Connected & Ready

Retail gets creative, with Tory Gundelach

Episode Summary

Retailers are being pressure tested in today's environment of rapid change. Which trends are expected to fade and which are here to stay? What technology is helping retailers the most? This episode of Connected & Ready features Tory Gundelach, Senior Vice President of Retail Insights at Kantar Consulting. Tory talks about characteristics of resilient retailers, how convenience is driving change, creative solutions to address current challenges, and her expectations for how consumer behavior and the customer experience will evolve. Dynamics 365 Commerce delivers a complete omni-channel retail solution that unifies back-office, in-store, and digital experiences. This end-to-end solution empowers retailers to personalize customer engagement, increase employee productivity, and optimize operations across physical and digital channels. Request a live demo today: https://aka.ms/AA8ku82

Episode Notes

Host Gemma Milne is joined by Tory Gundelach, Senior Vice President of Retail Insights at Kantar Consulting, to talk about how retailers were pressure-tested in 2020, how they are still adapting to the rapidly evolving environment, and facing ongoing uncertainty. They also delve into topics like the growth of e-commerce, the biggest key trends that have driven change over the past 12 months, and what might be next for retailers in 2021 and the years to come.

 

About Tory Gundelach

Tory is Senior Vice President of Retail Insights at Kantar Consulting who focuses on Target and the grocery channel. She has a rich background in retail that helps her spot emerging trends and understand both the strategic and tactical implications. Before joining Kantar in 2018, Tory held numerous roles in insights, merchandising, and strategy with 84.51°, dunnhumby, and Target. She holds an MBA and a bachelor of science in business from the University of Minnesota’s Carlson School of Management.

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Episode Transcription

Music playing: [00:00:01]

Gemma: [00:00:05] Hello and welcome. You're listening to Connected and Ready an ongoing conversation about innovation, resilience, and our capacity to succeed brought to you by Microsoft. I'm Gemma Milne. I'm a technology journalist and author. And I'm going to be exploring trends around how companies are adapting to a disrupted world and preparing for tomorrow. We're going to speak to the innovators who are bringing products, operations, and people together in new ways. 

Gemma: [00:00:30] On today's show, I'm joined by Tory Gundelach, who leads Kantar's insights for Target and the grocery channel. We dive into how retailers were pressure tested in 2020 and how they adapted and still are adapting to the rapidly evolving space while still facing ongoing uncertainty. We talk about the growth of e-commerce and the biggest key trends that have driven change for the past 12 months. And we explore what's next for retailers now we’re in 2021 and what might happen to the retail space in the months and years to come. 

Gemma: [00:01:06] Tory, thank you so much for coming and joining us on Connected and Ready, wonder if you could start by just telling us a little bit about who you are and what you do. 

Tory: [00:01:13] Hello, everyone. I'm Tory Gundelach. I work for Kantar. I'm an SVP of Retail Insights, and I lead a team that particularly focuses on mass and grocery, in addition to all broader trends in retail and consumer trends that are impacting retail. Prior to Kantar, I worked at a couple of different retailers, so this is definitely a topic that's near and dear to my heart and I'm excited to be here to talk more about it today. 

Gemma: [00:01:38] Awesome. We've been talking about trends and what's been going on in the world of retail in a completely different way, but also more, I think, than previous years, particularly the mainstream media. I'd love to hear from yourself, considering you're an expert in this space, what would you say were the biggest trends or changes that took place across retail across the last year? 

