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Shopper Trends|January 18, 2022

Challenging the Future of Retail. It’s right in front of your eyes! with Candace Corlett | EP30

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In this episode:

WSL’s Wendy Liebmann, CEO, and Candace Corlett, President, challenge the notion that companies cannot anticipate the future in these times. The shopper and retail trends WSL identified and has been tracking for 4 – 5 years are now clearly redefining the retail landscape.

They discuss:

  • How powerful shopper movements and new shopper values are transforming retail
  • How new retail opportunities, from live streaming to spontaneous shopping, are adding more complexity to everything from trip management, category management to shopper marketing, and supply chain
  • The level of retail innovation WSL tracks around the world, and how it is inspiring and challenging companies to move fast to the future
  • How, by asking shoppers and retailers the right questions, WSL’s research gets to the essence of what’s coming next

Additional sources mentioned in this episode:

Don’t miss upcoming episodes, stay up-to-date by visiting the WSL Shopper Insights Library, or our Podcast page.

Podcast Transcript

Wendy  00:09

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 who are transforming retail. Today, the topic is challenging the future with a subhead. You can't make this stuff up. I am with my sometimes co-host and always business partner Candace Corlett, who is the president and chief researcher at WSL. Hello, Candace.

Candace  00:40

Hello, Wendy, Happy New Year darlin,

Wendy  00:42

and to you to my girl, it feels like we are already on a roll to 2022.

Candace  00:48

That's the good news.

Wendy  00:49

No complaints about that. And we should, I must say, and the earlier podcast we did a week or so ago, I wished everybody a Happy New Year. And I think we should keep doing that for a while since we will have an interesting year ahead of us. So all of that. But I must say, I was quite riled up the other day, which, as you know, and you could warn everybody is always of concern. But I was especially riled up when somebody you and I both know, well, and respect, said it's impossible to see the future these days. He said, it's all wet cement. And then he went on to say that, you know, all companies can do in this situation is focus on getting the basics right. And that really got me cranky. Yes, I agree about getting the basics, right, always. But I really do disagree with him. I actually think it's lazy, not to force yourself to anticipate the future. And that's not just because that's what we do. Why am I telling you this? But if we don't, we're going to end up in this sort of reverse spiral quagmire of things. So you and I know that it's all based on asking the right questions, staying close to shoppers, to retail and retailers. We also have some unique interpretive techniques and multifaceted view to get to the heart of the answer. So I know we're passionate about the future. And that's why I got riled up about it. There's my intro to happy new year, January, February, whatever it is, so let's talk the future.

Candace  02:13

Well, getting riled up is very healthy. I couldn't agree with you more. Yeah, it may be wet cement. But that's because everything is landing and leaving a mark. You know, I can't think of a time in all the years that we've been doing this, when it was more important to have peripheral vision. Yes, you have to be doing the basics. And now the basics have expanded to the new definitions of Category Management, keeping merchandise in stock, which everyone had sort of accomplished. And then it became a big challenge. And it still is, so those basics, but now added to the basics are making sure that the websites have the same products and descriptions, and price points as the stores, supporting the omni channel, pick up at store, pickup in store, get it delivered tomorrow, those expectations. And then there's the whole real far vision, although I say far, it's not so far out. Direct to Consumer, I am shocked at how many people shoppers are already buying directly off brand websites 50%. And it's not just fashion, I mean, it's filtered down into certainly beauty, vitamins supplements, seems anything that's a challenge to buy in store becomes easier if you buy it direct off a brand's website

Wendy  03:44

and the sort of lack of patience we all now have. Because we have so many places as shoppers that we can buy. I mean, perfect example of what you just said, I was thinking, I walked into a department store to get a MAC product that I wanted MAC Cosmetics they don't have because they say they only have that in the MAC store. The MAC store I wanted to go to wasn't convenient. So I thought you know what department store I'm not going to you did go into an ULTA that also has MAC, they didn't have what I wanted, because it's only in the MAC store. So I was like, That's enough already. So then I went on to the MAC website, I ordered it, you know, I ordered enough refills. So I didn't have to worry about going back or shipping or any of that. But I realized after that there are so many places now that I can buy whatever I want, including the brands website and you just end up creating this kind of portfolio of shopping places for yourself, which is the thing I find the future is here with this fragmented so many places to shop. That was the interesting thing about the new research we've just done that we called, much to our research director chagrin, My Random Shopping Life®, because she said it's not really random.

