[00:00:00] Welcome to Unpacking the Digital Shelf, where we explore brand manufacturing in the digital age. Hello everyone, Lauren Lebeck-Gilbert here from the Digital Shelf Institute. Last week NRF took place, the National Retail Federation Conference, which is the world's largest retail conference with 40,000
[00:00:28] people descending on the Javits Center in New York City. There is innovative tech from all over the world on display, as well as discussions on what will shape retail in the coming years. Andrea and I were at the conference and share our key takeaways, including spatial AI, the blending of in-store and online, and the future of the retail media outlook. Hello, Andrea. Welcome back to the
[00:00:52] podcast. Well, hi Lauren. Thanks for having me. Long time no see. We just spent a few days at NRF in New York and I clearly got a cold, so pardon my raspy voice, but it was an absolute blast, slightly overwhelming. First time for both of us, and we had an awesome opportunity to see so many new pieces of innovative tech, so much great content. We met so many people, we saw so many people we knew,
[00:01:19] and got to really kind of immerse ourselves in the emerging trends of 2025. What did you think of the conference, Andrea? Well, I think first it was really fun doing it with you, Lauren, as my conference buddy for NRF 2025. First timers both of us, so it was a little bit of the blind leading the blind, but I would say A little bit. My first, I mean, just from like a reaction to the overall conference, it was massive.
[00:01:44] 40,000 people. Yeah, massive. So, and maybe it was the way the place was laid out, but you could, there were many places where you felt like you could see all of them at once, like just ants just racing around to their next meeting. So, but really diverse group of retailers and brands and service providers and yeah, I think I would go back. It was a good one. 100%. And if anyone is planning to go back,
[00:02:12] wear comfortable shoes and look at the map because the Javits Center is six city blocks. So it takes quite a long time to walk from one end to the next. And I definitely underestimated that. Yes. Well, lots of learnings that I am exciting, excited to talk about today here with you. Yeah. So, Andrea, what was one of the themes that you saw from the conference? What's your
[00:02:35] number one? Okay. My number one was just the pace and rate of change of the shopper right now. So the shopper is changing so dramatically and so quickly. I think we may even be on the cusp of one of the biggest sort of changes that I have seen in my 25 years in digital. It started a few years ago
[00:03:01] with social where a lot of shoppers started, you know, using social as a means of product discovery and product research and search and sort of took over that function that marketplaces used to serve. And now Gen AI has become a huge disruptor in the shopper experience. And I think that was really evidenced by the word that kept coming up in almost every session that I sat in on, which was agility.
[00:03:25] Like all of the retailers are talking about agility, Foot Locker, H&M, you know, Rent the Runway even. And it also came up a lot. I was able to attend the day before the session where Stratacash hosted a big day on retail media. And we had a lot of speakers there talking about retail media. And it came up there a lot too. So I just think the space is, we're at an inflection point of
[00:03:51] change. And it's really exciting to be a part of it. Yeah, we finally have the technology to be able to scale that change, I feel like, because it's been on the cusp for a while. But now with AI and with all of the like advanced computing technology that we have, we can actually do some of the things that we've imagined. That's what it felt like there. Yes, I would. I totally, totally agree with
[00:04:14] that. But yeah, I mean, a lot of shoppers now starting their search on perplexity or chat GBT or engaging with Amazon's virtual shopping assistant Rufus. And even just on the marketplaces, Amazon and Walmart in particular, changing how search works, right? So it's more contextual and, you know, and less transactional. And I do believe, and we got to hear from Pinterest too,
[00:04:41] kind of hearing about that shopper journey and discovery with some really interesting stats there. And I do feel like the shopper is just changing so quickly. It's just very exciting. Yeah, totally agree. Okay, what about you? What is the takeaway you had? I think as a tag on to exactly what you just said, I was trying to think of a word to describe the kind of theme that I saw. And I came up with the word blended. I feel like you're seeing a lot of
[00:05:09] blending between the physical and the digital experience. And I used to say more of that digital is coming into physical, but it truly is a blend because physical in-store shopping has benefits. Digital shopping has benefits. And we're seeing all of those kind of try to come together. And for anyone who ever said the store is dead, it is not dead. It is back with a vengeance. I heard a lot of people talk about the store is your stage. How can you use it as a theater?
