2023 RETAIL ISSUE 2 - Publicis Sapient
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2023 RETAIL ISSUE 2
Guide to Next. 1
2023
How retailers can create the most impact
in the coming year—on their business
and their shoppers.
Guide to Next. 2
TABLE OF CONTENTS
04 The Race for Retail Media Networks
14 Sustainable Supply Chain
24 The Return to In-Store Shopping
33 Retail in Web 3.0
Guide to Next. 3
Guide to Next. 4
The Race for
Retail Media
Networks
AUTOMATION, PERSONALIZATION AND CLOSED-
LOOP ACTIVATION: HOW TO STAND OUT IN THE
RACE FOR RETAIL MEDIA NETWORKS
Retailers have traditionally relied on product sales
for most of their profits. Now, the drastic rise in
e-commerce and industry profitability challenges has
prompted them to turn digital real estate and customer
data into ad sales, providing abnormally high returns
for the industry.
While traditional retail media has been around since
the first brick-and-mortar retail stores, the significance
of the term has changed in the last five years to focus
on digital retail media networks (RMNs), or retail data
monetization.
RMNs have already proliferated across the retail
industry, but what will determine their future success,
and which networks will come out on top?
Guide to Next. 5
What is a retail brands to purchase ads directly through
them, either on a retailer’s owned
media network? e-commerce website, in a physical retail
store, or on a third-party like Facebook,
Retail media refers to any advertising Google or even connected TV, which is
or media that’s located near the point referred to as off-site advertising.
of sale (i.e., within a physical store or
on an e-commerce platform). This While retail media networks could
could be a cardboard cutout in a include physical ad placements, their
grocery store or a “suggested product” growth areas right now are primarily
ad on Amazon. digital, or at the intersection of digital
and physical.
Retail media networks are the digital
platforms created by retailers that allow
Guide to Next. 6
How do retail media
networks work?
RMNs allow retailers to monetize “The self-service capability is a huge
their customer data through large shift and change,” said Ray Velez, global
scale advertising. From Walgreens to chief technology officer at Publicis
Sam’s Club to Ulta, many of the largest Sapient. “You don’t have to meet with
retailers have recently announced the team. You don’t have to make
and advanced their own retail media advertising consistent with a predefined
platform offerings. set of activities for the year, but rather
run campaigns much more fluidly.”
RMNs range from in-house platforms
with unique self-service capabilities to According to Velez, over time, RMNs
private marketplaces where data from will continue to migrate toward more
multiple retailers is uniquely available in-house and self-service models that
to specific advertisers. Many of these aid both local and national advertisers.
advertisers are already longstanding It’s more efficient for ad buyers as
retailer partners or suppliers, but others they get full control of their spend—
are digital natives that can provide a net- including closed-loop reporting—while
new revenue stream. also allowing retailers to scale.
SELF-SERVICE RETAIL MEDIA
NETWORKS
Self-service retail media networks allow
brands to choose their own advertising
campaign parameters—including
location and audience attributes—based
on an internal pricing algorithm.
For example, Albertsons Media
Collective created its own self-service
offering, and Walmart Connect’s
partnership with The Trade Desk allows
it to do the same.
Guide to Next. 7
Why are retail
media networks
growing?
In the past, retailers were very hesitant in the footsteps of most other platforms.
to monetize their transaction and loyalty These changes create a higher emphasis
data, creating a gap in an advertiser’s on first-party customer data—both
ability to deterministically measure the for the retailer and the advertiser—
efficacy of a campaign. increasing the value of a retailer’s data
“
monetization opportunities for their
The market shift away from cookie- owned and operated properties.
based audiences corresponds with
retailers’ increasing comfort with using Deterministic closed-loop measurement There are three things
their first-party data for advertising. is the biggest perk driving the value of that are really driving
This creates a unique opportunity retail media networks compared to other
this resurgence in retail
for retailers to become publishers, digital advertising. RMNs can connect
directly capturing more ad dollars digital advertising campaigns to actual media. The impact
through strategic data monetization via purchases at an individual level, which of third-party cookies
retail media networks. The result is a Google and Facebook can’t inherently
major uptick in the overall number of offer without the retailer sending their and signal loss, the
networks themselves, with several new transaction files to those third parties. potential for closed-
networks created every year.
loop measurement and
And despite a slower growth in retail Another retail media network benefit
media ad spend in 2022, eMarketer is is the retailer’s ability to bridge the linkage of online
still predicting $80 billion dollars in customer in-store shopping habits and offline purchases
spend for 2024. with their online purchasing patterns,
with a digital persona.
”
offering another unique differentiation
On many platforms, including Apple’s, from other channels.
marketers’ ability to track consumers
via third-party cookies has already been R AY V E L E Z , G L O B A L C H I E F
diminished. In 2023, Google will follow T E C H N O L O GY O F F I C E R
Guide to Next. 8
For example, as digital signage continues store and online with signage in a way
to grow within physical channels, that’s intuitive for customers? These are
retailers are striving to monetize those questions clients will continue to ask,”
screens by using their first-party data Velez said.
assets. Many retailers are adding in-store
digital signage as a media network The future of retail media is no longer
channel option to their offering, about defining the value or creation
expanding their ability to speak to of retail media networks—it’s about
customers at critical decision moments. taking them to the next level through
digital transformation.
