Michael Klein

Putting powerful tech in the hands of consumers changes expectations. My latest Retail Week column explores the new GenAI releases and the implications for retail. https://lnkd.in/e-AaDdcf

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Resetting the Growth Agenda - Bain & Co TL/DR: most CPG’s have not delivered volume driven growth in recent years, most growth is a result of significant inflation in both wholesale and retail pricing. The message here is to achieve growth, the required strategies must have a positive impact on consumers, customers, employees and the planet. Converting these stakeholder targets into six priorities: ·        Winning over the consumer ·        Winning with the customer ·        Smart complexity ·        The new digital agenda ·        Leading on sustainability ·        Tomorrow’s operating model CONSUMER: Leverage insights to determine markets, channels, categories, and offerings. Prioritize your innovation and growth agenda against the fastest growing/ most profitable targets. Emerging markets will be key here but you must be prepared to provide unique resources. CUSTOMER: In mature markets, improved measurement capabilities on return on trade investments is critical, as is the willingness to reallocate spending to the most profitable channels and customers. In emerging markets, staying ahead of rapid evolution key, with emphasis on taking control of your brand with respect to eB2B marketplaces. SMART COMLPEXITY Work backwards from the consumer and apply your supply chain capabilities to deliver the balance needed. Rationalization of SKUs, brands, or markets ranks high in improving/reducing complexity, but executive teams must also fully understand the benefits the right level of complexity can bring. DIGITALIZATION Hyperconnected CPGs will generate faster, better results for a broad range of stakeholders. Areas of focus are leveraging predictive AI and more detailed supply chain data/traceability Data strategies that strengthen consumer insights should improve business decisions SUSTAINABILITY Take a proactive approach in achieving sustainability objectives Consumers want solutions and are willing to pay a little more for them Retailers are looking for suppliers that can help them reduce their carbon footprint Sustainability goal will only be achieved if backed by incentives and KPIs OPERATING MODEL Support and resource frontline teams with dynamic budgeting and permission to test and learn Keep them close to consumers leveraging insights to power innovation and execution. Pair the best talent with the biggest opportunities. Bain & Co states that “resetting the growth agenda is undeniably the top priority for consumer products this year.” But the current year focus must support longer-term growth, by balancing positive value to all stakeholders.

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This is a must-read for CMOs! Mars United Commerce recently spoke with CMOs at leading retailers to hear what business challenges they are currently facing. Michele Roney outlines three key capabilities retailer CMOs must build within their marketing organizations to help tackle these challenges. Link to read it in the comments 👇

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DTC/Digital Native Brands struggle to achieve scale. CPG portfolio's are stagnating. Consumers are trading down, and retailers owned brands are disproportionately growing. Target, Costco, Trader Joes, and Aldi owned brands are winning. Now Walmart has launched a formidable new elevated basics brand, BetterGoods. The best way to beat the Amazon/Temu/Shein/TikTok marketplaces is to sell products they don't have.

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Sam’s Club had a deal on Gen Z baloney last week. And CNBC was buying. The warehouse club CEO took to the air to tout its “68% growth in Gen Z members” over the past two years, citing Sam’s Club digital engagement as the primary driver. Of course, he didn’t mention the real reason for the Gen Z growth (which everyone seems to ignore these days): Gen Z has grown up. Two years ago, the eldest members were wrapping up college, and since then, become adults with all of the fun trappings of adulthood like leases, insurance, and, of course, warehouse club memberships. They were going to see explosive Gen Z growth no matter what because Gen Z aged into the buyer demo--and they love values. A big percentage spike was guaranteed because they were essentially starting at zero two years ago. (That isn’t to say Sam’s digital engagement is not enjoyed by its young members, however, it's in no way driving membership. If anything, it's increasing merchandise sales and retention.) You’ve heard me say it before and you’ll hear me say it again: 💡 Lifestage is FAR more insightful and actionable than generation. Always be sure you’re factoring it into to any youth marketing decisions. -- Also, as an avowed Costco and data stan, I did get a little ruffled when he inferred that Sam’s Club was becoming a Gen Z favorite over Costco. YPulse data pegs Costco’s total mindshare nearly 2x as high as Sam’s Club — and Gen Z thinks its 3x cooler (yes, we track coolness). Why? Costco’s public perception is far more in-line with Gen Z’s values than Sam’s (re: Walmart). Additionally, whether intentional or not, Costco crossed into youth cultural zeitgeist years ago. Young people have embraced the Costco memes, dupes, TikToks, and more from passionate fans. Just a simple hashtag search reveals TikTok’s # costco content is 4x higher than # samsclub. BRB - Craving that $1.50 hot dog rn. -- (H/T Joel Ponce for sharing the interview. You should check out his original post on it for great ideas on expanding on the club's digital efforts -- Roblox, anyone?)

