, follow the shopper. And that sort of lens of we call it always ready. Then we saw this as far back in our researchers, oh gee, around about 2017-18 as the world just expanded, and we did some work for one very large retailer who kept talking about them busy families, and then still wanting to do everything under one roof, one big shop. And we said they’re busy. And actually they’ll buy it anywhere they happen to be because that’s more efficient for them. And that really seemed to change the mindset of that retailer thinking about all the ways to engage with the shopper
and the assortment you need to have because I think I heard this on one of your podcasts or maybe I read it in one of your reports, but the this idea of like buying something because I’m there, the reason that like a Home Depot might sell toilet paper or Tide Pods or something is because I’m already there. So I might as well pick up this like highly consumable item that I use a lot rather than make a separate trip. I think the other thing we’re seeing with shoppers over the last couple of years and partly driven by the pandemic, and lack of availability to products is just a lack of loyalty to any one particular retailer or brand. You know, most shoppers are shopping across multiple ecommerce platforms at a minimum, and probably across many more brick and mortar retailers as well. And that loyalty is kind of changing based on availability, and just time and feelings of safety and all those things.
I think you’ve hit the proverbial nail on the head when you talk about time. And that sense of time, even before the pandemic, really changing the way people thought about how they spent that time. I mean, again, you’re right, we’ve seen and our work people saying I want to get my shopping done quickly so I have time for other things. Now, other things might have actually been shopping, but different kinds of shopping. So how do I get things off the list that we don’t make anymore, and just get it done? So then I can choose to immerse myself and everybody could see us we’re both in animal print outfits today. One is I think more I don’t know what yours is. Mine’s leopard, I think but yours is something else. Fabulous. But anyway, sorry, not to distract you. But those things that we want to do as opposed to the things that we have to do. And then that universe, right?
Absolutely. And I think Target shared something really interesting on one of their recent earnings calls, they said that of the customers that do the buy online pick up in store, or curbside pickup, 60% of them, get the curbside pickup and park the car and go into the physical store, which I think is incredible. It’s incredible for Target because they’re able to capture that shopper engaged with them through the physical store environment and also capture all the impulse purchases that normally go by the wayside when a shopper is shopping, either ecommerce or BOPIS, or any click to buy format. But I think from the shoppers’ perspective, it’s ideal. No one wants to spend time shopping for toothpaste, let’s get all of that taken care of go until
the Crest people Yeah, well, or the Colgate people. But anyway, aside from that, sorry to interrupt.
But I mean, those are taxes on all of our time. And if you can take care of that really quickly through a click to order model and then Target’s extraordinary because they have such a great in store experience, but then actually go into the store and to your point, kind of spend time engaging in the ways you want to engage. I think that’s an incredible value proposition. Yeah.
And it is interesting to even when you talked about marketplaces, I remember when Walmart added GAP to its marketplace originally. Now it’s also in the store. But I went browsing GAP, it was homewares. There I was spending all this time on the GAP marketplace at Walmart, I’m stunt, I probably wouldn’t have spent that much time in the store. So you’re right. It’s just where do I want to spend my time? And how do I use this sort of plethora of places that I can go shopping in this digital 4.0 world? Thank you, Dan O’Connor. To really think about what this evolution it’s not even a revolution anymore. It feels very much like an evolution at this point. So then, if we think about that, what’s the implications for the big river? What’s the implications for Amazon in all of this? I know you and I talked a little bit before about coming off this lackluster quarter with disappointing profits. What does that say just a bad quarter? Or is that the competition has now ramped up? And there’s lots more going on here?