Candace  04:56

Oh my gosh, it's so random. I mean, it changes every 15 minutes while I go to the store have no it's too cold out, well, I'll stay in or I want to go. It's very random.

Wendy  05:07

Yeah, that new study new How America Shops® study that we did. I was again fascinated by the number of places that people are now shopping on a three month basis,

Candace  05:18

right a 25% increase in the channels, it's not retailers even it's the channels people shop, buy something, not just shop and browse, but buy something in in three months 25% increase. And in fairness, you know, we've had this explosion of deep discount grocery, you know, the Aldis, the specialty Aldi and Lidl the specialty, grocery Trader Joe's and Whole Foods, which had very few stores and now have so many stores and become destinations. And then the websites of brands that are not available in stores, and livestreaming this to so many more places to shop. It's very random.

Wendy  06:01

Yeah. And I do remember the work we've done. And we probably talked about this before, but as we think about the future, and not being able to predict, okay, she's railed again, this notion of what four or five years ago on the work we did for one of the big retailers, and they were all talking about how everybody wants to shop, one big shopping trip under one roof makes life easier. They're busy households. And what was very clear in all our our work that we provided to them was that, no shoppers were willing to shop in many different places. It actually was it did save them time. And as time was a critical issue and remains a critical issue, they were willing to do more rather than less places. And I think that's become even more exacerbated. Right? I mean, what's the livestreaming number that we just saw in that study?

Candace  06:49

Overall, 16% of shoppers have bought something from a livestream event. It's up to 25% among Gen Z and Millennials. Walmart has made such a show of livestreaming. I was just working on something else, and they now have Rachael Ray, Jason Derulo, Drew Barrymore. So they're not waiting to build influencers, although one of my favorites is their Pioneer Woman. They're not waiting to build influencers, they're attracting celebrities who have huge followings.

Wendy  07:25

And so think about that. So I'm now a branded person. And I'm thinking about my media dollars, or my trade dollars. And now I think about that trip, right? Or my category management, how I'm thinking about it. Now I've got are coming into the store on this trip, they buying from walmart.com, or they're buying from Walmart Plus, they're buying from a Walmart livestream, are they at a Neighborhood Market? I mean, now I'm sitting back, and I'm the customer, team lead, or I'm whomever in the organization. And now I'm saying, Hmm, how do I understand that shopper in all their permutations and all their moments of need? And how do I plan for that? I mean, that's, to me, that vision of the future, it's here, we're not guessing anymore.

Candace  08:11

It's like, which is going to land in which spot and the cement has to stay very fluid, because the channels are always moving around, moving around in terms of the importance to the shopper. And you know, it's also confounding the in stock situation, I now have to keep my brand in stock in so many places. And then let's not forget the spontaneous trip, what you were mentioning before about the big stock up trip, I don't know who has two hours on a Saturday morning anymore to go and do the big family shop. I walked through Home Depot the other day. And I don't know why I'm always so surprised by how much they have. I just bought a whole bunch of household cleaners and paperclips.

Wendy  09:01

I knew you were gonna say that.

Candace  09:03

You know, it's right there as you walk in the door. And I didn't even know if I really needed it. But I know I am going to need it. And so now that's off my list probably for six months.

Wendy  09:13

Now that's not new news that Home Depot and Lowe's started to put everything from home design magazines to cleaning products right up the front of the store.

Candace  09:21

But you know, it does define the change in trips, when we have half of shoppers saying I pick things up spontaneously wherever I happen to be. Well, that is a whole new distribution challenge to brands, you have to be everywhere the shopper is

Wendy  09:38

and to build on part of that conversation that some of the smartest retailers and we've been tracking a lot of them. We have as many of you know what we call the WSL list that we build out of our Retail Safaris where we're looking around the world constantly with ourselves and our scouts with all the new innovation that's emerging. I have one been stunned about nothing level of innovation over the last two years, yes, in the middle of the pandemic, but particularly a couple of the retailers that are on our list at the moment. I mean, HyVee, they are a regional grocer out of Des Moines, Iowa, who opened a new store format, which has every aspect of what you were just saying, Candace, I can go in, and I mean to nearly 200,000 square foot store, I can just grab and go, if you will, I can browse and buy shoes and get my nails done, I can get healthier choices, I can be quick, I can be slow. So many ways to shop that are really extraordinary. And we'll post this on our website. So you can all have a quick look at it. But those kinds of retailers who are doing really amazing things, addressing these all these different ways people want to shop today,