“How do I automate the sales of digital
signage in my stores as part of a retail How will retailers make their networks
media network? How do I ensure stand out in 2023 and beyond?
consistent customer experiences in-
U S D I G I T A L R E T A I L M E D I A A D S P E N D I N G , 2 0 1 9 — 2 0 2 3 $52.21
$41.37
53.3% $31.49
53.4%
$13.39 31.4%
26.2%
$13.39
19.3%
17.2%
14.9%
13.4%
10.1%
2019 2020 2021 2022 2023
Digital retail media ad spending % change % of digital ad spending
NOTE: digital advertising that appears on websites or apps that are primarily engage in retail ecommerce or is bought through
NOTE: digital
a retailer’s advertising
media networkthat appears on websites
or demand-side platformor(DSP);
apps that are primarily
examples engage
of websites in retail
or apps ecommerce
primarily engagedor isinbought through
retail media
anetworks
retailer’sinclude Amazon’s
media network orDSP and Etsy’splatform
demand-side Offsite Ads; includes
(DSP); ads of
examples purchased
websites through retail media
or apps primarily networks
engaged that may
in retail not
media
appear oninclude
networks ecommerce sites DSP
Amazon’s or apps.
and Etsy’s Offsite Ads; includes ads purchased through retail media networks that may not
appear on ecommerce sites or apps. Source” eMarketer, Oct 2021
Source” eMarketer, Oct 2021
Guide to Next. 9
The top six retail media
trends for 2023
Using loyalty “The digital ads that brands
programs to create were buying are not as effective
better value for retail anymore,” Velez said. “Third-
media networks party cookies have depreciated,
and it’s going to get worse. If
Facing a drop in brand loyalty after the
you build a media network, the
emergence of COVID-19, consumer revenue gain is amplified by
packaged goods (CPG) brands are reversing signal loss and creating
looking for solutions to stand out to more signal through additional
customers in any way they can. impression opportunities with
customers. The increased
While initially RMNs could stand out impressions improve customer
with the quantity of customers and traffic understanding and make loyalty
to their e-commerce sites, retail media more effective.”
quality is becoming the best way to lure
in marketers.
Retailers like Ulta and Sam’s Club, with
strong legacy loyalty programs that store
years of high-value customer purchase
data, can offer advertisers information to
personalize ad placement and content.
Guide to Next. 10Expanding into
larger retail media Transitioning
marketplaces to retail media
network platforms
There are many different channels that led in-house
retailers haven’t yet integrated into
their networks, like digital signage, For over a decade, retailers outside of
connected TV, Google, TikTok and
Amazon have slowly transitioned to
many others.
Offering in-house models to create networks
“Many retailers are prioritizing on- programmatic with staying power instead of relying
site because of the ability to maintain sell-side retail on third-party companies to run their
control over their first-party audience media inventory networks. This gives retailers more
data, creative and destination. control and capability to scale their
However, when retailers run an off- Often, RMNs have not yet connected networks for the future.
site advertising campaign that drives on-site and off-site audiences to
more traffic back to their owned and programmatic demand-side platforms According to Velez, if you outsource
operated properties, it increases their (DSPs). However, as retailers are your network to a third party, they don’t
monetizable inventory and adds more build out your internal capabilities,
increasing their self-service platform
signal into their customer identity and it might put you in a hole when it
capabilities, some are considering
graph,” Velez said. comes to advanced functionality.
opening a portion of their retail media
Walmart recently partnered with Roku inventory to programmatic buys.
This means the process of buying ad In the short term, outsourcing can
to offer TV commerce, or shoppable
space will be fully automated for some help build, launch and operate retail
ads, on their programs. Although this
isn’t yet a major channel for retail media advertisers on most successful RMNs media networks. As RMNs advance
networks, it’s a future avenue that other moving forward. along the maturity model and become
retailers will soon follow—bringing a core part of the business, retailers
more data to personalize the customer According to Mazumder, the gold can think about decoupling from their
experience. standard after self-service will be AI outsourced relationship to own the
and machine learning algorithms entire end-to-end solution. Successful
“Consumers are getting more and more that can determine the “next best in-house integrated technology stacks
demanding. They don’t have time to and organizations can ensure that your
step” for consumers through ad
come in and browse around your site. personalized offers are synchronized
recommendations.
They want things very specific to them,” with media network impressions across
said Sudip Mazumder, senior vice
So far, Amazon’s recommendation all customer touchpoints.
president and retail industry lead
at Publicis Sapient. algorithm is the most advanced when
it comes to personalization, and other
successful retailers will continue
to advance their platforms in this
direction. Guide to Next. 11Creating closed-loop
measurements for
retail media by
adding in-store
touchpoints
While in-store retail media has “Solving for identity in-store is
traditionally ranged from cardboard still a challenge that retailers
displays to video screens, RMNs are striving to overcome. Even
are working to integrate interactive being able to match credit cards
digital touchpoints to create a closed- or other attributes with identity
loop omnichannel measurement system at the physical point of sale
for networks. makes a huge difference,”
Velez said.
These touchpoints range from
interactive kiosks, Wi-Fi tracking,
smart end caps or any type of physical
ad unit that can connect to a customer
profile. They allow retailers to track
customer behavior and purchases
through more interactive data
exchanges and connect them to online
purchases and profiles. Guide to Next. 12This is also an important opportunity
to look at the connection between
Improving customer customer data and modern privacy,
data quality through progressive consent, and preference
customer data management technology. This is critical
platforms (CDPs) and to continuing to hold customer trust
customer 360 profiles and stay compliant with the changing
privacy and regulatory landscape.
Retail media networks are built on
customer data, and retailers will The shift from advertising to
continue to improve the quality of personalization in retail media RMNs
this data. will continue to evolve with trends
through investing in their digital
This effort will increase the value capabilities, especially as more networks
of advertising real estate for CPG enter a saturated market.
companies and other marketers that
are using RMN data to connect with So, what’s the key for retailers to
their customers. stand out among other networks?