I think it’s both Wendy. So it was a bad quarter. If you just look at their cost structure versus their revenue, they spent the last year or two really selling into a cost structure and a fulfillment capacity that they didn’t have yet. So they were overextended. Right. You know, we all experienced kind of longer lead times and an out of stock products and all of these things. And some of that was due to manufacturing shortages, but a lot of it was due to actually Amazon’s own network. So they’ve now caught up in terms of they have doubled their capacity within the last two years. That’s incredible. Their physical footprint was enormous before the pandemic, and now they’ve doubled their capacity. And this was the first quarter where if you just sort of look at their P&L their revenues were over their fully realized cost structure of actually serving that kind of revenue. And so meant a really difficult quarter for them. And without Rivian would have been a terrible quarter. But I think the interesting thing that’s happening with Amazon, to your point, they grew only in the single digits for the online and physical stores. So the year over year growth for like the retail or commerce part of the business was very, very low. But the growth was really realized more in the services side of their business. And so on a quarterly basis I like to track their percentage of revenue that’s services versus online and physical stores. And it’s about 50:50 now, and it was about five years ago, it was about 20% services and 80% commerce — by services I mean Amazon Web Services advertising, seller services, Prime membership. Just like all of the things that are not shoppers buying, basically physical and digital products. And so I think it’s really interesting to see how their business has changed over the last couple of years, and they are becoming more of a services company than they are a retailer. And they need the retail part of the business in order to fuel the advertising platform. And they need some growth there in order to make the advertisers happy. But the smarter everyone gets about attributing some of the retail media dollars to offline sales impact, et cetera, I think it just shows that there’ll be more growth for their ad platform. And they’ll continue to open up other means of targeting shoppers, I don’t know if you’ve heard about, they were in discussions to maybe buy the Peloton infrastructure. And if they don’t get the fitness ecosystem there, they’ll build it themselves or buy a different one, because I think getting access to those shoppers just adds more targeting and more consumers that they can show advertising to. So I do think from a retail perspective, it does mean that Amazon’s job has gotten a lot harder. If you look at the competition at a category level, I mean, you can set aside Walmart and Target because I think they have slightly differentiated strategies from Amazon. And that’s a good thing. But if you look even at a category level, beauty, pet care, etc. There is another retailer in that space that more and more often, my clients are telling me they’re doing more than half of their ecommerce business with so those retailers have gotten bigger than Amazon. And going back to the shopper, they are designing their experiences and tailoring them very specifically for the shopper of that category, which is something that Amazon’s unable to do.
And that’s what I think is so interesting. It reminded me with some longevity, thinking about the days of Walmart when Walmart was the behemoth in the room, and everybody was panicked about how to compete against Walmart. And in the sort of mid 80s, when I got started here, and then you know, through the 90s. And then little by little people figured out, companies, retailers figured out how to sort of slice and dice businesses to compete. And not that Walmart hasn’t remained incredibly successful through some ups and downs. But people do learn where their point of differentiation is. And that’s why I wondered in this 4.0 world where we are now not that Amazon’s going away anytime soon. But the fact that we are at a different moment in that time,
yeah, then I think it’s going to be about who can create the most frictionless experience, because friction has always been a barrier for ecommerce across retailers that are not Amazon. Amazon is a very frictionless experience. They’ve saved your payment information. And it’s one click checkout. But other retailers are figuring out how to do all of those things and make the experience frictionless as well.
And I do think that’s where you start to see the points of differentiation, right. So Amazon being the sort of default position, I need a faucet, I need a pair of sweatpants, I need a light bulb. But we’re others are still trying to figure out how you do returns. If the sizes aren’t right, you have to send it back and order whatever, you know, again, kind of thing. So that frictionless piece fitting when with time fitting in with getting stuff off the list. So clearly an advantage and all of that. But yeah, it does feel like there’s that moment of rethinking all of that as we move forward in this. When we think about the marketplace proposition as I look at it now. And I think about certain categories. How are retailers competing in that world?
Yeah, I mean, I don’t know that any of them are competing as marketplaces super well, with Amazon. It’s kind of hard to compete with a marketplace that has like a 15 or 20 year head start for sure. Just in terms of the quantity of sellers and quality control. And I mean, even Amazon doesn’t have all of that right. And they work really hard on it. But I think that there are some well, I’ll just give you an example. So there’s a beauty brand called Huda Beauty. And so they have a matte lipstick. And at my local Sephora, they have this lipstick and they have it on sephora.com and on sephora.com they’ve done a brilliant job of merchandising it, they have, I think it’s like 1500 some shopper reviews, they’ve got the content just right for the beauty shopper and if I buy it on Sephora, you know it counts towards my Beauty Insider points. I’m also able to choose some samples when I go to checkout and now Sephora delivers to my house same day. They have a courier method that you can choose that will get it to me same day. And I went to try to add this item to my order on Amazon and I found first there were like 50 different listings for the same lipstick. The one that had the most reviews had 42 reviews. And of those most people were saying that they thought it was used product. And I don’t think any of it sold directly by Amazon which is probably part of the problem is is just a lot of third party sellers. But I think when you’re going to spend $30 $40 For lipstick, that’s not the experience that you want to have as a shopper and I think there are examples of this in every single category where the category player is just doing a better job for the shopper and they’re you know they’ve removed a lot of the friction so I don’t have to wait seven to 10 days to get it delivered anymore. Sephora storing all of my Information kind of gone are the days where you have to get up and get your actual credit card, everything saved and frictionless. And so as a shopper like that choice is really clear to me. And I think Amazon has lost a little bit of their shine in being earth’s largest marketplace and kind of having that infinite assortment because it can be a tax on the shopper at the end of the day.
