Emerson Group’s 10th annual Retail Industry Day wraps with forecast of retail’s future
PHILADELPHIA — The stark reality that reverberated with attendees of the Emerson Group's 10th annual Retail Industry Day was simple — within a short period the entire ecosystem of how consumers seek, source and acquire products will change. And that change will accelerate thanks in large part to the coming of age of a generation of consumers who have never experienced a world without Wi-Fi.
The constant connectivity that Generation Z has experienced since the day they were born will fundamentally change the parameters by which everyone competes, said Michael Dart, a private equity partner with A.T. Kearney and co-author of "The New Rules of Retail,” who delivered the final keynote address. Dart served up a playbook marketers can use to appeal to Generation Z, the demographic cohort behind millennials, as they come of age.
Gen Z shoppers are environmentally concerned, view technology as a tool (not for games), are fiscally conservative and are continually connected.
“The 21st century is going to be defined by convenience, and Amazon right now is clearly ahead in that game,” he said. “For retailers there will be two paths, on one they’re going to become great centers of entertainment,” he said. “On the other is active involvement. The concept I see thriving is more of a farmer’s market concept – small-scale stores where people like to hang out.”
Dart outlined several themes that will play a significant role in accelerating the seismic shift in how brands will be branded in the future. Following are three of the key themes he outlined.
1. Supply and demand imbalance
"If any of us took a walk through a supermarket, through any mall, through any shopping center, through any store, we would just agree that we live in a world of super abundance," Dart said. "Globalization has done a wonderful job increasing supply," he said. "If you look forward, we're going to see more and more sources of supply coming [and] if we look even further out we're going to see 3-D printing having an impact on the source of supply."
This increase in supply capacity has been happening for some time, but what will change will be a corresponding increase in demand. Two generations ago the evolution of two-income families increased demand and a generation ago improved productivity in the 1990s fed a boon in average income that in turn drove greater demand. "Today, 2017 looking forward, we have some structural impediments on the demand side that are very material," Dart said. "We've got just marginal growth in real income over these next few years and we also have income inequality which from a consumption point of view is important, purely because the marginal propensity to consume for wealthy people is significantly less than it is for poor people."
2. Great fragmentation
"If you think of the mass market like a big, glass bowl, that's the historic mass market," Dart said. "It has been shattered into a thousand little pieces. I like to say it's an infinite number of finite segments." For example, today is the first time in history we have five generations, each with distinct shopping preferences. Demographics are also shifting toward urban areas vs. rural, income inequality and are further divided by ethnicity and orientation.
"This fragmentation is killing mass markets," Dart said. "Big brands are losing share everywhere," he said, and they're not able to combat the one or two competitors who are stealing that share because it has dissipated in a hundred different directions.
"There's a saying in Silicon Valley, it's a euphemism for the level of disruption that software is causing, it's that 'software is eating the world,'" Dart shared. "There’s a slew of different technologies out there impacting everything, but there are four that I think both today are having an impact and in the future will have an accelerated impact."
Those four are API (Application Programming Interface), artificial intelligence, distributed computing (blockchains) and self-driving vehicles. "We're in the early stages of this disruption, but it's already profound," Dart said. "Amazon [is] essentially becoming a nation state because it has all of this access to this technology for frictionless commerce," he said. "The way in which we shop, from buying online to picking up in stores, the responsive mobile web, which is the next phase of development, all of this is built as this technology is layered on each other. Because APIs aren't patented, and it's open source, it enables a whole new way in which businesses can be created and serve the customer."
The presentation from Dart was part of the Emerson Group’s 10th annual Retail Industry Day, hosted in late September to a packed room of hundreds of merchants eager to discover how to better proposition their products for tomorrow's ever-evolving consumer.
All this week Drug Store News has been featuring content connected to the Emerson Group's 10th Annual Retail Industry Day.
