Between the tariff tug-of-war, flailing markets, insanely high egg prices and general “twitchiness” (as one strategist put it), consumers have gotten a bit hard to nail down lately. So perhaps it’s not surprising that the dominating “talk” among retail executives at Shoptalk this week has revolved around what exactly consumers want and need right now.
One thing is clear — it’s not AI. (Although AI may be the vehicle that helps retailers give it to them.) In fact, AI was held at a pleasant distance at the annual retail conference, which kicked off Tuesday in Las Vegas. While the world’s favorite two-letter acronym for the past 18 months cropped up here and there, it wasn’t the central focus. Instead, executives from across the retail spectrum zeroed in on how they’re connecting with and serving consumers in this complicated economic and geopolitical moment.
Here’s what some of the leading minds in retail say consumers need now.
Products that Perform
Consumer appliance brand SharkNinja develops 25 products from the ground up every year, which puts the company in a pretty good position to know what consumers are looking for. In some cases, it may be a product that taps into the latest TikTok trend or delivers new functionality to a mainstay category like vacuums. But at the end of the day, the common theme is developing “products that consumers love; that is where our business starts and stops,” said SharkNinja CEO Mark Barrocas in a keynote address.
“The consumer is incredibly discerning — we’re not competing against other small appliance companies; we’re competing against restaurants, we’re competing against vacations,” Barrocas said. “The consumer has a certain amount of money to spend, and they’re going to decide the best way for them to spend those dollars, so we’ve got to work hard developing the best product and getting the consumer excited. We can’t be in a break-to-fix business because our products last for years. We’ve got to put our products into retirement before [the end of] their usable life [with new innovations].”
But creating innovative, high-quality products that differentiate has become even harder in a world of dupes, according to Barrocas: “You get a one-year head start,” he said. “We come to market with a product, and we know that that product is going to get bought by 50 competitors within the first month, and they’re going to tear it down, they’re going to reverse engineer, they’re going to figure out how to make it cheaper, so we need to keep innovating.”
There’s no fighting the speed at which the world now moves. Instead, Barrocas believes the only option is to “embrace the plan changing, embrace the pivoting and spot the smoke early,” he said. “Don’t wait for there to be a raging fire before you realize there’s a problem. If there’s a small puff of smoke, start pivoting and start figuring out how you need to maneuver. What I’m most proud of is the ability to be able to spot challenges in the business and react quickly.”
Persuasive Storytelling
One of the newer ways retailers are connecting with consumers (and helping brands do the same) is through media offerings. Lisa Valentino — who became President of Ads at Best Buy five months ago after years at more traditional media companies like Yahoo, ESPN, Condé Nast and Disney — talked about retail media’s power to serve at “the intersection of influence and performance.”
Regardless of its relative newness, Valentino said that retail media is still media, and traditional tenets still apply: “Media is about persuasive storytelling. It’s all about creating a palette for brands to create those really important connections with consumers; that’s what media should do,” she advised. And this applies to both the newer retail media networks and companies that have ruled the media landscape for decades.
For retailers, that storytelling must also take place in stores, which have become a unique proposition in the evolving (and expanding) media landscape. “Everything we’re trying to do is to better the customer experience and better serve them,” shared Aaron Dunford, VP of Media at Nordstrom. “How do we help people feel good and look their best? When we widen the aperture of what commerce media is and take that broader definition, it allows us to better help and serve our customers through those media channels.”
As an example, Dunford pointed to one of the retailer’s earliest offerings, which was to give brand partners access to the company’s famed stylists. He also talked about unique in-store seasonal installations that drive brand discovery, including an alpine-themed yurt and a new immersive swim shop.
“Retail should be inspirational,” Dunford said. “What we’re looking to do is create an environment for our customer in stores where they can not only find the product they love, but be inspired by some of the best brands in the world. We’ve really been focused on, not necessarily screens per se, but how do we build a curated, experiential, visually compelling content experience for our customers?”
Contextual Relevance
Another core tenet of media is ensuring that content, especially advertising, is relevant to viewers. Retailers are finding unique ways to take this to new levels via their media offerings.
Harvey Ma, VP and General Manager of the Sam’s Club Member Access Platform media offering, talked about the kinds of ads now available on its in-store “scan-and-go” mobile self-checkout devices. Beyond being delivered at a highly relevant moment, the content itself also is carefully curated to that moment. “Those ads don’t always feel like ads,” he said. “Some of them are ‘Did you forget?’ or ‘You might like this’ types of additive experiences.”
“At Sam’s Club we’ve got a very highly technical term for commerce media — shopping,” added Ma. “Joking aside, commerce media is just getting the right ads at the right time to the right people in the right space.”
And as retailers enter the media space, legacy media companies are steadily moving into commerce, bringing in contextual shopping experiences.