It’s interesting you say that because my last meeting before the world closed down in January of 2020, right, I’ve lost track of those days already, was in Seattle at Amazon. And my mission on behalf of one of our clients was to convince the Amazon people about beauty beyond the algorithm. And that was an interesting discussion all by itself. But as you describe that experience, a Sephora experience or a category that I’m really passionate about ,a pet whatever, or a fitness, whatever ,you understand where there’s the opportunity to deconstruct the power of the big marketplace and the biggest store in the world. I loved actually you coined the term omni-commerce, right? So just so everybody knows, we were at shop talk in Las Vegas, I was moderating a panel and somebody raised their hand and said, “we hate this word omni channel”. That’s not a great term. So Andrea, I’m assuming out of the brilliance of your brain, said, let’s talk about omni-commerce, which seems that much better word. But so in that world of omni-commerce that we now live in, what’s this next iteration or revolution?
Well, first, I can’t totally take credit for that. I heard that somewhere. I wish I could remember where I heard that. But I think we still have a little bit of work to do on connectivity between digital and physical. And I think this is where the retailers that figure this out, are going to win. For example, like, let’s take the younger generation. So I took my daughter shopping at the mall this weekend. It did give me like a lot of I was thinking about it the whole time, how are teenagers shopping, and they’re going to be the future spenders. And there were so many times that we went into stores and the sizing wasn’t available, right? Because it’s it’s hard. You know, there’s some supply chain challenges right now. And so what are some ways that retailers can make that experience smoother for the shopper? Right? Like, can you have an app and scan it and then just have it shipped to your home with one click or instead of having to go get a sales associate, is there a way that you can check to see if the store even has inventory before you engage a sales associate, because there are few and far between I think in the physical stores right now, just with all the labor shortages and inflation, and it’s just really hard to get good coverage. And then I think the other thing I’ve been noticing throughout the pandemic, and now is that a lot of physical retailers are pulling back on assortment. And there’s a lot of online only. And so how do you ever like get that in front of a shopper at Shoptalk, there were some interesting communication companies that sort of manage some of that for the retailers, you know, there’s some text based communication where they’re letting them know of kind of new product drops or online exclusives or things like that. But I think the mode of communication is sort of not as relevant as like having some communication and then having some really strong connectedness between the physical and digital environments. And Amazon really tried to do this, I think with their 4 Star stores, but that must not have worked out for them. Or at least they got the learnings that they wanted, because they’re closing them all up. But that was like giving shoppers a chance to look at some of the digital content while they’re in the store. So they could see the prices reflected real time they could see the customer reviews. So that’s interesting, right? That’s a start. But how do we make that experience more seamless? And where there are not physical goods in the store? How do we make sure that shoppers can still see them? And I haven’t seen anyone do that really well yet. We had a concept store in Seattle a couple of years ago that sold denim. Yes, I remember that store. Remember that? And you could, you didn’t walk home with anything. It was all gallery. So like they stocked like all of the sizes and colors. So you could try it on and make sure it fits. But then it’s all shipped to your home. And I think these concepts no one’s really like cracked it yet. Because I think there’s still a shopper that wants to just walk home with it. Right. But when you can’t, what is the experience? And I think that more and more retailers are faced with this conundrum, because inventory shortages and SKU reduction in stores and all these things. So how do we solve for that?
