Oliver helps retailers to change and transform their business and operating models. He's the host of the 'Retail Transformation Show' podcast and author of 'Driving Retail Transformation: How to Navigate Disruption & Change'.
Retail Transformation Briefing β 12th June
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Walmart is making a major move for electronic shelf edge labels (ESEL), and they're just one of the many retailers taking the plunge into this technology right now. ESEL technology has been around for a while now but has only recently reached a stage where retailers can easily prove the business case and justify the investment. Original digital price tags were simply capable of automatically updating prices, and the business case was typically built from labour savings of not needing to change price tags on a daily basis. But the modern generation of tags takes the same concept and expands to be able to support customers and colleagues in new ways - for example, through the use of locating lights to make it easier to replenish an item or improve productivity when picking ecommerce orders. However, pricing sophistication has developed significantly recently, from market analysis to complex pricing algorithms and, of course, new ways to present prices to customers. The rapid expansion of discounters is a reminder of just how important price is to customers. It's no surprise that technology develops capability and becomes more affordable over time. However, we must also remember that any given technology is only one piece of the puzzle. There are adjoining aspects of the operating model which play important roles, and we must also factor pricing effects into other business decisions - from ranging and assortment curation to discounting and stock clearance approaches. And of course, the impact on the bottom line can't be ignored. Price remains one of the most obvious levers to retail success and also one of the most complex due to its highly sensitive and interactive nature. ESELs is only one aspect of pricing, but it seems that right now, the tech has reached a crucial tipping point. Retail transformation news headlinesπ·οΈ Walmart announced a major deployment of electronic shelf edge labels across 2,300 stores. The rollout of Vusion Group's digital labels will take place by 2026 and accounts for nearly half of Walmart's US stores. Whilst there has been speculation that this could open the door for highly variable prices and surge pricing, however, it feels like the use case is more of a classic ESELs approach, where the technology will look to increase price integrity, improve productivity, reduce payroll, make replenishment and ecommerce picking processes more efficient and offer the opportunity for fine-tuning price regularly on a day to day basis. π΅ Walmart also announced a bonus scheme for frontline colleagues of up to $1,000 per year. The scheme is for hourly paid colleagues, both full and part-time, and is based on their store's performance vs target. The initiative originated from colleague feedback and the US CEO John Furner suggested it's an important initiative to be "competitive on base wages". π Amazon has revealed that they use a vision system to scan orders to check for damages before the final packing and dispatch operation. The AI tool named "Project PI" (where PI stands for private investigator) looks for issues like damages, leaks, colour and size in a bid to minimise customer frustration and returns. Defective items are then separated where the system determines if they can be sold as a reduced item, donated to a good cause or if they need to be disposed of. The system is being developed to improve itself based on outstanding issues reported by customers. π€ Michael Kors is implementing a gen AI assistant to support online customers, aiming to offer a service like in-store. Customers will be able to get support and recommendations relevant to their behaviours and preferences, and the assistant will also be tailored to local language nuances. Chatbots are nothing new, although the explosion of AI over the last 18 months doesn't seem to have shown a significant takeup on this proposition beyond the long-term growth forecasts. It will be interesting to see if the solution really is a viable alternative to a human conversation and how it helps online customers. π¦ Waitrose acquired premium meal kit delivery company Dishpatch. The aim is to bring new food "experiences" to customers through Dishpatch's restaurant-quality meals delivered to home. This move aligns with Waitrose's vision of being "the home for food lovers" and its market positioning. Meals are priced from Β£21 to Β£68 per serving, and whilst it feels like a fairly niche opportunity, it would represent a new market to experiment with. π Sainsbury's is moving from plastic to cardboard trays for fresh fish and chicken. The changes are predicted to save 694 tonnes of plastic per year. Plastic packaging remains a key focus point for retailers as they look to improve sustainability performance and We'll continue to see retailers learning from one another to collectively drive a major change across the market. πͺ΄ And finally, we could be seeing more large Chinese retailers expand into Europe, North America and the whole world as the government starts to focus on supporting overseas warehouses and cross-border ecommerce. The Chinese Commerce Ministry recognises the importance of Shein, Temu, Alibaba and TikTok as they look to boost foreign trade further. The new rules and direction will look to to improve data management and optimise exports and could unlock the opportunity for China's domestic-focused retailers to start expanding globally. New podcast episode: Flagship stores: strategic play or vanity project - #298Flagship stores are incredible shops β the epitome of excellence and offering customers a fantastic shopping experience. But they can be excessively lavish and hugely costly with no expense spared in a bid to worship the brand. In this episode, join Oliver Banks and consider if flagships are a viable strategic approach for you and your brand, or if theyβre an expensive vanity project, wasting precious time, money and attention. Listen to episode 298 of the Retail Transformation Show and discover:
Plus, check out these recent episodes: β#297: The great workplace debate β WFH vs RTOβ β#296: Reimagining the role of the physical store β β#295: Shift customer experiences into memoriesβ Webinar: The future of pricingIf you're interested in learning more about pricing, take a look at this upcoming webinar from Competera and Coresight Research on Tuesday 18th June at 5pm UK time / 12noon Eastern time. It explores why the future of pricing brings AI to improve customer-centricity and how this can forge a commercially viable competitive advantage for your brand. I'm proud that OB&Co is a partner of Competera and also to have been personally recognised as one of Coresight Research AI Influencers, so I'm looking forward to learning more from two great companies! Keep transforming better, Oliver |
Oliver Banks of OB&Co
Oliver helps retailers to change and transform their business and operating models. He's the host of the 'Retail Transformation Show' podcast and author of 'Driving Retail Transformation: How to Navigate Disruption & Change'.
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