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Costco is entering the rapidly expanding world of retail media networks. Costco, the third-largest retailer in the United States, is preparing to launch its own retail media network (RMN) to tap into its extensive loyalty membership program and shopper data. Costco's RMN will allow the company and advertisers to deliver targeted ads to its 74.5 million paid household members based on purchasing behavior. As Mark Williamson, Costco's Assistant Vice-President of retail media, stated, "We will not only help you reach a Costco member, but we will help you reach the right members in the right context based on past behavior." Retail media networks have become one of the fastest-growing ad-supported media channels, with eMarketer estimating global ad spending for RMNs to reach $140 billion in 2024. While Costco's entry into this market is later compared to competitors like Amazon, Walmart, and Target, it presents a significant opportunity for advertisers to reach Costco's loyal customer base. Nich Weinheimer, Executive Vice-President of Strategy at Skai, expressed excitement about Costco's RMN, stating that it "offers a unique advantage: the ability to effectively target buyers through membership retail media networks. Costco's extensive data on purchase behavior is nearly unmatched, allowing ads to target loyal shoppers based on their recent purchases, behaviors, demographics, cart sizes, and more." Although Costco is a latecomer to the RMN market, with Amazon holding a 77% share of U.S. retail media ad spend, Costco's large customer base and first-party data provide a significant opportunity for advertisers in the travel, telecom, and other service sectors to reach new, targeted audiences. As Costco continues to develop its RMN, it must collaborate with data companies to create a programmatic ad-buying platform and manage its shopper data and targeting capabilities. #costco #amazon #retailmedianetwork https://buff.ly/3L5PKDs

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Retail Today / Retail Renaissance: We are almost at the halfway point in 2024. What are the emerging trends? What retailers get it? #retailtrends Retailers that understand consumers are looking for “value”, not just price. BUT “low prices” still drive sales. It’s a “needs vs wants” environment, unless you can capture the aspirational shoppers attention. #lowprices RETAIL OVERVIEW: The retail industry is being driven by the “Big Three”, WALMART, AMAZON, COSTCO but watch TJX! #walmart #amazon #costco #tjx Home Improvement: HD and Lowes still off their Covid peak years. Ace Hardware with a flash of positive sales. #homedepot #lowes #acehardware Off-Price: This sector is on 🔥🔥🔥, getting stronger everyday. Ross, HomeGoods, Ollie’s, Burlington, Nordstrom Rack, etc… #ross #ollies #burlington #nordstromrack Mid-Tier Department Stores: Yes, Macy’s flashed some positive news but this sector is under tremendous pressure. Kohl’s, JCP and Macy’s are under attack from Fast-Fashion and they lost GenZ. #macys #jcpenny #kohls Speciality Retail: The good news, merchandise/product still matters! You can still make it a “wants” experience with the right product. Dick’s, Abercrombie, Hoka, Vuori, etc… There are hundreds of great brands driving sales through exciting products. #specialityretail Opportunity: Customers are focused on “value” but give them a compelling reason to buy, either through merchandise or experience, maybe both! #merchandise #product #retail #retailindustry #brandexperience #TopRetailExpert

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When it comes to retail trends, NRF’s annual list of the Top 100 Retailers shows that the pandemic and pandemic-era spending are starting to ease. That’s what David Marcotte, senior vice president of global retail and technology for Kantar, terms the “big trend” out of the National Retail Federation’s annual ranking of the industry’s 100 largest retailers by domestic retail sales. Kantar compiles the data and explores the Power Players in a variety of categories. #nrf #kantar #top100retailers

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This is a must-read for CMOs! Mars United Commerce recently spoke with CMOs at leading retailers to hear what business challenges they are currently facing. Michele Roney outlines three key capabilities retailer CMOs must build within their marketing organizations to help tackle these challenges. Link to read it in the comments 👇

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🔍 Consumer Behavior Insight: Trust vs. Value Fascinating to see that while 94% of US consumers surveyed do NOT trust Temu, 68% still shop there. This highlights how powerful prices, ease of use, and deals can be. Despite an instinctual feeling of distrust (System 1 thinking), more deliberate, analytical thinking (System 2) considers financial benefits strong enough to outweigh trust issues. Read more: https://lnkd.in/e7DbveKB

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Check out this insightful assessment by Dan Berthiaume on the state of Just-Walk-Out/Grab-and-Go models. Rich McMahon and I came to similar conclusions in a recent LinkedIn discussion. With years of experience in the industry, we see things not just as they are, but as they can and should be. Keep up with the latest developments in the industry by following our posts. #JustWalkOut #GrabAndGo #RetailTech

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Who else is coming to CommerceNext? Make sure to check out my session with Zach Epstein from Haus about incrementality testing: “From Insights to Action: How Newton Baby Uses Incrementality Experiments to Maximize Their ROI.”