I think it’ll be interesting with the new Amazon fashion concept that they’ve opened in California, just to see what that looks like, you know, in terms of an Instagrammable moment there, I can go and see it. I can see how it all comes together. How am I buying all of that? But you’re right. I think in some ways to me 4.0 is not so much more and more of the digital opportunity, but it is exactly what does the digital commerce world look like holistically because clearly, I mean, we’ve seen it now latest work, people still want to go into the store. People keep telling us they want to happy store. Now for some people happy stores in stock that made my trip worth it. Sometimes it’s happy because I walk into a Target and there’s the Ulta department store within a store. Those sorts of things people find their own and different happiness. But this notion of my expectation of the physical space now is different because I’ve learned I can shop in all of these other ways. But that Target number you mentioned was also a number we saw at Walmart and in our own work, starting in about 2016-17. The people who just ordered online, went into the car park, picked up their delivery and then parked the car. And it was either because they forgot something, and or, Oh, no, I’ve got all that the chores done. Now I’m going to go and wander through the electronics or the toys, or the the beauty or something where I really choose to spend my time. So that feels to me, like that’s a really important piece for more physically oriented retailers to get right in the coming 12 months. So hold that thought before Andrea, and I continue our fast and very furious conversation. For more on the always shopping mindset and how shoppers are taking full advantage of the changing retail landscape, you know the drill, go to our website at wslstrategicretail.com, where you can access our latest shopper and retail research and find examples of innovative retailers who are getting it right. Now let’s get back to my chat with Andrea.
Jason Goldberg said you can call 2021 the revenge of the stores. Because I shared some data recently from the US Department of Commerce. And obviously, it varies a lot by category. But overall pre pandemic and post pandemic, we only shifted like two points of ecommerce penetration. So we only moved from like it’s around 12% of shopping happening online to 14%. Some categories saw a much bigger shift like grocery, obviously, and beauty and fashion. But overall, we didn’t move a ton more online, I think we got people more comfortable with online, you know, especially some of the generation dependent. But it’s interesting, I actually just looked at another study recently that showed for what generations the shift to e commerce was the stickiest it was interesting. It showed that boomers saw the biggest shift to ecommerce at the start of the pandemic. But they’ve also returned to almost pre pandemic levels of ecommerce shopping, they’ve gone right back to the stores. So two years of like habit changing, I think was not enough, that generation wanted to get back to the store. And you could speculate all sorts of reasons why like maybe more retirees or maybe that was more of a social outlet or an outing or something. But the generation that it was stickiest with, where they saw a shift to ecommerce and then it stayed there was millennials in the study didn’t say why but I have to believe it’s because that’s when you’re sort of at your most time starved, you know, in your life, right? Like you may have kids, you’re probably in the peak of your career. I think that’s a really tough time to be spending a lot of time going to stores and you’re seeking convenience, I guess.
Yeah. And I also think the complexity of going back to work physically. And the sort of part time at home in an office just adds another layer of complexity, particularly with families with kids, and in school, out of school. And that we’ve certainly started to see that in our work that you see, that’s the generation, to your point, that’s not only time-starved for themselves, but often they’re the ones who picked up more caring for friends, family, neighbors, older people. And so that’s why I say that notion of time, as much as money because obviously money is a huge issue. But the notion of time, and the value of time, I think really has tremendous impact on what this sort of universe of shopping will look like moving forward. And you’re right. It’s this generationally different needs different needs for time and choice of how I want to enjoy my life moving forward. And I think that’s the other piece to the puzzle.
One thing I just wanted to mention about what you were just talking about, is that I think this concept of time-starved, a lot of retailers and I think brands to to some degree are starting to mix that up with speed of delivery, being time starved, does not necessarily mean that we need something quickly, there are two different things. There are two different types of convenience, right, there’s the type of convenience where you’re saving me the time of going to the store. And then there’s the type of convenience where like, oh my gosh, I don’t have what I need to make dinner tonight, you know, I need this immediately. And those are two different needs sets. And I think I’ve seen retailers over the last two years just really invest in ordinate amounts of money in this delivery speed to compete with Amazon or to beat Amazon or whatever. And this ultra fast delivery or the speed to delivery ecosystem has received incredible amounts of investment from investors over the last couple of years. I think something like just in the first half of 2021 was like $6 billion directed towards instant need and ultra fast delivery. I think it’s important to remember that these are not the same thing like we’re not solving time starved with ultra fast delivery. And there was a report that Coresight Research did that surveyed online grocery shoppers about like what were the most important factors in choosing the online grocer. And of all of the things they listed delivery speed was six most important it was not number one, there was all the traditional things they have the assortment that I want it is priced appropriately. There is not a delivery fee like there were all these things and then speed was last. So I do think there’s definitely a market for ultra fast shoppers want that. But that is not the same thing as convenience. And I think retailers would benefit from like thinking about those things a little bit separately.