The first presentation emphasized the importance behind connecting with people, including employees, colleagues and consumers, in an effort to get at the heart of business with CNBC's Marcus Lemonis.
After Lemonis, marketer Colleen DeCourcy, chief creative officer for Wieden+Kennedy, took the stage. She discussed how to keep catching the kind of lightning in a bottle that makes brands spark.
DSN then summarized the presentation of Musab Balbale, VP and general manager for Walmart e-commerce, who sees how digital will transform the shopping experience from an exchange of goods for money to a shopping experience defined by time-saving efficiencies.
"Digital" figured prominently in the day's speaker lineup, as L2 Inc., a subscription-based business intelligence service that benchmarks the digital competence of brands, offered up Evan Neufield and Jane Fisher to discuss how marketers can employ digital in promoting their brands through personalization and consumer feedback.
Kiss Products brings Gold Edition to Walmart, Kroger
PORT WASHINGTON, N.Y. — Kiss Products is bringing its latest collection to brick-and-mortar following an initial exclusive Amazon launch. The company’s Gold Edition collection, which features four products in metallic, matte gold and rose gold, is coming to Walmart and Kroger stores to make the collection accessible to more consumers, the company said.
“We are so excited about our partnerships with Walmart and Kroger,” Kiss Products director Young Kim said. “We are continuously pushing boundaries for our new items to fulfill consumers' desires for premium quality products that are available at great price points and now easily accessible.”
The collection includes the Tourmaline Gold hair dryer, which has an ergonomic handle and can dry hair fast and prevent hair cuticle damage; the Comb Straightener, a heated comb that can speed up straightening time; the Ionic Smoothing Brush that uses ions to eliminate static and smooth hair; and the Bristle Straightener, a ceramic plate detangler brush with Kiss’ anti-frizz technology.
The products launched in Walmart stores nationwide Oct. 1, and are set to roll out to Kroger stores on Nov. 1.
Brandless branches into beauty, personal care
SAN FRANCISCO — Online store Brandless, which launched in July with a portfolio of private-label product all sold for $3, is expanding its offerings with a foray into beauty and wellness. The company detailed its latest effort, the Brandless Beauty and Wellness Collection, in a blog post on its website, noting that the product line was aimed at “making clean beauty accessible to everyone.”
“Just like with everything else we do, we created this this collection with the filter of ‘just what matters.’” Brandless CEO and co-founder Tina Sharkey wrote on the Brandless blog. “We banned 400+ potentially harmful ingredients and replaced them with plant-based powerhouses like aloe, citrus and green tea. We formulated non-GMO vitamins and sourced organic cotton feminine hygiene products. Better for you. Better for everyone.”
The product line, which includes facial cleanser, body wash, shampoo, shave gel, body wash and lotion, is free of sulfates, phosphates and parabens, and are cruelty-free. Other products launched Wednesday include an assortment of vitamins and supplements, including men’s and women’s multivitamins; such menstrual products as organic cotton tampons and pads and panty liners with organic cotton top sheets; organic cotton swabs and balls and lip balm, among others.
In keeping its products free of harmful ingredients, Brandless is in-step with such major retailers as CVS Pharmacy, which has committed to removing phthalates, parabens and common formaldehyde donors from roughly 600 of its personal care product. These efforts are in line with consumer attitudes, with recent Label Insight data showing that 68% of American consumers would pay more for food and beverages that don’t have ingredients they perceive to be bad for them. Besides delivering on transparency and on price — like all Brandless products, the new offerings cost $3 apiece — the company is leaning into a diverse consumer base, launching products that can be used a wide swath of consumers.
“We also put a lot of thought—and love—into making our Beauty and Wellness Collection for everyone,” Sharkey wrote. “We made sure our products work on every type of skin and every type of hair. We chose gender-neutral (but really nice) scents like green tea and aloe, grapefruit, and citrus bergamot. We created a collection of basics you can afford and love, no matter who you are and how you define beauty.”