Personalization. RMNs that can
Retailers that don’t already have get the right product in front of the
consolidated CDPs with 360-degree right consumer at the right time will
customer profiles will look to create prove much more valuable to brand
them. Those that do will further advertisers.
integrate their data into a golden
customer record and connect it to their “You might be selling your own
retail media offerings. CDPs that have branded products against advertiser
360-degree customer profiles will have products as well. So, what’s important
the data co-ops and technologies to is thinking about your advertising
future-proof against signal and cookie as a personalized experience for the
loss. consumer, not just ad units,” Velez said.
Guide to Next. 13Guide to Next. 14
Sustainable
Supply Chain
THE KEY TO RETAILERS’ SUSTAINABILITY GOALS
In the past, supply chain sustainability
was a “nice-to-have” for many retailers.
Understanding the origins of every product
and material was certainly optimal but not
always realistic or necessary.
Today, mounting consumer interest and
regulatory pressure around sustainability
mean retailers are investing in technology to
provide accurate supplier disclosures, reduce
emissions and decrease waste.
But the road to meeting consumer and
regulatory standards isn’t perfectly clear. There
are many ways to achieve the elusive idea of
“sustainability,” and each retailer has unique
challenges regarding environmental, social
and governance (ESG) goals.
How are top retailers getting closer to their
net-zero goals through supply chains in 2023?
It starts with increasing supply chain visibility.
Guide to Next. 15What is supply
chain visibility?
Supply chain visibility is an accurate view of
the entire supply chain from end to end. This
means seeing where individual products and
materials are in the supply chain journey and
where they come from, including all external
partners.
Guide to Next. 16It starts with raw sourcing, and it INTERNAL VISIBILIT Y
doesn’t end when the customer T H R O U G H S U P P LY C H A I N
CONTROL TOWERS
purchases the product. For example,
Pre-COVID, many retailers had
what do consumers do with the
less visibility over the supply chain
packaging? If consumers return
journey, and major disruptions
products, where do they end up?
weren’t as frequent.
The entire lifespan of the product Now, retailers have the impetus to gain
and packaging itself has become greater control and knowledge of the
increasingly relevant to retailers and entire supply chain through technology
consumers alike. and overall digitization.
Increased visibility, especially real-time IoT technologies like RFID tags, supply
visibility, is a top concern for the retail chain control towers, blockchains and
industry in 2023. data platforms have given retailers more
visibility than ever before.
E X T E R N A L S U P P LY C H A I N
Internal supply VISIBILIT Y THROUGH
T R A N S PA R E N C Y T O
chain visibility vs. CONSUMERS
Consumers and regulatory bodies are
external supply also interested in the end-to-end supply
chain visibility chain, especially when it comes to
sourcing. Customers want to know if the
products they’re buying are coming from
In the past, supply chain visibility sustainable suppliers that practice ethical
focused on internal oversight of the end- labor standards.
to-end supply chain, but it’s now taken on
a much broader meaning that includes Not only are retailers focusing on
external stakeholders, like consumers. tracking products in the first place,
but they also have to figure out the
best way to communicate that
information to consumers.
Guide to Next. 17Why is supply
chain visibility T H E FA S H I O N S U S TA I N A B I L I T Y
important now? A N D S O C I A L AC C O U N TA B I L I T Y
AC T
In January 2022, the New York State
From ESG targets to supply chain Senate unveiled an act requiring
volatility, there are a variety of emerging fashion retailers or manufacturers
external conditions creating pressure doing business in the state to conduct
and incentive for retailers to gain end- “good faith” supply chain mapping and
to-end visibility in 2023. disclose at least 50% of their suppliers
across all tiers of production.
In the past year, U.S. state and
federal governments have considered
regulations related to supplier and
carbon emissions disclosures for CPG
only
companies and retailers.
T H E S E C ’ S C O R P O R AT E 21%
C L I M AT E R I S K D I S C L O S U R E
RULE
In March 2022, the U.S. Securities
and Exchange Commission (SEC) OF FASHION FIRMS CURRENTLY
proposed a rule requiring all publicly NAME THEIR SUPPLIERS
traded companies to disclose materials PUBLICLY SINCE JUNE 2022.
emissions made by a company’s
suppliers, detailed plans for meeting The act would also require these
emissions offset pledges, and reliance businesses to publicly set and track
on offsets. ESG targets, including employee wages,
greenhouse gas emissions, and the use
While this rule is not currently in effect, of recycled materials.
it could require emissions data from
Tier 1 and Tier 2, 3, 4 or 5 suppliers. These proposals represent a growing
This means that not only would push for retailers to verify ethical and
retailers need to have accurate supplier sustainable labor practices across the
information, but emissions information board—and a need for them to pick up
as well. the pace.
Guide to Next. 18R E TA I L E R N E T - Z E R O CONSUMER DEMAND FOR
E M I S S I O N S G OA L S S U S TA I N A B L E S O U R C I N G
Many retailers are chasing ambitious Consumers are growing wary of
“net-zero” carbon emissions goals “greenwashing,” empty promises or
through lowering carbon emissions green labels with no action
and buying offset credits by 2030, behind them.
2040 or 2050.
They want to know where products
According to the Science-Based are coming from and how they can be
Targets initiative (SBTi), 45 major reused or recycled to reduce waste.
global retailers have committed to
a net-zero target, up from just 13 Research shows that consumers do
in 2021. care about ethical sourcing and would
even pay more for it.
Other retailers are focused on different
In the next year, it’s time for
sustainability targets, such as reducing
companies to combine innovation,
greenhouse gas (GHG) emissions
sustainability, and profit goals, starting
by a certain percentage within a set
with supply chain visibility and
timeframe. Fifty-two retailers have
transparency with consumers.
committed to non-net-zero targets as
of 2022, up from 40 in 2021.
However, only a small portion of
retailers are on track to meet those
“
goals. The rest are looking for
tangible ways to make progress in
the coming year.