I think you’re right, as I think about that a lot it is that it’s all those terms we use, right? It’s convenient, it’s easy, which isn’t necessarily you think about the lock, right? And what am I saving time for? What does it mean? You know, you’re right, it’s not just Gopuff, that’s going to end up here in 10 minutes with my shot or tequila or something. But it is that notion of the things, as you say, that are important to me, and convenience, and easy are often two very different things. And I don’t know, if you’re seeing that, you know, people even assessing the Amazon delivery, do I need all those boxes, which of course all came during the pandemic. And must I have it tomorrow. My mother in law study of one me was to tell you the truth, I don’t really need prime to get my free delivery in a minute, what I spend my Prime money on is really the media. That does require whatever type of retailer you are a much more nuanced understanding of what shoppers are really telling you when they come and talk about time.
And I think particularly now that we’re in sort of this inventory starved position for a lot of brand manufacturers and retailers, it becomes even more pronounced. So for example, I did an Instacart order a couple of weeks ago, and I rarely order Instacart. I have some other preferences of things I like to do locally here and with buy online pickup in store. But during that hour, the picker was in the store, I got 22 text messages about out of stocks, and could they do the substitution all these things. And that was not easy. That was not convenient. It was fast. But it wasn’t convenient. They met a fast need. But they did not meet like a convenient or easy need. And I think the retailers that figure out, you know where the shopper is, first of all on what I like to call the immediacy continuum. So like, when do I need it? I think usually we need it in three to five days. But there are obviously cases where we need it really quickly. And obviously cases where we’re willing to wait a lot longer. So the ones that can figure out how to get the shopper to self identify that and I think you pointed out Amazon’s making some strides in that area where they’re offering, get it on your Amazon day and save the environment or maybe get like a $1 digital credit or whatever promotion they have running are the ones that are gonna win. They don’t have to spend so much for every single customer, they can only invest in the ones where the instant need is really important.
Yeah. And I do think you know, again, my bias. So you know if the shopper is in the center of your life — is the shopper we always say is the shopper in the room, then you push yourself to understand what do they really mean by that. And I think you’re absolutely right in terms of that continuum. Talk to me a little bit about you know, we had a lot of conversation at Shoptalk about the metaverse and some extraordinary things going on, which seemed like wonderful fun, particularly with people like PacSun and all the work they were doing and NFTs I can’t believe I’m throwing these things out. But this sort of notion of this sort of gaming world gone mad. Where do you see that all playing? And all of this is that media? Is that influence? Is it fun? What is this in terms of our new shopping world?
Yeah, so I think right now, it’s games, right? The virtual worlds are all oriented around gaming. And there’s this really great book called “Reality is Broken”. And this author studies like the gaming industry, and her whole premise of her book, she shares a lot of interesting data in it. One of the data points is that I think it’s like 70% of the population games for like, at least two hours a day, which I may be misquoting that, but it was an extraordinary number. And all kinds of gaming that we don’t think about is gaming, like, you know, playing the stupid game on your phone, or whatever it is, it’s all online gaming, we might not all be in virtual worlds, but we’re engaging in some kind of gaming. But what I’m noticing with my kids, I have three kids that are all like in the 11 to 13 range is that they spend a lot of time in virtual worlds through gaming, or kind of more creator mode. And those virtual worlds to them. And to me, when I’ve spent some time in them are extremely compelling. It’s not like, all of these kids are just like gaming solo, and not interacting with others. They’re on there with their friends. And I mean, I remember my childhood looking a lot different, like we would play outside with all of our friends in the neighborhood, right? That’s what we did after school, it was like almost every day, if you didn’t have an activity or whatever. It’s harder for them. We live in a city, you know, a lot of their friends don’t live nearby. And I think they’re able to access like different kinds of friends from different, you know, stages of their lives and all bring them all together on these servers and in these virtual worlds, and it is really compelling. And I get it. And I think right now it’s gaming, but I think Metaverse and virtual worlds are a vacuum that are very quickly going to suck in commerce. There’s virtual commerce. Now you can buy stuff for your avatars and all of that. And that’s cool. And my kids like that. But I mean, they’re not stupid. They understand that’s not real stuff like it’s stuff they can only access in the game. Although I think we’re starting to see in the NFT world, some of the NFT purchases can actually have utility across different gaming platforms and things like that you can get like power boosts. We have the first NFT Museum here in Seattle. And it’s really cool. These experimentations that some of these artists are doing, where the NFT isn’t just the digital art, it also has utility. So it’s