Candace  10:48

they're marrying the new and the future with the existing recognizing that in all of our work, it's still a 5050 world, half of people want the digital coupons in their the palm of their hand on their phone, and they want to check out with their phone, and the other half want to stop and chat with a sales associate at the cashier. What you mentioned about Retail Safari, I think this new version of our research, and we've always had Retail Safaris, but we're now using it differently. You know, we are looking around for examples of all the different ways the new distribution is happening. And I was just going through the one on livestream and the number of platforms you can be on to livestream. I mean, it takes a whole infrastructure. Dove is on Supergreat, which is a platform that enables livestreaming. Walmart must be running, I don't know, at least 10 programs a week on its own livestream center, and then stores setting up livestream studios in the back, you have to have a lot of resources put against this future, which is really here.

Wendy  12:07

And that's why I think one of the things as we think about our clients in this and both manufacturers and retailers, when they step back, now you need a different kind of partnership working together. And I was just moderating a panel today, and the two Walmart people on the panel and one of them was talking about and this was really about development of talent of women in their organizations. But one of the things she mentioned was when she realized there was an opportunity to build a partnership across the table with the suppliers in very different kinds of ways now that it couldn't just be the transactional or even category development. Because if I'm now sitting there, and I'm responsible for merchandising in store online, I'm looking at how do I build an audience? What tools do I use, you really need to bring everybody to that table to have that conversation. It can't just be the customer, team lead and the merchant, you need to bring all your resources, not just supply chain anymore, you need to bring your marketing resources, your digital resources, your media resources, to really think about the shopper in the center of this, and how you going to reach them on all those touch points. And I think that's the vision of the future that we are so engaged in now. And looking not only at our own research, our own data and analytics, but also what's going on around the world and the retailers who are putting the shopper in the center of all of this.

Candace  13:37

Yes. And that's why I think I'm really delighted to be overseeing our Retail Safari® product, because it is looking all around the globe. And it's all happening so quickly. I was shocked by the direct to consumer numbers, you know, the percentages of people buying off brand websites for basic products that you would buy in a Walmart or a CVS or Walgreens.

Wendy  14:02

And I think so much of that now just redefined the days, maybe five years ago, maybe 10 where brands said no, no, no, we can't sell directly because you know, then our retail partners will get all upset about this. Meantime, the retail partners are going off and developing their own brand. So there's so much of that going on that I think can be very clearly defined. There are a couple of other things that I thought were really interesting in the work we did towards the end of last year and that we've just released, and I think it's really important as people start to frame up the future, this notion about the expectation of the store. I love that insight. People are now talking about happy stores that just makes my heartbeat faster.

Candace  14:44

Well, we talked about buying happiness and the study we did about the store.

Wendy  14:50

Yeah, Build My Magic Box

Candace  14:52

that was really visionary because the store is now a magical box. What intrigued me is We were trying to peel the layers of why people choose to sit at their tablet and do a quick trip online versus going to the store. And the big differentiator is when I have a lot of energy, and I'm feeling good, I want to go to a store. And it's like, okay, I don't want to go out and play tennis or golf, or I may want to do that, too. But I want to go to a store to get these things. And that says a lot about everything we've learned about make my trip easier, make it less stressful, because this is the way I really want to shop, I want to go to a store.

Wendy  15:38

And that data that we have, that really was again, an eye opener for us, when we did the retail work five or six years ago with that one client about that was the beginning of order online and pick up at the store. And we saw even then that people would then go and park their car and go into the store after they picked up their order. And we've seen that continue to grow here. Right in the last work we've done.

Candace  16:00

Yes, that is that's a continued at least a third of people go in, you know, I got the basics done. Let me hit into Target and check out if they have the MAC I want in ULTA.

Wendy  16:11

and I think that's the other piece, it's that ability to pause the trip, not assume that if people have ordered online or picking driving up to the curb, getting it loaded into their trunk, and then going home to do something else. In many cases, the third that you say they're then saying thank you very much parking the parking spot, and then going into either do what they really would like to do the things they want to browse the things that make them happy. Or maybe they've forgotten something or whatever it is, but the store doesn't go away. It's just used so differently. And the ability to sort of flex both the store and the shopping trip means that we have to be really, really smart about how we segment those shopping trips now and the shopper needs around that.