Tory: [00:01:57] Well, it's definitely been a crazy year, but there are a few areas that really stick out, although quite honestly, there's probably very few parts of retail that didn't have some sort of impact to them this year. But I think if I look at what would maybe be the top three in my eyes, I think the first one is that you can't ignore the growth of e-commerce or omni commerce in 2020. And we've all heard the stat that the pandemic accelerated online growth three to five years in a matter of months or even weeks. And that has definitely stressed the logistics and the supply chain operations, not to mention profit numbers for retailers, but I'm going to come back to profit in a second. I think one of the more surprising things is that shoppers who engaged in online in 2020 are different than who we would traditionally think of as our online shoppers. We typically think of that kind of millennial family, but we saw a lot of older shoppers really try new capabilities to the point that in the spring in particular, the online-only shopper was really more of a mature or boomer generation. And, well, that might seem surprising. It actually makes sense when you think about who has the most motivation to stay out of the store during a pandemic. But I think when you look at the growth of e-commerce, I think that it came from some nontraditional places, which is probably the more interesting thing. Then circling back to my point about logistics and supply chain, disruption of course this year was more than most of us have ever seen in our careers. And I think the retailers that were able to be nimble and flexible were really the ones that fared the best. And also some of the bigger players who had muscles they could flex that maybe smaller players weren't able to have access to are also retailers that came out as winners. It might have been as a bigger retailer that you were at the top of a supplier’s fulfillment list. Of course, if I'm a supplier, I'm going to fill from my biggest, most important most strategic client down. But also we saw bigger retailers had some additional levers to pull, maybe more creative levers to pull in terms of being able to control private label manufacturing, divert food from restaurants, really be able to take on some tactics that a smaller retail chain probably wouldn't even have the right resources to be able to want to do some of those sorts of things. So I think that when you look at logistics and operations, there's a couple of different substories just related to being scrappy and nimble and flexible. But then also the bigger players really were able to step in there and take some actions that smaller players weren't able to. And then finally, I think the last big trend that I have to mention is just the change in the shopper and retailer relationship and that relationship then in turn impacted operations. Not surprisingly, we've seen shoppers reduce the number of retailers. They shop both in-store in online, and they've consolidated trips. They're making fewer, bigger trips. The baskets have gotten really big. We've even seen categories like seasonal products have turned to be basket builders instead of trip drivers like they traditionally have. And that has caused sales to shift channels. If you look at back to school, for example, of course, a retailer like Amazon really benefited from shopper's saying, you know what, I'm not even engaging in the physical aspect of retail. But we also saw traditional supermarkets really benefit during times like back to school this year where shoppers - well normally you wouldn't be like, hey, I'm just going to get my school supplies at the grocery store – this year they were like, I'm not making a separate trip, I'm just going to get what I was able to here. And as we look at the holiday season for 2020, we've seen shoppers place a retailer's ability to create a safe, hygienic environment placed way above anything related to price, budget, stressful experiences, so just in general, the way that shoppers are evaluating that relationship with the retailer has changed a lot in this year. 

Gemma: [00:06:16] Before we dive into some of these trends, you've already mentioned beyond the obvious challenge of simply being able to stay in business. Could you give us a little bit of detail on what are the sort of bigger challenges or the nuanced challenges the retailers that have been facing this year? What kind of hurdles? 

Tory: [00:06:34] Yeah, one of the challenges, quite honestly, is just bend the pace of change and sales trends and what are hot categories have literally been changing from week to week, and retailers have had to adapt to that, particular if you think back to the spring, we, of course, have normalized a little bit, but we had a time period, quite honestly, decently long time period in 2020, where from week to week, literally, the things that were selling that were in stock that were needed by shoppers were pretty different. And so any sort of planning process that retailers had really went out the window and they had to lean on their reactionary tactics a lot more. And that's tested the relationship between suppliers and retailers, and suppliers who over communicated this year, were able to be transparent, are really going to feel the benefit of that partnership in the upcoming year. If for no other reason than a retailer feels like they've removed some of the uncertainty that they're facing. Then related to this also is profit. That's been a huge topic this year. Of course, topline sales are through the roof for almost all sectors of retail, not 100 percent. But the majority of the retail sector is seeing record years. But profit can be really difficult. In addition to all the COVID related expenses, outfitting stores with plexiglass and floor markers, associate bonus pay, extra cleanings - all of that stuff that is more pandemic related. We've also seen significantly more sales come through e-commerce, which I already mentioned, and those are less profitable sales, whether it be because product is being having to be packed and shipped or realistically more relevant to this year's conversation, the increased labor to pick, pack, stage for then a shopper to do either pick up or last mile delivery. 