a utility NFT. So you can use it across all these gaming partnerships and get the power boosts. There’s one that’s a glass house, it’s it’s really beautiful video of a glass house that comes with the architectural plans for the house. I mean, there’s all these cool like experiments happening, I don’t think anyone really knows where that space is headed. But kind of back to the the virtual worlds piece, I have a friend that works at Meta formerly known as Facebook. And they’re doing their meetings in virtual worlds now, so they don’t meet on Teams anymore they meet in, I think it’s called Horizons is their meeting rooms and things like that, and it feels real. And it’s, I mean, think about how much more fun it is to do a video call with someone versus have a phone call, you get to really interact and kind of see the person and their reactions, and then make that more of like a multi-dimensional experience. Right. So I think it’s gaming now but it’s coming for other industries, I think it’s going to come for interpersonal connection. Next, I think it’s going to be like more meetings, and we’ll be putting on the goggles and interacting with one another in that way. But I also believe it’s coming for commerce. And I think about the shopping experience of my daughter, this weekend, we went to a traditional mall, it was very, very crowded, probably because most of our stores in Seattle have closed downtown. So it’s all kind of going to this mall now. It was very crowded, we got like really tired and kind of hot at the end. And it was hard to find sales associates and things like that, well, if you were in a virtual world, you could have a lot of the benefits of what we did getting to browse the aisles and try things on without kind of some of the hassles. And so I don’t think it would ever, like replace physical shopping. I mean, ecommerce didn’t replace it. Right? It just took a little bit from everything. It’s like text messaging, it took a little bit from phone calls. And it took a little bit from email. And it took a little bit from in person visits and takes a little bit from everything. But I do think it’s coming for commerce, and it’s gonna be really compelling.
And I think that’s the point that you just made about the world that your kids live in. And you know, we often have this thing about all their game and they’re off. They don’t know anybody. They’re isolated all of this. I remember years ago walking down Seventh Avenue, which was where our office is and seeing one of my younger colleagues, and he was plugged in. And I was like, oh, you know, he’s just not paying attention. He’s not engaged. And of course, when he came up into the office, I said something about that in a smart way, smartass that most of us would say, and he said, Oh, actually, I was just listening to some music that my father had sent me. And all of a sudden, that was a whole different lens to what he was doing, it was something customized personalized from his dad listening to it, where I just saw him switching off. And I think that’s the same thing. When you talk about gaming and the communities and the worlds that people are living in. I think the other thing you said that was really compelling is nothing seems to go away. Just keep getting sliced and diced and people picking one from here and one from there. I absolutely remarked about walking in the freezer aisle of Target not so long ago, some work we were doing around frozen food, the variety of our work. And there on the door in the freezer aisle and the pizza aisle on the glass door was all the ways you could buy that. You didn’t have to come down into that cold aisle. If you want, you could order online, pick it up in store, you could have it shipped to all of those things. And I thought they’re telling me it’s okay. You don’t have to make a choice. You decide if you want to be in that frozen aisle and opening the freezing door or you don’t. And that to me was sort of one other piece about what is this new universe, we’re evolving universe really look like moving forward. And the other thing I’d say to that is the complexity we talk about supply chain now, right? The complexity of a brand or a retailer saying what inventory goes where, what goes there, what goes in the aisle, what goes in the warehouse. I guess that’s why a lot of people are using their stores as warehouses. But boy, the complexity of all of that is really stunning stuff.
Well, and the complexity for the shopper too. So you’re standing there, you’re looking at the freezer door, and it’s telling you all these different ways you can order. And you know, in some ways, I think I do have a little bit of nostalgia for when you could just like put grocery shopping on autopilot. You always went to the same store and you did the same thing. And that’s not the world that we live in anymore. Because if we want to feel like we’re being responsible and you know doing everything for our family that we can we need to take advantage of all these different modes of shopping, but it’s very difficult to put any of them on autopilot. It ends up being sort of this like decision that you have to keep making over and over again. I don’t know the answer to that. It’s just an observation. And I wonder if anyone is doing any research on that.
And I do think through the lens of your 11,12, 13 year olds, when I think about how they will choose to shop, choose to buy, choose to browse in the next 5, 6, 7 years, what will that universe look like? And that to me is always follow the shopper to see the future is always the most fascinating piece. So you and I are going to rope those kids together and talk to them in more detail as you and I promised to do. A last question for you. What’s your favorite shopping experience?