Customers and companies want to know
where products are coming from—and
if they’re being produced using non-
standard practices. There’s an element of
”
‘react or act’ before it’s too late.
SAT Y E N D R A PA L , G LO BA L O M N I F U L F I L L M E N T
PRACTICE LEAD AT PUBLICIS SAPIENT
Guide to Next. 19Three ways
retailers will
improve supply
chain visibility
in 2023
Retailers will continue to make strides
in supply chain visibility this year
through technology and transparency
alike.
While significant near-term production
changes are overwhelming, efforts
to analyze and disclose supply chain
practices can make an arguably greater
impact.
Guide to Next. 20Supplier transparency
through blockchain
and cryptocurrency
With growing regulatory and consumer While many people think that
concern toward reporting emissions, cryptocurrency needs a monetary
retailers are looking past their value, it can also be used to tokenize
own ESGs and into their suppliers’ physical products on the blockchain.
sustainability. Both blockchain and Every single product moving through
cryptocurrency technology are growing the supply chain could be attached to
tools that can power end-to-end certain digital tokens.
visibility, by allowing external parties,
like vendors and suppliers, to plug in “Retailers can create a digital twin of
data. their inventory—or some type of API—
that can grab product information and
“Blockchain is essentially a transfer it into a Web 3.0 environment,”
decentralized trust agent,” said Erid said AJ Dalal, Managing Director, Data
Haderaj, Product Manager at Publicis & Web3 Strategy at Publicis Sapient.
Sapient and Web3 consultant. “You “Using a cryptocurrency to tokenize
can, in real time, track your data and and move things across the supply
ensure there’s no kind of misconduct chain allows you to have real-time
or malicious actors, because once it’s inventory updates.”
on the blockchain, it can’t be tampered
with.” In the future, the supply chain
verification process could become even
For example, in a grocery supply chain, more automatic—through geospatial
farmers, shipping agents, packers and information using satellite imagery of
retailers could input quality product a particular deforestation area, or the
data into a cloud-based system, offering provenance of raw materials, which
more protection over food perishability would all be represented in these digital
and helping avoid food waste. tokens.
Guide to Next. 21Artificial intelligence and
machine learning for
demand forecasting
A key part of the end-to-end supply Artificial intelligence (AI) will be a
chain is what happens to the products crucial element of accurate demand
when they’re sitting on shelves. forecasting for retailers in the future,
and more and more retailers will begin
Retailers were weighed down by excess to invest once they’ve implemented
inventory in 2022 and are looking for better tracking across the supply chain.
permanent solutions to better forecast
demand in 2023. Not only is food and Walmart, for example, has invested
other product waste unsustainable, but in technology to automatically scan
it’s also not profitable. and count stock as soon as it arrives at
consolidation centers.
“In the past, retailers had supply
chain visibility from external vendors,
purchase orders and more,” Pal said.
“But if you only care about when things
are landing, you only know if something
is going to be delayed when it’s actually
delayed. And by then, it’s too late.”
The sooner retailers invest in this
technology, the better the algorithms will
become for the future—and the more
sustainable supply chains will become.
Guide to Next. 22Consumer transparency
and involvement with
circular supply chains
In 2023, circular supply chains will a picture that a customer submits.
become the norm—starting with For example, for every five bottles
consumer transparency. A circular a customer recycles, they could
supply chain ends with recycling receive a token for a 10% discount
or reusing a product instead of on the next product. By employing
throwing it away. This can happen blockchain technology, the retailer
through the retailer, through the can easily see how many tokens each
consumer or through a joint effort. person holds in real time.”
Companies can build better Retailers can use this technology
relationships with their consumers to collect more meaningful data
by telling “product stories” and on where products go at the
involving their consumers in the end of their supply chains—and
entire journey of the product—from work with customers to become
suppliers to sustainable disposal. more sustainable together and
remain relevant through the
Many retailers have pledged to entire customer journey. While
design their own branded products visibility and transparency alone
with sustainable packaging as part will not immediately reduce
of a circular economy. While the carbon emissions next year, they
shift in packaging design is crucial, are essential in determining future
it’s also important that retailers production changes that will achieve
communicate recycling options to ESG goals.
consumers in a meaningful way.
“Companies can use blockchain
to reward customers for certain
actions,” Haderaj said. “A retailer’s
app can verify that a product has
been recycled by using AI to analyze
Guide to Next. 23Guide to Next. 24
The Return to
In-Store Shopping
THE RETURN TO IN-STORE SHOPPING: A proliferation of new commerce channels
HOW TECHNOLOGY IS FUELING has prompted many retailers to go back to
CUSTOMER EXPERIENCE the drawing board and re-evaluate what the
original in-store channel should look like.
Today, a consumer has access to an infinite
number of products right at their fingertips. “You need to create something that engages
With a computer or phone, they can shop customers in a new way in order to draw
for hours without leaving home, so why them into the store when they could just buy
would they? online,” said Sara Alloy, North America Retail
Experience Industry Lead at Publicis Sapient.
Interestingly enough, the end of COVID-19 “Retailers are going to have to think bigger
lockdowns led to a departure from couch and consider what’s important to customers
surfing and return to in-store shopping. now to engage them and give them a reason
According to Publicis Sapient research, to shop in-person.”
almost nine in 10 (88%) of consumers prefer
to shop in-store for some items. How will top retailers meet customers’
appetites for the in-store experience? Behind
The top three customer reasons for shopping the flashy pop-ups and buzzworthy concepts
in-store instead of online are to browse is a strong foundation of interconnected
products, touch products and try on clothing. technology.
But one thing is clear: Now that online
shopping has brought new expectations of
convenience, the next era of in-store retail has
a higher standard to meet.