Gemma: [00:08:24] So you mentioned about week-to-week changes and retailers having to adopt reactionary tactics in order to keep up. I wonder if you could just tell us a little bit about what those tactics were. 

Tory: [00:08:35] Yeah, those tactics are going to look different depending on what category we're talking about, what retailer we're talking about, of course. And a lot of that would be split with import versus domestic businesses. So if I start with imports for a second, because that's probably been less of a hot topic this year, in a lot of those cases, it was understanding what's happening globally, what's coming through the port, looking back in March, how do I change my holiday plans for nine months in the future, knowing that we might need to buy inventory in June if I want to have it on the shelf in December, because there is delays happening at the port and those sorts of things. So just kind of looking further out in an import business and understanding there's going to be delays. I probably need to be really conservative in terms of how early I'm bringing in inventory. From more of a domestic fulfillment perspective, you know, I think that there were some key categories like your toilet papers your cleaning products where I mean, it literally was how do we help the manufacturers just pump out more product? Because in a lot of cases that was the issue. How do we help them make fewer line changes? How do we help them not have different SKUs going to different retailers so we can simplify the process? So in that case, it was almost how does a retailer support a manufacturer? And then I think in probably the broader set of commodity categories, you know, most of your food and household essentials, it came down to a lot of communication and understanding that in a system where we most likely had inventory built up, we didn't anymore. And so we had to be more strategic about where things were being sent at what time so that we didn't have any excess unused inventory sitting in a spot that it didn't need to be. 

Ad: [00:10:31] Dynamics 365 Commerce delivers a complete omni-channel retail solution that unifies back-office, in-store, and digital experiences. This end-to-end solution empowers retailers to personalize customer engagement, increase employee productivity, and optimize operations across physical and digital channels. Request a live demo today by following the link in the episode description.

Gemma: [00:10:58] So I want to talk a little bit about some of these changes and I guess how long these changes are going to stay. In our previous episodes, we were talking about customers and people in general building new habits and the fact that the pandemic has gone on for such a long time, the new habits of whether it's shopping online or, you know, you mentioned there about changing the makeup of baskets, number of retailers you tend to go to. These are now not just switch strategies to get through the pandemic. People have now built into the habit of doing things that, you know, particularly online shopping, that will keep going regardless of whether we have a pandemic. I'd love to hear your take on which of these trends you think are going to keep going and which ones are just getting by right now, if that makes sense. 