[00:05:37] And a lot of the tech that we saw on the expo floor was really all about that. So there were digital shelf talkers, which were video screens, and they brought up retail media ads. There were way more screens in-store bringing in digital elements, talking about ingredients, talking about claims, bringing in a celebrity or an influencer. So you saw a lot more of those digital experiences come
[00:06:05] in-store. But also, you saw a lot of physical experiences being replicated digitally. So how can you virtually try on makeup? How can you understand the texture or the color of something and creating those experiences digitally if you don't have the opportunity to get into the store? Yeah, like you got your scan. You got your scan done. Yes. Oh my gosh. I got a full body scan. I put it on LinkedIn. I spared everyone my measurements.
[00:06:32] But it was really cool. I now know the measurements of my entire body. And it told me if my knees or my neck or my hips were misaligned and actually recommended exercises to be able to fix that. And listen, I feel like there's so many ways you can use that data. I hate trying on clothes. I can use those measurements to see how a garment will drape on my body. I could use that with my physical therapist. I can use that from a medical standpoint so that they can look at the structure
[00:07:00] of my body. And if I were on a specific weight loss plan, they could actually look at my muscle and my fat density and how I've changed over time. There's so many ways that you could use things like that. And it was just really interesting to see all of the data that you have that you can use in your in-store and your online shopping experience. Yes. I love that.
[00:07:25] Yeah. So a couple other really cool technologies, virtual try-ons. Samsung had something called the lift and learn, where you can lift your product up in front of a screen and it would tell you about the product, the size, the color, the fit. So really interacting with products both digitally and physically, I thought was a really cool trend to see. I love what you said about the stores being so important. When we sat through that,
[00:07:51] Lauren and I were lucky enough to be on a press tour while we were there. So we got to go to a press lunch and hear Pinterest talk about some of the things that they're working on. They talked about how Gen Alpha loves to be in stores and how one of the key holiday trends was back to return to like a return of in-store traffic. And that Gen Z in particular prefer to be in stores much more than
[00:08:18] millennials do. And then I loved the other thing that they said about, we've lost the woman from Pinterest, Rachel Hardy. She said, we've lost the joy of shopping online and some of that exploration. And that's an experience we're working to build on Pinterest. So I feel like for a while, we were trying to figure out, like now we're in a place where in-stores become so important that online is trying to figure out ways to replicate that experience. For a while, we were trying to bring
[00:08:45] technology into the stores and we're still doing that and all the things that you just talked about, but also some of these online-only platforms are really trying to figure out how do you bring back that joy of discovery. And to tie both of the themes that you shared and I shared into like another theme I really saw is that in-store now has to become agile and better understand the consumer more than they have previously. So we heard from the CEO of Sephora and she was saying, for anyone who's ever gone to
[00:09:13] Sephora, they have like a minis bin right when you go to checkout. It's kind of like, they call it the snake. You like walk through these bins and there's all these cute little miniature things and you inevitably grab two or three before you actually purchase something. But the experience in Sephora now is they're empowering their sales consultants to actually check out with their consumers when they're speaking to them in the aisle. So people aren't going through air quote the snake
[00:09:40] and looking at the minis. So they're building a more modular store where they can move those bins to the front where you exit and you can potentially grab a mini checkout with a store assistant. So that agility and the blending of in-store and digital come together where knowing the consumer so well and their patterns and their habits is going to help any brand, any retailer be successful. And I love that example, Lauren, because I feel like the old way of doing things might be to say,
[00:10:10] okay, well, because we know that the shopper won't go, if we allow them to check out with an associate on their phone, the shopper won't go through the snake of minis and add 30, 60 dollars to every order, we're just not going to roll out that tech. Right? Like it's not going to do that. We're going to make them keep going through the line because we know that's better for our business. But I love this idea that they're saying, but what's best for the shopper and how can we pivot and like reorient what we're doing to suit that shopper and meet all of our objectives.