Guide to Next. 25“
Brands recognize they
are competing on What will a best-in-class
experience. When a
customer has a really
store experience look
good in-store shopping like in 2023?
experience with a
At the end of the day, customers still enjoy going to
brand, that sets the bar the store—they just have higher expectations. Certain
higher for everywhere well-accepted frustrations of the past, like long checkout
”
lines, confusing store layouts or carpets from the 1980s
else they shop.
may be reason enough to find a new retailer or switch
to Amazon. 62% of customers say they would stop
JAC K I E WA L K E R , R E TA I L
shopping at a retailer if the experience is unpleasant.
E X P E R I E N C E S T R A T E GY L E A D
PUBLICIS SAPIENT
Often, these best-in-class store experiences do one of
two things: create efficiency or create engagement.
Guide to Next. 26MAKING THE IN-STORE RETAIL MAKING THE IN-STORE RETAIL Wawa is another retailer that’s mastered
EXPERIENCE MORE EFFICIENT EXPERIENCE MORE ENGAGING in-store engagement with its ordering
Customers are now browsing, buying, There are also many opportunities kiosks. The kiosks allow customers
picking up and returning merchandise for retail stores to up their game on to quickly and easily browse through
through various interaction points, engagement compared to e-commerce menu options to build custom
and their choices are often made shopping. In the past, stores have hoagies, get prompted to add certain
based on what is most convenient in relied on associate-led or conversation- items to their order and see seasonal
that particular circumstance. Target’s based engagement strategies. Today, promotions.
drive-up pickup option is seamless for with staff shortages, many stores are
customers and has been scaled to all turning toward more technology-based The PetSmart app goes even further
their store locations. Customers can experiences to connect with customers through personalized content and an
rely on it, and it makes their shopping in-store. According to Publicis Sapient in-app game called “Treat Trail” that
journey simpler. research, 76% of customers engage with allows users to rack up coupons and
retailer apps in-store to locate products rewards. After uploading personal
A key bottleneck point when shopping and look for reviews, deals or clothing pet information, the app curates
brick-and-mortar is the point of sale, fit information. customized checklists and articles
and with e-commerce, customers based on the type of pet to deeply
have gotten used to a faster and easier For example, Home Depot’s mobile engage users.
checkout. At most grocery stores today, app allows users to see store maps to
customers or checkout clerks still have navigate to different items, scan product Some brands have looked to larger-
to scan each item individually—and for barcodes to read product reviews, scale experiential installations in
produce, even enter in each product take photos of items in their home physical retail. And while some of these
code themselves. Many grocery retailers that they need to replace and reverse experimental flagship store experiences
are testing a checkout-free system that image search to find the same products can be incredibly engaging for
would allow customers to just walk in-store. The app also integrates AR, customers, most of them are difficult
out or scan their entire cart at once, so customers can visualize how certain to scale.
providing an experience almost as furniture items would fit in their own
seamless as hitting the “Deliver” button space.
after grocery shopping online.
“When retailers are thinking about activations in their
stores, they have to consider how to impact the largest
number of customers possible. It really has to be a
deliberate choice to heavily invest in experiences that can
only ever scale to a small subset of stores.”
J A C K I E W A L K E R , R E T A I L E X P E R I E N C E S T R A T E GY L E A D
PUBLICIS SAPIENT
Guide to Next. 27“The longer we can keep CONNECTING PHYSICAL AND DIGITAL
SHOPPING EXPERIENCES TOGETHER
customers engaged with
The best retail in-store experiences
a brand, the more likely it
are both efficient and engaging when
becomes that the customer will
e-commerce and brick-and-mortar
not only convert once but will
blend together. This means that at each
become a repeat customer,”
stage of the customer journey, whether
Alloy said. “Retailers have that’s browsing on social media,
improved tactics to re-engage entering a retail store or shopping on
customers who abandon carts a retailer’s website, customers have a
online, but there is more work blend of personalized shopping offers
to be done to extend high- and experiences that are fully cohesive.
touch customer service in an
automated and scalable way One piece of this is consistent
when customers are engaging branding across channels—from
with retailers through multiple the website, to the app, to the print
channels.” marketing and merchandising in the
store. Keeping consistent, authentic
branding in-store and online creates
a better customer experience.
This relates to marketing offers, too.
Customers that normally shop at a
retailer online still expect to be known
as customers when they enter a new
channel, like the store. The key to
building loyalty for retailers is matching
experiences across channels to amplify
the strengths of each and unify the
brand. RFID technology embedded in
loyalty cards, like store credit cards,
retains customer information and
allows retailers to identify when a
customer is in a store and prompt in-
store kiosks to display relevant ads.
Guide to Next. 28Five areas of the in-store
experience that deliver
the most value
From store layout, to point of sale, to checkout, retailers are
working to modernize their technology and improve every
touchpoint for the customer. There are five key interaction
points where retailers can re-think standard methods of
operating in a new era of in-store shopping—and which will
bring the most value:
Guide to Next. 29Replicating digital
shopping behavior
The rise in popularity of e-commerce Another example of this customer
has provided an interesting view into behavior is influencer interaction and
customer shopping behavior and needs styling when it comes to clothing.
that retailers have never had access Online, customers can easily see
to. While certain aspects of online different outfit options for certain
shopping don’t need to be replicated products styled by different models
in an in-store setting, others are worth and influencers. In stores, retailers are
experimenting with. still relying on mannequins to show off
products.
For example, many customers use their
online shopping carts as virtual wish Retailers have the opportunity to use
lists. They will fill a cart with items, mobile apps, as well as cart or dressing
basically bookmarking them to go sift room design, to enable customers to
through them later to determine which replicate this online behavior in-store.
items they’ll actually purchase. By connecting a mobile app to in-store
inventory, customers could build their
“When customers are shopping in- “cart” on their mobile phone and even
store and physically loading a shopping get a fitting room started, which would
cart, it is very different than online allow them to see their cost total, save
“Add to Cart” behavior,” Alloy said. their cart history and see clothing on
“In an online cart, it’s a bit easier to real body types.
compare and discard items—and watch
the order total—than it is with physical
merchandise.”