Candace  16:58

That's right. And it's making sure I think, you know, we're seeing a lot of alliances springing up what better way to attract the shopper to come into the store than to be able to buy the top DSW sneaker in HyVee because they have them displayed on a wall and all I do is click an eye on it. The alliance's will be a powerful draw the whole 'what's for dinner tonight?', which, okay, I got all this shopping done, I picked it up, I really don't want to cook all that stuff I just bought. What's for dinner tonight? And the assortment of healthier, already prepared food is a wonderful way to bring people into the store. We used to be the aroma in the bakery. Now it's the aroma in the kitchen.

Wendy  17:43

I think it's also interesting. One of the innovation concepts we've seen comes out of China, which is doing some extraordinary work. Alibaba has a chain of retail stores, Alibaba, those sort of Amazon to the power of 10 equivalent. And what I found fascinating about that concept was actually yes, of course, I can buy all my basics if I want. But actually what do people really want to spend their time doing in the store where they want to pick out their fresh seafood, they don't want some here we say we want to pick up the produce right there it's fresh seafood. So they can order they can actually watch things, their regular audit go across the loop. I don't know what to call it a thing around the roof.

Candace  18:24

I think they used to call it a conveyor belt, but they don't anymore.

Wendy  18:28

Whatever they call it, it's going around the ceiling. While meantime, shoppers are in the in the fish department. And they're choosing their fish or another seafood in swimming around. Because that's how they want to spend their time. And if they want, they can actually have it cooked while they're doing chores and sit and eat it there. And so you think about the store and it's both Distribution Center. Thank you. It's a conveyor belt. It's a place I can eat what I want to buy fresh. There's just this whole dynamic about it, which is extraordinary. And of course, it's all done with your phone. And so they know everything you do, and they can stock the shelves according to how people are buying that day. It really is it requires us to think very differently. But we are already seeing all this future. Right?

Candace  19:11

Absolutely. I think the lesson we learned with the internet has to be unlearned. It's not going to take 10 or 20 years to reach critical mass. I mean, we're already seeing the DTC numbers and the livestream numbers reached down into consumer packaged goods categories and attract I was gonna say a younger generation of shoppers, the Millennials are already 40 with families and Gen Z has families. So it's attracted. Yes, younger shoppers, but they are now half of the shopping universe.

Wendy  19:47

And you know, it's interesting. We've spent so much time as industries thinking about e commerce and something like livestreaming not to harp on it, but you know, it looks very familiar. It looks a little a little bit like TV shopping, it looks like QVC and HE, right QVC all over again. Speaking of the future, that was a study we did many years ago about the TV shopping the new retail, so we could change that title and call it livestreaming the new retail. It's not something that shoppers really have to get used to. They're used to it if they've watched television channels where they can buy stuff. So I do think that vision that companies need to have now is really you talked about peripheral in the sense of DTC. But I think it's peripheral in even broader ways that we have to understand the dynamics of this traditional kind of trip mode that many companies have worked on for so long, and even the category management mode. The other thing that struck me in the work we've done over the last six months, actually before the pandemic during the pandemic and wherever we are in the scheme of things is the way shoppers are valuing their retailers and brands and this sense of values and social values that we've seen, you know, that notion of fairness that you identified in the How America Shops® research, in

Candace  21:05

the truth report, The New Shopper Truths.

Wendy  21:08

Whoa, that was fascinating that that fairness became such critical truths that shoppers are looking for in brands and retailers today,

Candace  21:16

the definition of fairness is much broader than ethnic diversity or accepting people of different sizes and shapes. It extends to if we all know what's healthier, and that's a whole other topic of how many more people are in touch with how to stay healthy. We all know what healthier means it should be affordable to everyone. If we all want to participate in saving the Earth, the products that will help save the Earth should be affordable to everyone. And that to me is the visionary definition of fairness as it applies to Shopping Life®.

Wendy  21:54

And I think there were two other things in that that sort of knew fleshed out in the in the research team fleshed out there was this notion of are you fair to your workers

Candace  22:03

A given, absolutely.

Wendy  22:05

Do you treat them well. And then the other piece was, don't push everything back on me your point about saving, you know, sustainability, whatever, I can only do so much remember the quote in the in the qualitative piece of that work before we went off into the big quant study and shoppers saying listen, I'm only one person, I can only do so much, you companies, manufacturers retailers, you can have a greater impact. So you've got to step up to this, why would I spend my money with you're not being fair to me, my community, my world?

