At the recent Shoptalk conference in Las Vegas, billed as “Retail’s Big Reunion,” thousands of leaders from the retail and tech worlds gathered in person for the first time in two years. Buoyed by the comradery and conviviality, the overall mood was cautiously optimistic. After all, the retail industry is strong, and ecommerce sales have increased by over 50% (per DigitalCommerce360) since the last time Shoptalk convened in person. However, the three biggest topics—inflation, supply chain, and labor shortages—have conspired to create unprecedented business challenges that may negatively impact the next several quarters.
It's impossible to separate inflation from the supply chain and the supply chain from the labor challenges. Each has been affected by global conditions that are nearly ubiquitous. Gas prices have skyrocketed everywhere, there’s no end in sight to the war in the Ukraine, China’s zero Covid policy is choking production, and the Great Resignation continues to affect the ability of all industries to get back to business as usual.
While some exasperated executives believe that these issues will be difficult to overcome, many of the speakers we heard at Shoptalk are actively preventing these challenges from negatively impacting their businesses.
Inflation was by far the dominant topic. At Uber’s session, CEO Dara Khosrowshahi said he believes that companies need to beat inflation by growing faster than the rate of inflation. Since that may not be a viable option for everyone, another way smart retailers are managing inflation is through First Insight’s price optimization platform. This software gives retailers and brands pricing insights directly from consumers which are then married with predictive analytics. By adopting a data-driven pricing strategy, retailers can understand the threshold consumers will pay for items before they are manufactured. This tool helps maximize gross margin by optimizing price points and sell through to help take the sting out of inflation.
American Eagle Outfitter (AEO) executives Shaker Natarajan, EVP, Chief Supply Chain Officer along with Chief Operating Officer Michael Rempell discussed new thinking around the supply chain. In addition to viewing supply chain roles as customer facing, AEO’s team also believes that collaboration among various brands and retailers will be critical in order to maximize globally limited supply chain assets more productively. One of the ways First Insight helps clients mitigate supply chain upheaval is by leveraging our predictive analytics expertise to reduce unpredictability. Producing merchandise more quickly through Voice of the Customer data, discovering ways to avoid the use of materials that have high supply chain volatility, and identifying viable substitutes quickly and easily are just a few ways that retailers and manufacturers benefit from this tool.
Retaining talent by making jobs more interesting as well as better paid was discussed by Anthony Soohoo, Walmart’s EVP, Home. Keeping employees engaged is a top priority for all companies today. First Insight’s Employee Experience Management solution enables employee satisfaction by elevating the voice of a company’s employees. This invaluable experience management tool provides HR and senior leaders with actionable data, improving decision making and paving the way for companies to evolve from a reactive to predictive environment.
The biggest takeaway from Shoptalk 2022 is that data driven decision making is the only way to manage the interconnectivity of global businesses today. With First Insight’s experience management platform, companies can create innovative solutions and be better prepared for the future by using data to overcome inflation pressures, supply chain bottlenecks, and human resources challenges.