Guide to Next. 30Smart inventory
Smart, or intelligent, inventory is an often-
overlooked aspect of the back-end store
experience that becomes really important
at the intersection of physical and digital
Digital product
shopping. Today, many customers want to
information look at real-time e-commerce and in-store
In the age of the internet, customers are used inventory at the same time.
to being more informed than ever before.
E-commerce sites, online forums and news In fact, 72% of customers say they’ve
articles alike offer customer reviews and checked store inventory online before
feedback to factor into purchase decisions. visiting to ensure the location has what
they want. One of the biggest advantages
While in-store shopping relies on instant of in-store shopping is speed and
gratification as a sales tactic, many immediacy, so a customer might choose
customers still look for a higher level of to come to a store because they’re looking
product information and social proof. for a specific product right then and there,
and they don’t have to pay for shipping.
Retailers can use different technology pieces
such as digital kiosks, QR codes or even AR “How annoying is it when you as a
mobile apps to provide product details. customer look on the website, see you
can order something for pickup, and
then two hours later, the retailer emails
you canceling your order because they
didn’t actually have the item at the store?”
Walker said.
72%
Also, many customers will make an
additional, unplanned purchase while they
are in the store to pick up their buy online,
pick up in-store (BOPIS) order, and the
same is true of their online shopping
O F C U S T O M E R S S AY habits. While 46% of customers shop
THEY’VE CHECKED
with something specific in mind and only
S TO R E I N V E N TO RY
ONLINE BEFORE
buy that item, 36% will get inspired to
VISITIN G LOC ATION . purchase more while shopping.
Guide to Next. 31Sales associate
interactions
Many products, like running shoes or
sports equipment, could be sold better
with an explanation from a human
expert. However, modern technology
has the ability to elevate those
Returns
interactions for both the sales associate
optimization
and the customer.
Online shopping has much higher online, with no added cost, and vice
return rates than in-store shopping, versa. Over 70% of customers say they’d
“We have reached a point and many customers are taking those be likely to stop shopping at a retailer
where we can make it much returns in-store, creating disruption. that charged for shipping back return
easier for employees to better While many retailers are improving items. On top of that, customers no
serve customers with digital the in-store return experience for longer expect to wait in a long line for
tools,” Alloy said. “Armed with customers, it’s still a key area that’s ripe returns. Contactless returns or quick
the right data, employees can for change. drop-offs are better alternatives.
have much better interactions
with customers and create far “The interplay between the online As we look to the future of brick-and-
more value.” experience and the store experience mortar retail, there is more value to be
when it comes to buy online, pick found at the intersection of physical
Some retailers are integrating tablets
up in-store (BOPIS) and buy online, and digital. Many experiences are better
into the sales experience, providing
return in-store (BORIS) still has a lot in-store, and retailers need to embrace
sales associates with key customer
of room for improvement, especially the natural propensity of customers to
information. This not only helps
when combined with the rise of in-store browse, experience products tangibly
customers make more informed
traffic and staffing shortages,” Walker and be inspired in ways that just aren’t
decisions, but also makes it easier
said. “There is more work for employees possible when shopping online. There
for any sales associate to continue a
to deal with the needs of customers is also plenty of work to be done to
conversation with a customer based
coming in from online, and the tools improve the store associate experience,
on previous interactions, especially as
and processes in place don’t make those which directly impacts the ability to
retailers struggle with staffing.
interactions seamless, which can have better serve customers.
a negative effect on experience for all
customers in-store.” “It’s not really about thinking of the
next big, cool thing,” says Walker. “It’s
At the very least, it’s key for retailers to about application at scale and better
allow customers to return products to meeting customer needs.”
stores even if they’ve purchased them
Guide to Next. 32Guide to Next. 33
Retail
in Web 3.0
WHAT DOES RETAIL LOOK LIKE IN WEB 3.0?
HOW RETAILERS ARE APPROACHING NFTs,
VIRTUAL REALITY AND AI
As we head into 2023, some retailers are
wondering: Is the metaverse/Web 3.0 hype
dying down? When Mark Zuckerberg
announced Facebook’s name change
to “Meta” and shared his vision for a
“metaverse,” the buzz and excitement around
virtual societies and decentralized technology
dominated industry conversations.
Now, as most consumers still have yet to
explore the space, the initial hype is waning.
According to recent Publicis Sapient research,
about half of U.S. consumers ages 18–34 have
accessed the metaverse, but nearly half of
the younger demographic is still unfamiliar
with the concept. However, that doesn’t mean
that investment or business opportunities
are dying with it. In fact, now is the time
that the biggest players in the metaverse and
Web 3.0 space are testing virtual experiences,
improving baseline technology and building
talent to dominate the future internet.
Guide to Next. 34The metaverse
of the present
is not the
metaverse of the
future
According to AJ Dalal, Managing What does this mean for retailers?
Director, Data & Web3 Strategy at Rather than investing too heavily in any
Publicis Sapient, in five to seven years, one metaverse or blockchain platform,
It’s time to the metaverse will not be tied to a it’s time to test different experiences,
test different specific world, like Decentraland or evaluate Web 3.0 applications and look
Roblox. Instead, the metaverse will be for friction points in their customer
experiences, an extension of any experience layer. experience that these applications could
evaluate Web Any website or digital experience will solve.
have an augmented reality/virtual
3.0 applications
reality (AR/VR) component and will Retailers can expect to grow
and look for exist on the new Web 3.0 iteration of exponentially in three key areas in
friction points in internet technology. 2023 when it comes to Web 3.0 and the
metaverse: non-fungible tokens (NFTs),
their customer “Right now, we are seeing the first AR/VR and artificial intelligence/
experience that wave of innovation—of companies machine learning (AI/ML).
risking it all to solve a problem,” Dalal
these applications
said. “The death of this wave, like the
could solve. death of AOL or MyVista, for example,
opens the door for the second wave,
where innovation will have sustainable
growth.”