Tory: [00:11:32] Well, I think that's the million-dollar question. And if anyone knew the answer to that, they would probably be playing the lottery instead of actually working. But I think that, you know, it differs a little bit from trend to trend. But in general, my feeling is that, all of the trends that we saw happen during the pandemic will exist to some extent, but they will probably all take a step back. That might be a little bit of a cop out answer, but when you think about if we just look at e-commerce for a second, we saw a lot of shoppers, particularly older shoppers, try new sorts of fulfillment during the pandemic because they had a really compelling reason to. We all know that changing behavior is not something that humans like to do, and you have to give them a good reason to do it. And the pandemic is as good a reason as any to want to learn how to use, pick up, use how to learn InstaCart, whatever it might be. And so they've gotten over that hurdle now. Now, I don't expect that we're going to see the majority of shoppers in the US move to be mainly online shoppers. I mean, there's very few people that are online only shoppers, only about two percent of shoppers are online only even in the peak of the pandemic in April. We got a little closer to 10, but it's back down to low single digits at this point. So I don't think we're going to move to this space where stores are irrelevant and people are hardly using them. But I think what we're going to see is that shoppers are going to use these new fulfillment methods as tools in their toolbox and those of us in an industry like to think about channels as finite things, like this is online, this is in store, or this is pick up, this is last mile delivery. But as a shopper, you're just literally thinking about what's the most convenient way for me to get the products that I need today. And I think that this has just gotten people more comfortable with a broader set of ways to get that product in the way that they might need that day. So I think that you're going to see, you know, kind of a broader set of behavior related to e-commerce, but I don't think that it's necessarily going to be oh my gosh, people figured out that they don't have to leave their houses and now they're not going to do that anymore. I think that if anything, we've seen the physical stores still play a really critical role and there's no reason to think that after the pandemic that would go away. So that's just one example, but I think that whether you're looking at e-commerce or SKU rationalization is another one where, you know, we saw SKUs cut way down. I think that we're going to have to reintroduce some of those SKUs. Small size, this is a great example that have really gotten taken off the shelves this year because people are making fewer trips, more stock up trips, nobody wants a size that's only going to get them one week. But longer term, you know, you have to believe that some of that behavior is going to come back once people start eating out at restaurants and maybe don't cook at home every single night of the week, they're going to need smaller portions. So some of those SKUs are going to be, have to be, reintroduced. Now, are there categories where we had twenty flavors and we've cut to four, we probably don't need to go back to twenty - absolutely. So that's kind of what I mean, where, you know, I think we're going to give some of it back, but I think that to your point, this has gone on long enough that a lot of the behavior will have some stickiness to it. 

Gemma: [00:15:01] And just quickly, I haven't heard that term before. SKU rationalization. Can you just quickly define that for anyone who hasn't heard it before? 

Tory: [00:15:07] Yeah, absolutely. It's basically going through a rationalization process to say, do I need all of these individual items in the category or in the aisle or whatever it might be. And I think that scents and flavors is probably the most classic example of that. Size is as well. Where, do I need a 12 ounce and eight ounce and a 20 ounce? Or if I just have the eight ounce, will that satisfy people or do I need lavender and vanilla and lemon and fresh scents? And, you know, I think that we, for a lot of reasons, condensed the number of choices that we were giving shoppers in 2020. And I think we're going to find in some cases, we were giving them too much choice before and they just substituted into what we gave them. But I think there will also be some cases where we find, yeah, now that we're out of the lockdown, quarantine, some of those SKUs some of the items that we pulled off the shelf actually were serving a purpose and we're going to have to put them back. But that would be the balance and kind of a step process to get back to them. 

Gemma: [00:16:20] So you mentioned the consumers are obviously trying new ways of getting products, whether it's, you know, shopping online, doing curbside pickup, but also this idea that realistically is not that everything is going to shift to everybody just using these new tools, but rather they really are tools in a toolbox that they have the choice, right. And of course, the convenience is the driving force here. Do you think convenience is still going to be, I guess, a thing that consumers really focus on moving forward? Or is it just because of the pandemic? When we think about things like work life balance, being able to have more time, convenience has always been something important. But is it even more important now that we simply have more tools? 

Tory: [00:16:54] I think that convenience is always going to be important. I think that what convenience means has shifted a little bit. Where maybe pre-pandemic convenience was a bit more about speed and how fast can I get something, and maybe now convenience is a bit more about kind of ease and having availability and getting the right thing. And so you would have to imagine that post-pandemic, the definition of convenience will change a little bit more. And part of that does have to do with other things that are going on with shoppers lives. If we have more people that are long-term working from home, that impacts the way that they think about convenience. You know, on the flip side, we'll have more people who are working from home are back in the office. And so maybe home delivery has been convenient for them during this time because their home at all hours so it doesn't matter when a delivery shows up, but maybe now when I'm back to work, curbside is a more convenient option because I can swing by on my way home. So I don't know that convenience has become more important during the pandemic. I think what convenience means to shoppers has changed a bit during the pandemic. And so I would expect that out of the pandemic it will maintain that heightened sense of priority, but what that actually means, how it comes to life will look different for shoppers. 

