What a difference a year makes.
At last year’s Shoptalk retail event, it was the metaverse that found itself inserted into nearly every conversation, often accompanied by either rabid excitement or tiresome eye rolls. This year, generative AI was the star, supported by a collective sentiment that it will change the consumer goods and retail industry — though how exactly that takes shape is TBD.
CGT sat down with Elizabeth Lafontaine, chief retail analyst at Retail Leader Pro, during Shoptalk to dig into this and other tech trends that will impact consumer goods manufacturers and retailers. (See more of Lafontaine's Shoptalk insights here and some insights from the floor.)
Evolving Face of Agility
Whereas retail agility once primarily addressed the need to get products to market faster or deliver seamless consumer experiences, it’s now on the hook for keeping up with a fickle and constantly changing consumer — one who has more choices than ever. And after spending a hefty amount of time streamlining SKUs during the pandemic to manage supply chain disruptions, some consumer goods companies find themself unprepared for this much more demanding shopper, and it’s having ramifications throughout the entire value chain.
“Brands are really finding it challenging to keep up with the customer right now, [including] how they're communicating to them, working with retailers to get products into the stores, and working with product development,” said Lafontaine. “There really needs to be much more agility across the industry, both from retailers and from brands, for the industry to keep pace with consumers. Consumers are really leading the charge right now in innovation, and retailers and brands are continuing to kind of play on the back foot.”
For PepsiCo, this has meant leaning into scenario-based planning in order to pivot more quickly when assumptions change. “Process is one piece, and structure is another,” Parth Raval, chief growth officer at PepsiCo Foods North America, explained during a Shoptalk session. “That enables us to operationalize agility … [to] really bring the system together across functions, so you’re not just thinking across silos and thinking on how we're going to plan for next year, but really driving the connective tissue.”
Complicating matters is consumer apprehension with an uncertain economic environment, which has subsequently diminished their desire to shop. They’re not going to stores as frequently, converting as frequently online, or viewing retail quite as the source of comfort as before, said Lafontaine.
“There really — much more than over the past three years — needs to be a reason to buy,” she noted. For brands, this means not only enhancing features and remaining relevant, but investing in social listening to keep abreast of consumer trends.