Alison Levin, President of Advertising and Partnerships at NBCUniversal, isn’t a huge fan of the term “legacy,” but recognizes the need to distinguish between new and more seasoned players in media: “NBCU has this incredible reach, this IP, this emotional connection and executional excellence,” she said. “Call it what you want to call it; you can call it legacy, but it works, and it’s continued to work for a really, really long time.”
Case in point was the recent Saturday Night Live 50th anniversary event. “When you think about engagement, moments that matter for a brand, there’s no better example of that than SNL 50,” said Levin. “This was a cultural phenomenon the entire country was talking about it, and we had brands that integrated into the content like they’ve never done before.” One prime example was Capital One’s “Delicious Dish” spot.
“There have been incredible advancements in shoppability on the TV screen and removing the friction that existed before we had QR codes,” Levin added. “We have AI now that scans content to find what’s in the show and [is] available to buy it after. We have cart integration. As an industry, that is going to become table stakes.”
Cultural Relevance
Speaking of cultural moments, Gap is currently in the midst of one. Following years of flagging performance, Gap’s profit and sales exceeded forecasts this past holiday shopping season, and the company is beginning to enjoy the results of a massive turnaround effort led by President and CEO Richard Dickson.
Central to this effort has been answering the question, “Why do we exist?” said Dickson. “Does anybody really need another pair of jeans or another T-shirt or Oxford, or anything for that matter? We had to find our point of difference, and then the next stage of that is taking cues from insights, cultural trends, design trends, what’s hot, what’s not, cultural conversations and [determining] how we integrate our brand into the cultural conversation to be relevant. If you’re relevant enough, it eventually drives [consumers] to you.”
Part of this effort has involved drawing on Gap’s legacy in American retail, which, among other initiatives, included the resurfacing of a series of portrait collaborations with cultural icons from the ’90s, including Lenny Kravitz, Madonna, Missy Elliott and others. The next step is identifying “who are the ‘originals’ of today and tomorrow” and working with them, said Dickson. The goal is to “perpetuate that legacy by creating narratives around today’s influencers, today’s cultural periods, today’s artists and original thinkers that ultimately will be celebrated and given a Gap portrait, which keeps the brand’s legacy alive but then translates it into cultural relevance for today.”
Immediate Access
It’s not only the product innovation cycle that has sped up — consumers also expect to find and get those products fast. DoorDash and CVS can attest to this reality.
Since its inception as a restaurant delivery service in 2013, DoorDash has rapidly expanded well beyond the food category; in fact, the company just added footwear retailer DSW to its roster of non-restaurant brands, which now also includes Home Depot, Five Below, David’s Bridal, Starbucks, Hustler Hollywood and many others.
Mike Goldblatt, VP of Grocery and Retail Partnerships at DoorDash, said that last-minute, urgent purchases are the most common entry point into DoorDash’s non-restaurant offerings for consumers who used to be, or still are, a restaurant customer of DoorDash.
“We launched seven new categories last year, and as we’re introducing these categories to customers, the typical first purchase is going to be [along the lines of], ‘I’m missing this thing; I need it right now,’” Goldblatt said. “But then a switch goes off with the consumer where we build frequency and lifetime value as they start thinking of Best Buy or Dick’s Sporting Goods on DoorDash. I know I can get a quick need, but I also know the full selection is available.”
(For a fun example, check out this TikTok of a New Yorker who DoorDashed shorts from Dick’s while on a date.)
The immediate availability of a wide array of products is the key to drawing in consumers at CVS as well, where the retail business (as opposed to its pharmacy offerings) accounted for three-quarters of foot traffic last year.
“If you want tennis balls, you can wait for them to be delivered or you can go to a big-box sporting goods store, but if you’re on the way to the courts shouldn’t you be able to go somewhere really convenient along the way?” said Musab Balbale, SVP and Chief Merchandising Officer of CVS Health during a session. “It’s almost like the old general store — that is the core of what we offer.”
Learn more about how CVS is achieving that goal with an intricate localization strategy here.
Value Without Compromise
The last but certainly not least pillar in this current economic moment is value. But as a number of executives pointed out, consumers today expect value without having to compromise convenience or ethics.
“Customers are just not willing to sacrifice,” said Kevin Tulip, U.S. President of Primark. “They want and expect value, but they’re not looking to sacrifice on experience or the environment or which trend or season they’re looking at.”
This can be a tough nut to crack, especially for companies operating at the lower end of the price spectrum. But Primark has found a way to do it. “Overall, price is what we’ve built the business around, and over the last 15, 16 years, we have continued to build on top of that quality, style and trends.
“Our belief has always been that sustainable fashion shouldn’t only be accessible to people of a certain wealth bracket,” Tulip added. “If you’re looking for a pair of $10 jeans or $4 T-shirt, you should also be able to choose more sustainable and recycled fabric; that should be available to you. We are part of fast fashion because of the price that we offer, but certainly a low price doesn’t equal poor ethics or poor sustainability.”