Gemma: [00:18:17] So let's talk a little bit about some of the changes that retailers have had to make over the last year. Obviously, one of the big ones that's been talked about a lot is product fulfillment and being able to get products, whether it’s the different types of products or just physically getting a product from A to B, from retailer to consumer. And I wonder if you could give us a maybe an example or two of how retailers have been able to adjust what they do or how they behave, whether that's in terms of how they just get the inventory to the consumer or perhaps manage the expectations around not being able to get inventory to consumers. 

Tory: [00:18:54] Yeah, well, of course, the more fulfillment types that are available or even just having a bigger contingent of shoppers that engage in that broad set of fulfillment types adds more complication to the process for retailers. So simplicity has been a focus this year, not just in terms of the growth of fulfillment types, but also, as you mentioned, because of the in stock situation that we were in. And this is where we saw retailers turn to things like reducing the items that they carry to bring that simplification to life. Target has used the example that with one of their big suppliers, they went from carrying about seven hundred of their SKUs to about 70 of their SKUs, and this really simplifies things from end to end. On the manufacturer side, it means fewer production line changes. It means less warehouse slotting. It means once you get to the retailer, less items that a store team member on the floor actually has to put on the shelf. So it just made a system that was really stressed to a breaking point help reduce some of that stress. So that's just one example, but overall, any place that things were able to be simplified, we saw retailers leaning into that. And then in addition to that, knowing you're not going to get everything right or even close to right. We've seen a focus on transparency, and really letting shoppers know what's going to happen. So as an example, we've seen retailers like HEB feature the quote unquote, best available toilet paper, which is really letting shoppers know upfront you're going to get whatever the personal shopper can get you off the shelf. And if you're not happy with that, don't order it. Go into the store yourself and sort out your situation there. But, you know, not wanting to wait until that last minute when you're expecting the product to show up at your house or even to that moment when you get to the store and you're expecting product to be on shelves. We really saw retailers try to not only give visibility to what was in stock but have some specific messaging around - this product isn't going to be here so that shoppers really knew what to expect. 

Gemma: [00:21:04] Let's go one level higher. I guess our further upstream in the retailers’ ecosystem and talk a little bit about forecasting. You touched on it a little bit already. The keeping up with the pace of change and simply just being able to know what's coming next. But what have retailers been doing to be able to forecast when their historical data that they've relied on previously may no longer be an accurate prediction of what they can expect? 

Tory: [00:21:28] Well, that's exactly it. Most retailers’ forecasts have relied on past history. You basically take the past history and then figure out how much kind of up or down it's going to be from there. And even new items are often forecasted by using look like item’s history. But in the past year, there's been no trend to go off of or said a different way, the trend line has been broken, and particularly in the spring that was the case. I think we're getting into a little bit better of a situation now, but there were times this year where the only thing we knew was whatever happened last month or even last week was not going to happen next month or next week, and so retailers had to get creative about what they did. And I don't think there was necessarily a consistent way that retailers have handled reacting to this, partly because there isn't a consistent way that retailers forecast, particularly if you look at retailers who carry discretionary categories like apparel versus retailers who sell food and commodities, they use most likely fairly different forecasting methodologies. But nonetheless, across the board, everyone had to get more creative, whether it be looking at how much share you're picking up, looking at what competitors are closed and what was their volume that you might expect to transfer in, looking at what dollars were being spent in restaurants, movie theaters, baseball games, fill in the blank of whatever service or entertainment is relevant to your retail space, and look at how those dollars may shift into your actual physical product. So I think it was all about what can we get our hands on that allows us to do more of a scenario planning situation. And more recently, retail, particularly in forecasting a lot of the skill set has come down to being able to use data and analytics to get really efficient in things like forecasting and inventory flow. And this year, they kind of went out the window a little bit and the retailers that were able to say, OK, we're going to do a sweep of the landscape, see what's available to us, knowing that none of them are perfect. They're all probably pointing in slightly different directions, come to a conclusion and use a bit of a gut feel to make a decision and move forward and, of course, have backup plans in place. Those were really the retailers that were able to be successful, which is a bit different than how we've been talking about success in inventory management or forecasting the last couple of years. 