[00:10:39] So I really, really love that. That's the, it's the realization that the shopping is changing because the consumer is changing and we need to all get on board. So a hundred percent. I see that. Meeting the shopper. Yeah. Meeting the shopper. We're there. I love that. So what's another theme that you saw, Andrea? Okay. Another one that I saw was just this like level of nervousness and anxiousness across brands, retailers, and service providers. Are we doing it right? And, and it came through
[00:11:09] in particular in a couple, couple of areas. The first was, are we doing AI right? Are we implementing it the right way? Both brands and retailers are, there's a lot of, there's, um, there were a lot of feelings of like, I'm very unsure of our approach. And, uh, and you know, I sat down with a few brands while we were there and they all asked that same question to me, like, well, how are other brands implementing AI internally so that they can see some efficiencies? Like what are some pilots that
[00:11:38] you know about that other brands are doing? And the retailers that we heard from, I think are struggling with some of the same things. Um, and you know, whether the fundamental building blocks of what we do are going to change as AI, you know, kind of going back to the shopper changing really dramatically now that they're engaging with our product and searching and researching in all of these new places are the building blocks of success that we've been focused on. Do those need to change?
[00:12:06] And spoiler alert, I think that they do. Um, but I loved the presentation surprisingly from 1-800 flowers at the retail, rethink retail event. It's not a company that you would think of as being particularly innovative, but they talked about how doing something is better than doing nothing. And so just like do something. So if you're wondering, you know, don't get too hung up on scaling out like a big AI solution, just choose something. And then another talk at that event that
[00:12:36] I loved from PricewaterhouseCoopers was that what he sees is that a lot of times the retailer's roadmap kind of mirrors what the solution is that the tech provider offers. And so it's a little bit reactive to kind of what's available to us. And so really thinking about thinking for yourself about what makes sense in my organization, where are my biggest pain points, and then trying to find a solution that helps resolve those problems. But I think this nervousness, anxiousness, and then
[00:13:02] also nervousness and anxiousness about a potential TikTok ban and how that might disrupt a lot of the traffic that we experience to some of our products and some of our retailers. And so I noticed that as well. No one has it figured out. Everybody's trying to figure it out. And I think we hear that across the board, retailer or brand, but the key principles need to be the same. Like, do you know your consumer? Do you know where your data is? Are you trying things? Are you testing and learning?
[00:13:32] Like for all the talks we heard about, it was all about that. We're testing, we're trying, we're being agile, we're figuring out what works and then pivoting from there. Those are really the kind of like key tenants, but nobody has the secret sauce. And I don't quite frankly think anyone ever will. It's always going to be kind of a mix of see what works and go from there. Yeah. And I think that nervousness, you know, it was interesting. We got to, I heard from Javianas,
[00:13:56] you know, the flip-flop company and from H&M. And they talked about like, we have to just keep our, the woman from H&M, Linda Lee said, we have to keep our eye on what's happening, remain agile, and stay focused on what's developing in the future. So I love that, that idea of, you know, really thinking about just focusing on the customer and, and the rest will kind of fall into place. But the amount of times that I heard who's doing it well, that question was,
[00:14:24] was pretty surprising. Okay. What else? What other, what other themes did you, did you observe? I think it was all about experience and not just experience for the consumer, but experience for the sales associate. So from an experience standpoint on the consumer side, how can you make it seamless, personalized? There was so much tech on the floor around whether it was virtual shopping carts with
[00:14:50] like being able to check out just from your cart or whether it was scanning your credit card to get into a store so they know who you are. There were so many ways that it was easier for the consumer to get the experience that they were looking for based on the data and information that the retailer had. But on the flip side of that, I think the experience for the store associate is also really improving.