Candace  22:36

Yes, that notion that I'm going at it one water bottle at a time, but a large company can have massive impact. The other feature of that is the role of the retailer. So often, the sustainable initiative is buried on the shelf, it's really hard to find the package that says we took out a third of the plastic Oh, we've removed the problem dyes or fragrances or ingredients, we've made it clean, very hard to find them on the shelf. And retailers have an obligation to start showcasing those brands, which in turn will encourage more brands to participate.

Wendy  23:17

I mean, this notion of the shelf, and what the shelf looks like what the messaging looks like, all of those elements for this, it really does require this me and my whiteboard and blank sheet of paper that you can just sort of step back and say, here are values, here's what shoppers want is the shopper in the room, as I always say that the center of this. And then how do I now think about my physical store and all the tenants of that digital, multifaceted access streaming all of that, and what does a day in the life of the shopper look like? So as we think about you mentioned health and wellness, and I think again, as we look to the future, that's another really big theme over this coming year, 18 months, 24 months, this notion of something that existed and people were very engaged in or increasingly engaged in before the pandemic, but now this sense of wellness, happiness in new ways. Really, everybody can participate in this, right? It's not just healthcare companies. I think the other thing that this all talks to, we have to be very conscious as we move forward of what are the questions we're asking, by that I mean, an industry how are we going to continue to engage shoppers over the long term? And so this, all of the evaluations that companies do their net promoter scores, their sales, their traffic, I step back and say to myself, Is this really what we should be measuring? And we talked to one of our podcasts earlier in 2021 about not just return on investment, but return on engagement, and what does that sentiment on the part of shoppers really look like now? And how do we measure in different ways, because people are still using old techniques.

Candace  25:03

Well that's right. And you know, we are working on that we have a return on engagement measure. And it is built a category at a time. I mean, what made specialty food and specialty fashion stores is they sold pretty much one category. But when you get into mass merchandisers, drugstores supermarkets, it's about building engagement, one category at a time. And that means shoppers expect to shop for pain relievers differently than they expect to shop for skincare or antiperspirants or shave and understanding the expectations in the category and delivering against it, that's going to be the key to return on engagement, which of course leads to increased traffic and return on investment.

Wendy  25:52

And I think all of that. So that's to those of you listening intent, stay tuned for that, because we've got a lot of work we're doing around that. So we'll be telling you about that soon. But I do think as we move to the future and the next round of the future, which we are clearly at already and have defined, and measuring constantly. We also have to challenge ourselves to say, what are we measuring? Who are these people? What do they need? How do they need it, because if we're not thinking about that, we're going to be using very old tools to measure very new lifestyles and what we call shopping life. So more to come on all of that. Candace, any other hints of anything else new that you want to tantalize anybody with?

Candace  26:34

It's no longer about the basics. It's almost like spots before your eyes. That's what I mean by peripheral vision. It's like everywhere I look, I see a new spot I need to pay attention to and that shoppers are so willing to adopt whatever comes on. I mean, the days of worrying about where I put my credit card number or you know how I'll pay for something. I mean, the concept of not even having a checkout. How do I do that?

Wendy  27:01

My favorite the first time I walked into an Amazon Go store their first one in Seattle. I mean, it was like, Oh my heavens, did I just steal that? Oh, no, I just came and went.

Candace  27:11

That's right, you have to get over that feeling. Back to one of our favorites. HyVee, they just about managed to put all the front end stuff that we missed at self checkout, you know, the chocolate bars, the chips, the beverages, the magazines, they've got it all. They're now at the self checkout. And now the new frontier will be no checkout. Let's go.

Wendy  27:32

Right, just go. Just go. I will say as a very last thought. Thank you for building and enhancing the team. We've got some great new people that we've added during the pandemic. I think we're the only company in North America that has not enough office space when we go back the unintended consequences of things. But to everyone, I can't thank you enough on the part of Candace and the whole team for a very nice year last year. Thank you. That's my understated Australian way of saying it was a good year. And we are most encouraged about what the future that we are in, no wet cement at WSL the future we are in is here as fast and we are here to help you see it and act upon it. So thank you, my dear Candace.

Candace  28:15

You're very welcome Wendy. It was a good one, fun to do.

Wendy  28:19

See in the future.

Candace  28:20

See you next week. Bye bye.

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