Shoptalk, the largest conference for retail and ecommerce, descended on Las Vegas last month. As noted on our blog recently, Blueport attends the conference every year because of the unmatched access to leaders and thinkers in the retail and ecommerce space. This year’s version of Shoptalk drew 8,300 attendees (over 5,000 in 2017) and executives from brands like Macy’s, Target, Nike and Amazon sharing their insights on retail and ecommerce innovation.
At Blueport, we love “fun facts”; in fact, we close every morning standup meeting with one. Here are my favorite fun facts from Shoptalk:
- Retail is…growing? Yes, it is! Retail grew 3.5% over the last 10 years, faster than U.S. GDP (2.8%).
- Retail growth is happening with two types of retailers; premium retailers added 109 store locations between 2015 and 2017 while price-based retailers added 263 stores, according to Deloitte Consulting. Balanced retailers in the middle are being left behind and are shrinking!
- Voice search is increasing its impact on shoppers; 24% of households have a smart speaker like Amazon Echo or Google Home with 42 million expected to ship in 2018.
Beyond the fun facts, many important insights surfaced at the conference. Here are four that I found most relevant to furniture and home furnishings:
As part of a retail insights panel, Matt Fassler of Goldman Sachs shared his opinion that retailers will succeed by being optimized showrooms or optimized logistics machines. The good news is that many furniture retailers already have beautiful showrooms and efficient delivery fleets, giving them a head start on both of these paths to success. The next step will be to bridge the business intelligence gap by collecting and using customer-provided data to make both the store and delivery experience better. In the store, this means data platforms that can provide salespeople with intelligence on what a shopper is interested in before they walk into the store. For delivery, this means easy scheduling and clear, consistent updates on when furniture will be arriving.
Another theme of Shoptalk was the impact of visual discovery on the shopping process. A number of leaders in the furniture and home furnishings space are making it easy to start a shopping process with images instead of words. Pinterest’s Lens visual search tools allow users to match images they pin or pins they discover with shoppable products on the platform. Technology companies like Clarifai are using artificial intelligence to match user-generated images with products, making it more likely that a visual search will yield a relevant product result.
Seeing the strides that companies are making in visual search left me bullish on its potential and the growing use of artificial intelligence for marketing. Artificial intelligence is unquestionably a buzzword in marketing today and is, in my opinion, being defined a little too broadly, encompassing everything from product recommendations to deep learning by computers to identify images. Amidst the many definitions, however, there are many success stories of marketers leaning more on data and automation to drive results. For retailers who are just starting out, data and machine learning can be most effective as a way to uncover the underlying reasons for shopper behavior. For example, what marketing channels are most likely to drive a shopper to your site looking for leather furniture? The data and the analysis tools are readily available to capture those insights and drive immediate optimization of your marketing mix and ecommerce performance.
Augmented reality continues to grow as a meaningful shopping tool in the furniture space. 59% of consumers responded favorably to shopping for furniture using augmented reality according to research by the Consumer Technology Association. Adoption of AR is buoyed by Google’s latest augmented reality software development kit (SDK), ARCore. ARCore is usable on over 200M Android devices, a significant improvement over Google’s previous augmented reality platform, Tango.
Wayfair, Lowe’s and Houzz all showcased their individual augmented reality experiences for home furnishings at Shoptalk. In the case of Houzz, their augmented reality app drove an 11x increase in conversion for shoppers who use the tool. Despite the increased engagement, retailers still struggle with the time and monetary investment in 3D modeling required to provide an AR experience. Once manufacturers and retailers catch up on modeling, AR technology has the potential to scale even faster.
Virtual reality is not entirely out of the picture. Macy’s CEO Jeff Gennette announced plans to introduce virtual reality experiences to 60 Macy’s Furniture Gallery stores as a way to expand available assortment within their stores. The key for virtual reality as a shopping tool will be how fast headsets can get into shoppers’ homes. With Facebook rumored to be launching their Occulus Go headset next month for $199, next year’s Shoptalk might showcase virtual reality shopping experiences happening at scale in shoppers’ homes.
For me, the most important takeaway from Shoptalk was how all the technologies we have been talking about for years – artificial intelligence, voice search, visual search – are becoming much more tangible with real examples in-market as we speak. Shoptalk is an invaluable resource for keeping up on these trends and developments. I’m excited to see how much further we go at Shoptalk 2019.