Gemma: [00:23:56] Yeah, I think a key word that keeps coming up in this conversation is creativity and thinking differently about how to try and make it through and do new things whilst trying to do the stuff you already know how to do. And I think building on that a little bit, I would love to hear of all these challenges and adaptations and transformations that have taken place. What is most surprised you or perhaps an intriguing or interesting thing that's happened where somebody’s taken on a really creative approach to trying to solve a surprising problem? 

Tory: [00:24:26] Yeah, I think that what has been surprising to me has shifted as we've gone throughout the pandemic. It's as you alluded to earlier, it's gone on for so long. I think some of the things that were surprising back in March and April now seem like the way of the world and curbside would be a great example of that. Well in the kind of grocery space, curbside pickup was pretty prevalent. Maybe your smaller players didn’t have it, but the what's called, the majority of grocers, we're engaging in in some way, shape or form. But very few discretionary retailers, think your Best Buys, your Kohl's, your Joanne Fabrics had those sort of operations set up because quite frankly, they didn't really need it before the pandemic and the ability of those retailers to basically patch together a solution in a matter of weeks to offer a totally new fulfillment type for them, I think was pretty surprising. I think that a lot of people thought it would have taken longer for that. Now, again. Fast forward nine months. We’re like, yeah, course everyone has rolled out curbside, so it doesn't seem so surprising at the time. But so maybe the answer is just the pace at which retailers have actually been able to show up to their shoppers in a different way, whether it be offering new fulfillment types or even just constantly from week to week, changing what they've featured on their landing pages. You know, knowing this week is maybe about pantry loading. This next week is about comfy clothes to work at home in, the following week is oh wait now I need actually a desk and a chair to work at home in, and that has continued as we've gone throughout the pandemic. And I think what's added to that is from a shopper perspective, one of the things that's been most surprising is that even though we're in a recessionary environment, we haven't seen a whole lot of recessionary behavior taking place. We still see really high-ticket items being purchased. We still see less kind of trading down into lower price point brands. Across the board, there is a lot of behavior that doesn't align with what we've seen in past recessions. And so whenever shopper behavior doesn't align with what we would expect, that just creates more situations that the retailer has to react to that they weren't expecting. A lot of the conversation in the spring was, OK, we have such high unemployment, people are worried about where their next check is coming from, and then you see high ticket items like trampolines and swimming pools not able to stay on the shelf. So it causes unexpected results for retailers or unexpected situations for retailers that they didn't know were coming. 

Gemma: [00:27:00] Well that actually leads quite nicely into my next question, going back to one of your trends, which was about the sort of shopper/retailer relationship and also you saying there about not seeing as much of this recessionary sort of behavior. And when we think about this, you know, shoppers are really wanting to sort of just see cleanliness and hygiene and safety. And that's what they're wanting from this sort of particularly the in-store shopping experience. What are you seeing in terms of expectations of customer experience beyond that? Because if people are still buying big ticket items, but at the same time, they just want to feel safe, what does it mean when we start talking about, you know, retailers having to keep up with everything but at the same time still provide some kind of experience that isn't just this, we're all panicking kind of thing, at least not now anyway. 