Guide to Next. 35What does Web owned by large media and tech
companies. While these companies
3.0 mean for rely on selling this data to advertisers,
creators and consumers alike who
retailers? contribute the data have little say in
how any of this system works. In a
The third era of the web, or Web 3.0, decentralized model, they would take
doesn’t currently exist today and, more control, or ownership, of this
in fact, is still just an idea of what a data.
different, improved internet could
look like. While many experts have Similarly, media conglomerates have
thoughts on exactly what problems become “walled gardens,” meaning
exist with shopping today that could that they don’t interact with each
be fixed in Web 3.0, broad solutions other, creating friction between
have yet to be actualized. different siloed monopolies. Many
experts currently building Web 3.0 are
Most ideas for Web 3.0 are based attempting to use NFTs, blockchains
on two principles: ownership and and AI/ML to decrease this friction
decentralized authority. Today, digital and spread out ownership and
assets, as well as personal data, are authority among users.
Guide to Next. 36What could Web
3.0 solve for retail?
20% Shopping will likely become more compensated for videos or personal
seamless for shoppers, making data by social media networks—at
products more findable. For example, least not in a meaningful way. In
internet searchability could be addition, 64% of consumers also worry
OF CONSUMERS
improved in Web 3.0 using blockchain- that their data and information will
PREDICT THEY’LL
SOON BE ABLE TO based search engines. Currently, when be collected if they use the metaverse.
TA K E T H E I R P RO F I L E S a consumer starts a product search One proposition for Web 3.0 social
A N D DATA B E T W E E N on Amazon and doesn’t find what networks is the ability to choose when
M E T AV E R S E G A M E S
they’re looking for, they have to start and how users share their data with
the same product search over again on companies in exchange for some
Google Shopping or Walmart.com, for sort of value, including payment for
example. In the future, it’s possible that content creators.
consumers could save their searches
64% and carry them through the different
retailer websites they’re browsing. In
However, Web 3.0 is still just a
nebulous collection of these specific
fact, 20% of consumers predict they’ll use cases, nascent technology and
soon be able to take their profiles idealistic projections. Retailers can
and data between metaverse games, find it difficult to determine exactly
OF CONSUMERS WORRY according to Publicis Sapient research. how their business should change and
THAT THEIR DATA AND Another potential application of Web how to prepare for it.
INFORMATION WILL BE 3.0 could improve the management
COLLECTED IF THEY USE of customer data. Content creators
THE METAVERSE. and casual users alike aren’t currently
Guide to Next. 37How can retailers
visualize the future
Web 3.0?
One way to think about the future
Web 3.0 is a comparison with
the creation of the iPhone and its
subsequent influence on society.
Just as the Nokia of the past doesn’t
compare to the iPhone of the present,
the future of shopping will look quite
different than the emergent Web3 use
cases that retailers are experimenting
with today. But that doesn’t mean that
experimentation and investments
aren’t important.
Retailers can prepare for several aspects
of the future of shopping that will also
see significant growth in the next year.
“In that announcement, Steve Jobs explained how the
iPhone basically took what 10 devices could do and
combined it into one,” Dalal said. “Think of everything
that the iPhone has unlocked in our lives over the
last two decades. It impacts how we do everything.
What we are exploring right now with Web3 could be
comparable to that innovation.”
Guide to Next. 38How the use of NFTs
will change for retail
Currently, only a small percentage across e-commerce and physical stores
of the population owns NFTs. NFTs in real time can be quite difficult.
became popular through specific digital This is a space where blockchain
art and currency uses, which haven’t technology would be especially helpful,
yet translated to broader applications. and many retailers are starting to jump
“
Most people aren’t paying for goods in. Starbucks, for example, has one of
and services with Bitcoin or Ethereum the world’s largest and most successful
either, and they haven’t purchased loyalty programs. The chain recently
Consumers
tokenized collectibles. Only 14% of announced its foray into NFTs through
and brands have U.S. consumers ages 18–34 own NFTs, its loyalty programs, where members
realized that NFTs need and the percentage lowers to 7% for will be able to redeem NFTs for special
the general population, according to products and experiences.
to offer some type of Publicis Sapient research.
value proposition. What However, it’s important to note that
While retailers should still prepare to using NFTs to build out a loyalty
are customers currently
accept cryptocurrency for purchases program can’t solve every problem.
engaging with that and develop digital tokens for physical
could be improved with products, NFTs will become much “If your loyalty program is not
”
more useful in loyalty programs and delivering A+ results, what will change
Web3? inventory management. In fact, one with Web3 technology that will deliver
quarter of consumers in the same study A+ results? And is that underpinned
AJ DAL AL, MANAGIN G believe that brands will soon embed by a proper strategy and utility?” Dalal
D I R E C TO R , DATA & W E B 3
loyalty points and rewards within NFTs. said.
S T R AT E GY
Loyalty programs are a major effort
carried out by most retailers. Loyalty
points exist as a debt— as owed 25%
products or services to customers.
Currently, tracking and securely of consumers believe that
validating loyalty points and rewards brands will soon embed
loyalty points and rewards
within NFTs.