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Retail is an ever-evolving industry that has seen its fair share of changes over the years. From traditional brick-and-mortar stores to the rise of e-commerce, product startups have had to adapt and keep up with changing consumer behavior. In recent years, technological advancements and shifting consumer preferences have caused significant disruptions in the retail landscape. Check out our latest blog post where we will discuss the latest trends in retail and how product startups can adapt to these changes. https://lnkd.in/gwqbiBd2 #retail #retailtrends #digitalmarketing #sustainability #ecommerce #customerservice #dataanalytics #omnichannel

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Wow, an actual retailer is making Retail Media Network headlines today. 🤣 After a few weeks of non Retailers making headlines launching RMNs (PayPal, United Airlines) and actual retailer is ramping up their right to win🏆 **2 noteworthy points:** 1️⃣ **Omni-channel**: Costco Wholesale is leveraging their membership model to create an effective omni-channel advertising opportunity that targets consumers online & offline at their physical stores. 📱🛒 2️⃣ **Creating Consumer Value**: Costco plans to use the high profit margins of their advertising network to offset shipping costs and keep prices low, like their famous $4.99 rotisserie chicken. 🍗💸 This strategy is likely to significantly boost Costco’s nascent RMN revenue by 4✖️ according to Mark Williamson BMO Capital Markets estimates their current nascent RMN revenue to be around $225 Million. $900 million at 90% gross profit margins should provide management with many strategic investment opportunities that go far beyond the immediate value the healthy advertising profit margins will provide. 💼📈 Well done Costco Wholesale 💪🏻👏🏻

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Another AVN season in the books (exhale). Not surprisingly, 72% of brands faced some level of challenges within their negotiations compared to 15% citing collaborative or efficient AVNs. 14% haven’t resolved their AVNs yet. According to our benchmarking, negotiating favorable terms is the #1 challenge brands face during AVNs. What challenges did you face within your AVN? And are you curious how your Amazon AVN experience, terms, and profitability compare your peers? Join me and Martin Heubel next Tuesday 6/25 where we’ll dig into the full results from our AVN Wrap-Up survey of 250+ brands. Register here: https://lnkd.in/eAD48b_g We’ll be covering: ✅ AVN intensity ✅ 2024 trade term %s ✅ AVN impact to brands’ margins ✅ Key profit levers for the year ahead ✅ and a chance to ask ALL your AVN questions! A must-attend for 1P vendors. See you there!

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Retail is powered by data. The future of retail is digital. Retail success is dependent on positive customer engagement (digital and physical). If you believe the above statements, why - if you are a retailer - would you deliberately hand over to a third-party your customer engagement, a growing revenue stream, and a source of ever more important first-party data? Yet that’s just what retailers and wholesalers have done by signing on to Instacart’s retail media network. If I’m a retailer or wholesaler, I get it. Instacart is the ‘Easy Button’. A one-stop shop for outsourcing online shopping, digital shopper engagement, and retail media. Choosing a third-party like Instacart removes major headaches and resource commitments for retailers. So I don’t blame retailers and wholesalers for partnering with third-parties like Instacart. But at what cost? As Instacart and other third-party marketplaces grow their influence, traditional retailers will increasingly be delegated to simply putting products on the shelf. CPG marketing funds are rapidly evolving towards digital solutions. How long do you think it will be before traditional trade promotion dollars will be dependent on digital capabilities like sophisticated targeting, digital engagement in the store, and digital offer delivery managed across a growing number of channels? All things Instacart is able to provide. So I get it. Grocery retail is incredibly tactical, the need to obsessively control operating expenses to eke out a profit. Thinking strategically and longer-term is a luxury that many retailers and wholesalers do not have. And I have to give Instacart credit. They saw a market opportunity and went after it, pivoting along the way to provide a growing array of tech solutions to retailers in addition to creating and growing their retail media network. Yet as we accelerate up and out technology’s exponential growth curve, that historical tactical focus, putting out the brush fires to survive another day, becomes increasingly dangerous. And understanding that we now live in a world that has never before existed, a world of exponential change, is now imperative for survival. That’s why I wrote Bionic Retail, my latest book. To help the retail industry understand that it is now in a new world and many of the old rules no longer apply. Succeeding in the exponential world requires new thinking and deliberately letting go of many past practices, processes, and beliefs that increasingly constrain retail and innovation. Maybe the ‘Easy Button’ isn’t going to be so easy after all. The Shelby Report ROFDA Instacart #grocery #groceryretail #grocerystrategy #grocerytech #groceryinnovation #retail #retailtech #retailstrategy #retailinnovation #CPG #CPGinnovation #retailmedianetworks #RMN #supermarket Center for Advancing Retail & Technology (CART) https://lnkd.in/gH93nm3A

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Hello Retail Friends,   I cannot stress enough how important fresh products are to grocery retailers. When it comes to inventory planning, “point solutions” that lack end-to-end integration and only address store-level planning simply are not enough!   Retailers need proven, multi-echelon planning solutions that extend beyond the store - unifying, automating, and optimizing planning in stores, DCs, and omnichannel. This is the only way to get crucial visibility and insight across the end-to-end value chain.   https://lnkd.in/ej53RsFV #supplychain #grocery #freshproduce How to improve retail fresh food inventory management | RELEX Solutions Tackle fresh food inventory management challenges head-on with the right strategies and robust planning software. www.relexsolutions.comhas context menuCompose

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BRILLIANT RESEARCH: Five 2024 Holiday Shopping Predictions https://lnkd.in/emwXStw7  Holiday shopping will look different for retailers this year.  After remaining largely resilient throughout four years of economic uncertainty, consumers are finally feeling the pinch.  Nearly a third of global shoppers (32%) reported using alternative credit services like buy now, pay later (BNPL) more frequently this year #retail Digital Commerce 360

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