Tory: [00:27:51] The word experience can mean a lot of different things. So in today's world, that a lot of times is coming through in more of a digital experience and in let's call it back half of 2021, I hope for all of our sakes experiences able to come through in more of a physical sense and we can get back to some of the types of things that were happening in physical retail that shoppers really liked. But I think that there is a hierarchy of needs for shoppers. And, you know, traditionally that hierarchy of needs has been price point or being able to stick within my budget was the most important. And then you kind of moved into this, a retailer creates a shopping environment that's not stressful. In the last couple of years, we've seen those really become equal or even kind of flip flop a little bit. So before the pandemic, it was OK, can you get me what I want to buy at a price that is reasonable and can it not give me grey hairs while I'm doing it? And we've just seen that the safety, health, hygiene has shifted in that priority list to be number one. I think eventually that will go away. How fast it goes away is a question that still meant to be seen and I think we'll learn a lot more in the next couple of months, but I think that also holds true when we think about things like ecommerce fulfillment. There is a baseline that you have to have. Nowadays, there's very few retailers that can get away with having no e-commerce or omni commerce however you want to think about it experience, you have to have some sort of ability to allow people to browse online, order online. But you don't have to be the best. And I think that's longer term. You know, obviously the next couple of months things are going to still be a little bit abnormal. But coming out of that and thinking about how you take those expectations that have changed in stride, it's about making strategic choices. You can't do it all. You have to meet that baseline expectation for whether it be price, stress, hygiene, but then beyond that, you have to pick what you're going to be good at and double down with it. So if I'm Costco, I need e-commerce experience probably more than what I have now, but I don't have to be the e-commerce leader, or Target just announced they're going to drop their subscription services. Great, if a shopper doesn't demand that you have a fulfillment method and you can do something better, focus on that. So I think that we're going to see making hard decisions is going to become a differentiator for a retailer because it's exactly what you're talking about. There's so many expectations and different sorts of changes in the retail environment. It's meet that baseline across the board and then pick one area to do really well, and that's how you'll stand out to a shopper. 

Gemma: [00:30:45] Let's talk a little bit about technology before we wrap up, because I want to hear from yourself, considering you're looking at trends and how things have changed not only just this year, but over time, in what ways is technology your sort of different tools, enabling retailers to keep up and make rapid shifts and thinking about it more broadly across the ecosystem, how's technology supporting and accelerating what they can do when we think about sort of scaling across and being able to build into 2021 and beyond? 

Tory: [00:31:13] Yeah, absolutely. Retailers are definitely in need of more technology to keep up with the rapid changes that are happening. And I would say most retailers knew that pre pandemic, but this has really shined a light on that. And probably the biggest spot for technology across the board, I think, is automation in fulfillment. And this is why we see retailers like Albertsons adding take off technologies systems into their store back rooms, because human labor just can't keep up with the pace at which e-commerce sales are growing, particularly in the commodity side of things where we're still in our kind of adolescence versus having a more mature e-commerce business. And I know we like to talk about a lot of the jazzy things in technology like drones and driverless delivery, and those, of course, could help. They’re a little bit further out, but they could help. But just imagine if we reduced the number of hands that touched every gallon of milk that's now sold online. Sometimes the biggest impact can come from the things that are a little bit less cool. And so I think that what we're going to see is just automation in day to day fulfillment that is happening with a person today, they're walking down the aisle and picking something up and then either staging it for pickup or delivery. And the problem so far has been that for automation is still pretty expensive. It takes physical changes to either a store or a warehouse, depending on how you're doing it. And the good news about the pandemic is that with more volume coming through omni commerce, the math on spending that capex to invest in some of that automation is starting to get easier. I'm sure that actually a lot of retailers that had wished they had done that about two years ago and now they're trying to play catch up. But, you know, those folks that sit in roles who are accountable for getting a retailer to invest in that sort of technology and automation, their argument just became a lot stronger this year. And so I think that's going to be one of the things in 2021 we see a lot of is, I mean, 2020 was literally just like, let's keep the lights on and now it's OK we've got X amount of additional business coming through digital, online, e-commerce channel, how do we go back and actually put the infrastructure in place to do that, and that's going to have to be through technology and automation. 