Guide to Next. 39NFTs are also gaining traction in metaverse worlds and AR experiences “We are at the beginning of the
inventory management. With NFTs, can be glitchy with poor image quality. journey in mass producing AR and VR
retailers can code all physical products Most VR headsets are also a bit too hardware at affordable prices, which
as digital twins in Web 3.0, tying online bulky for daily wear. means retailers should prepare to
inventory with warehouse inventory double down on this technology,” Dalal
and cross-store inventory to see where Luckily, the technology is drastically said.
physical products are at all times. improving. Apple is rumored to release
its first VR headset next year, and While the technology isn’t fully
Before diving in, retailers should Sony’s PSVR 2 is heading down the optimized, retailers can experiment
carefully consider which blockchain pipeline as well. As this hardware and with app features and other experiences
technology to use. Because Web 3.0 its accompanying experiences improve, to see what works best and how
technology is still in its early days, AR and VR can begin to influence how customers engage. This will help them
it’s possible certain companies will customers purchase products. 20% prepare for a future where AR/VR is the
develop faster and end up dominating of U.S. consumers between ages 18 norm in a shopping experience.
others. Brands should test multiple and 34 currently own a virtual reality
blockchains by setting objectives and device, and 40% said they’d be likely
testing performance before choosing a to purchase one within the next year,
blockchain and fully investing in it. according to Publicis Sapient research.
Some retailers, like luxury clothing
house Hugo Boss, have already started
How AR/VR to dive in. The company is testing AR
to create digital mannequins with
wearables will customers’ exact body measurements to
try on clothing virtually. Amazon has
develop launched a similar feature for shoe try-
on, where customers
can use their phone camera to see how
Another Web3 space that should see
a pair of shoes would look on their feet
significant growth over the next year
from different angles. This use is also
is AR/VR, which will be especially
applicable to furniture. About 40% of
relevant to the retail shopping
U.S. consumers between ages 18 and
experience. Two of the biggest obstacles
34 are interested in trying on clothes in
to the wide-scale adoption of this
the metaverse and visualizing other 3D
technology are the hardware and
products before making purchases.
experience, which still aren’t up to par
with many consumer standards. Often
Guide to Next. 40How AI/ML will impact
the future of Web 2.0
While much of the work dedicated While most retailers shouldn’t rely on “There are a lot of AI applications that
to improving the web experience is AI to generate photos, text or hold can be used to foster growth in Web3
focused on Web 3.0, the use of AI/ML all conversations with customers, the and maintain the existing world of
has the ability to drastically impact technology will likely improve enough Web2. People talk about how their jobs
the current state of Web2, and it’s to be able to take over the majority of will be at risk, but that’s not really the
something retailers should invest in these responsibilities in the future. case. Your job may just shift to focus on
moving forward. Before Web3 becomes Web3, and AI/ML can continue content
a reality, we’ll likely experience a hybrid However, many retailers and tech for Web2,” Dalal said.
version of Web2, like Web2.5, and AI/ startups have already started to
ML will likely be able to take on work experiment in the AI space with Retailers can embrace this
faster with limited resources. personalized shopping. Pinterest
innovation by testing and
acquired a shopping app called THE
experimenting with NFTs, AR/
One of the biggest use cases for AI YES, which allows customers to browse
VR, metaverse experiences and
already is targeted advertising, where through pieces by swiping right or
AI/ML today while still knowing
automation is already efficiently left while a supporting AI learns
powering thousands of minor decisions
that these technologies are in
customer preferences and curates
to personalize ad experiences online. better selections. Rather than creating their infancy and will continue
Other uses for AI are currently still in increasingly complex filters to facilitate to evolve.
their beginning stages but are steadily the shopping experience, retailers could
improving. rely on AI to create intelligent shopping
algorithms to deliver individualized
For example, while most advanced experiences.
AI-powered chatbots can hold
conversations with customers, they still According to Dalal, while AI is helping
haven’t reached the level of service of a to support functions like this in Web
human employee. Similarly, AI writers 2.0, much of the workforce could then
or content generators can help optimize transition to building out new shopping
content and even generate copy for experiences fit for Web 3.0.
them in some instances. Still, these
chatbots can’t yet create longer stories
or articles on their own.
Guide to Next. 41Preparing your
company for
Web 3.0
Just as e-commerce and Web 2.0 have
transformed the retail industry, Web
3.0 is poised to do the same more
excitingly. While many experts are
focused on the initial hype—and even
fear—surrounding the buzzword, a
significant opportunity to make the
shopping experience better lies ahead.
“It’s like rolling a snowball down Mount
Everest. Shoppers won’t be limited to
a phone, laptop or other device, and
we can take digital shopping across
all of our senses, including touch,
hearing and sight. This is a monumental
opportunity in our world,” Dalal said.
Retailers can embrace this innovation
by testing and experimenting with
NFTs, AR/VR, metaverse experiences
and AI/ML today while still knowing
that these technologies are in their
infancy and will continue to evolve.
What’s most important for retailers is
understanding the current limitations
of Web3 technology yet still choosing
to solve a business use case and build a
new architecture around it.
Guide to Next. 42Next starts now.
To get started, please visit publicissapient.com/retail
Or contact us anytime:
SUDIP MAZUMDER
Retail Industry Lead, North America
sudip.mazumder@publicissapient.com
GUY ELLIOTT
Retail Industry Lead, EMEA & APAC
guy.elliott@publicissapient.com
Guide to Next. 43Publicis Sapient is a digital business transformation partner helping retailers like Carrefour, Pandora and Falabella get
digitally enabled, both in the way they work and the way they serve their customers. As digital pioneers with 20,000
people and 50+ offices around the globe, our experience in technology, data sciences, consulting and customer
obsession enables us to evolve our clients’ businesses with products and services that put shoppers first.
© 2022 Publicis
Guide Sapient Corporation
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