Gosh, well, I’m finding that I’m doing more of my, I guess, like fun or discretionary shopping like non need based shopping via Instagram, and sometimes via Pinterest. And I mean, I used to have this slob embarrassing, but I used to have this process that I collected magazines, I love fashion magazines, home decor magazines, where are they? Oh, I know, right? They’re gone. You can’t even buy them anymore. But I have this whole system. And I used to tear the pages out of ideas that I really liked. And I kept a big scrapbook. And I had it organized by like fashion, and home and all these things. And, you know, really Instagram and Pinterest have replaced those almost entirely. And I enjoyed that type of shopping experience because it was bringing together a lot of different brands and retailers and ideas and inspiration. It was kind of more of an inspirational experience. And I think the only place I really feel like I get that now are on Instagram and Pinterest and Instagram because of the algorithm because it knows me so well now, and Pinterest because of the you know, the ability to kind of create all the different boards and that it does feel a lot like those old scrapbooks that I used to keep. So we’re not
alone in that I really, I do indeed. And then I kept them for travel when I go somewhere tear, those pages that grab the folder, and off you go. I do miss that
it was this tactileness of it. It was so fun. And I had a similar thing for traveling. So I think I really enjoy that for those types of purchases. I’m big on the in-store pickup. I think for me given like what I know about the economics of groceries and grocery delivery, I don’t always feel good about it. I don’t always feel like I’m being very responsible for groceries at least. So I tend to do delivery when I have to. But I’ll often do some of our markets around here or I’ll do buy online pickup. Although now that I’m learning more about buy online pickup economics, like those aren’t great for the retailer either. But it’s definitely better than the delivery. So I think for some of the more consumable purchases, those are my habits,
but to your point a little earlier, the workload, the brain power that is involved in determining what for what, when, and all that you know, plethora of choice. It is interesting, which is when you start to look at retailers like Aldi and Costco where there’s a much more edited but trusted selection. You do sometimes go Trader Joe’s. That’s a relief. You know, I don’t have to think about that too much. And then I can worry about it somewhere else. So maybe Dan O’Connor, actually, maybe we’re in 5.0, I don’t know. I always like to be ahead of Dan. I’m so competitive. So I may for those of you who don’t know, Dan, he’s this extraordinary brainiac who knows all things. I don’t know, digitally based. Actually a last last question. So are you living in the Bitcoin cryptocurrency world already
so I’ve started researching it mainly because I have a friend who is he’s an NFT artist and I really want to buy one of his pieces. But in order to buy an NFT you have to use cryptocurrency and in order to have cryptocurrency, you have to have a crypto Wallet. So last weekend, we went to the NFT Museum in Seattle, which is great because it’s like it’s got a lot of art there but they also have a lot of education about NFTs and cryptocurrency you know, it’s a little bit of like the wild west right now in terms of like making sure you choose the right wallet provider and making sure it’s just a really interesting space. And so I haven’t bought his art yet, but I’m like starting the process to acquire cryptocurrency so that I can buy his art, but I have a friend who’s an art dealer, they’re obviously doing a lot more in that space. And even some of the biggest auction houses are selling an NFT at like the Christie’s sale of the people piece. And so it’s definitely coming, but I think it’s gonna take a while for everyone to get comfortable with new currency. Right?
We’ll remember how long it took us to be comfortable giving our credit card when we bought something online. It was like oh my god now what’s going to happen my credit card. So it’ll be an interesting process. But you’re right, is there a heightened desire, like that piece of art that you really want and that will force you to make that decision right? So I think all of that to come but I trust you to do the homework, please come and share with the rest of us how we should deal with that just as you’re doing with the new Allume Group which is so exciting. So I can’t thank you enough for this. I knew the time would fly by and I can expect to see you in person somewhere again soon. I figure because you’re the only person I’ve seen so often in the last year so coffee in the original Starbucks sounds like a good place to meet.
I love it. Well thank you for having me Wendy and it was great to see you again.
So here’s the thing we are clearly living in Retail 4.0 World. In fact, I’d hazard a guess based on what we’re seeing with shoppers today that we’re in a 5.0 world. And while it may seem uncharted waters, it’s critical to keep in mind that two things have not changed. First, it’s about shoppers. It’s about their lives, their needs and their expectations. Wherever omni-commerce goes, it will be because shoppers lead us there. And second, as Andrea said, nothing goes away. All the new things just keep taking a little share here and a little share there. In the end, shoppers will embrace and transform the shopping world to suit their needs, not ours. As we said WSL follow the shopper to see the future. See you there.