Gemma: [00:33:39] So, yeah, building on that sort of final question, looking forward, what is it that you think retailers should be focusing on to keep driving, engaging customer experience and growth? And, you know, you're saying I'm sure a lot of retailers were wishing they'd made that investment in technology, for instance, a couple of years ago, thinking broadly, whether it's tech or not, what would you say they need to be thinking about now, whether it's another pandemic or just the pace of change happening in customer expectations moving forward? What should they be looking to do now? 

Tory: [00:34:07] Yeah, I think there's a couple of things. I think that in the first couple of months of 2021, it's honestly just going to be about meeting shoppers where they are, just based on what happens with the vaccine rollout and what continues to happen with the actual virus. So in the first couple of months, that's probably the biggest priority, is just making sure shoppers continue to feel comfortable with engaging with you and feel like you're talking to them in a way that is relevant to what's happening in the world. But I think when you look beyond that, there's a couple of different things. One is going to be holding on to all the new shoppers that retailers gain during the pandemic, either new shoppers to the total ecosystem or new shoppers to individual, quote unquote, aisles or parts of the store, because particularly for bigger retailers, a lot of their new shoppers have been well, I shopped this retailer before, but I didn't shop grocery at this retailer or I shopped food at this retailer, but I didn't used to buy cleaning supplies at this retailer. So when I say new shoppers or new customers, it really can be totally new to the retailer or just engaging in a broader part of the store. And retailers are, of course, going to want to hold on to those shoppers. And so I think that we're going to see an even bigger focus on targeted communication and personalization. And of course, a lot of that happens through digital channels today. That's the easiest, most efficient way to do targeted communication and personalized offers. And when you add on the fact that many retailers now have pretty big businesses in media themselves, it's even more reason to expect that there's going to be a lot of time, talent, and attention put on, you know, how do we do personalized communication that is going to keep all of those shoppers that we gained during the pandemic for reasons and in a lot of cases that were outside of their control. And then the other thing I'm watching for is some mergers and acquisitions. So we know that there were some winners and losers, which always creates an environment for mergers, acquisitions. We also know that the pandemic shined a spotlight on capabilities that retailers weren't great at or places they were struggling with. And then thirdly, we know that retailers stockpiled a lot of cash because there was so much uncertainty in 2020, they wanted to make sure they were prepared for anything. So those three things create this environment in 2021 and even probably into 2022, given that they'll still be some uncertainty in the first half of 2021 where I think we're ripe to see a retailer, you know, maybe buy even a technology company that helps shore up something that they're not very good at or see two competitors decide that they're better to merge, to actually stay afloat in the world as we know it, because, you know, in general, once we get to the back half of 2021 and 2022, we are going to see the total retail dollars start to decrease bit. That water level will go down a bit as we see dollars flow back into restaurants and flow back into other service areas. And so the next, let's call it 12 months, is about maybe six to 12 months is about setting yourself up as a retailer to keep as many of those dollars as you can when the floodgates open or the water starts to seep out. But, you know, thinking about what are the right moves you have to make to be able to do that, whether it be using your internal capabilities you have today or saying, hey, we discovered there was something we just didn't have and we're going to need to go out and buy it. 

Gemma: [00:37:42] Tory, thank you. So many insights. So many things to think about and so many great examples that I think everyone can learn from and take forward into this new year that we're all in, whether it's, you know, thinking about big strategy or even just doing small things that can keep retailers relevant and meeting customer expectations. Thank you so much for joining us on the show. 

Tory: [00:38:01] Thank you. 

Gemma: [00:38:04] That's it for this week. Thank you so much for tuning in. You can find out more about Tory's work and indeed some of the broader themes we discussed today in the show notes. If you enjoyed the episode, please do take a few moments to rate and review the podcast. It really helps other people discover the show. And don't forget to subscribe and tune in next time to continue our conversation about innovation, resilience and our capacity to succeed.

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