[00:15:13] And I heard someone say in one of the panels that AI doesn't take the jobs away from the store associate, but it enables them to do more strategic work. And you're seeing a lot of that in the technology that exists. So actually Teresa Sperity from Arctic Fox, we were having a chit chat after NRF and she shared a tech that I didn't see, but was really interesting that the tags on the price
[00:15:39] tags on the shelf actually lit up a specific color based on the shopper that was coming to the store to do pick and pack. That is a personalized experience. You know where to go, where to get the item. H&M also had a map of the store and it could tell the associates where exactly the item was that they wanted to pick up. So it was about the consumer, but also about the store associates who are creating
[00:16:03] the experience for the consumer. The technology is enabling them to do that quicker, more seamlessly, at more of a personalized level and integrating AI to be a part of that as well. Well, in some ways those are another consumer. You know, it's kind of like how we talk about how Instacart is like a four-sided marketplace because like they have another customer, which is the pickers. And because more and more orders are getting picked out of stores, you know, that
[00:16:31] experience for those pickers has to be good too, or the end customer experience isn't going to be good. What I love about Sephora was they talked about that. They talked about how it frees their associates up to do more strategic work. And they also talked a lot about how they invest in those associates and the education of those associates. And they feel like that's really critical to their success. I think the comment I would make is for retailers who aren't making that kind of investment, if you now free the store associate up, like for example, at Target, is that store associate doing
[00:17:00] more strategic work with the shopper? I don't know. Maybe yes, maybe no. But I think that there has to be an educational piece in there too, to help them figure out how to do, what to do with that slack, that available time that they now have. And how that's impacting the consumer and their overall experience. Exactly. And I think one layer even deeper to that, I heard a lot about supply chain, a lot about spatial AI and
[00:17:27] mapping distribution centers and using those maps to be able to understand how you can be more efficient. And the people that are actually in the distribution center are also a really key element of this as well. They need to understand where do I need to be efficient? Where do I need to scale? Where are their opportunities? And spatial AI is a really big piece of that, whether it's in the distribution center or even in the store as an associate. So there's a company called Ogmodo where
[00:17:54] you can actually wear a badge that has a camera that can give you real time in stock, out of stock alerts per store at a zip code level. That's insight that you never would have had before for the brand and the retailer side. So that spatial AI component is also enabling more valuable and accurate experiences. I'm glad you brought, I was hoping you'd bring up that company because we spent some time in their booth and they were really interesting. And one of the things I thought was so cool about that
[00:18:22] is that it allows you to be using AI in like a passive way all the time, right? So the badge is just looking at all the shelves and taking pictures and scanning and collecting information while the store associate is actually doing something else. Maybe they're stocking the shelves or maybe they're helping a customer. Their regular job. Yeah, they're just doing their job. And so I love the idea of using AI to kind of, I guess like,
[00:18:48] well, I mean, it's an efficiency improvement for sure, but it's passive, right? It's happening in the background. A hundred percent. Yeah, I totally agree. Andrew, any other themes on your side? I had one more. Yeah, I had one more. I think we can't get off the podcast until we talk about retail media because it was everywhere. It was ubiquitous. It is the new form of media.
[00:19:11] I think some interesting things that I picked up. So less than 1% of the ad spend is happening in stores. So we got that from the Strata Cash Retail Media Day. However, that's where for a lot of retailers besides Amazon and maybe Walmart, that's where all the foot traffic is. And so I think that we're starting to see retailers make a lot of investments to get it right and to figure out how to measure it. And that includes everything from sensors in store and a lot of tech
[00:19:40] and like a whole cottage industry around this. Sensors in store to monitor traffic, you know, and monitor like views of ads and where people are standing and how they're moving about the store. Tech to enable ads in store. So, you know, I think there's the sort of famous Cooler X example, but lots of other areas where retail media is going to be coming into the store. Lots of different models for retailers in terms of
[00:20:07] how they can do it. You know, if they want to license the equipment or release it or rev share it, or there's a lot of models so that it's like accessible for everyone. But I also have been glad to see like a little bit more of a focus on the shopper experience and not disrupting that because I think like the traditional cooler screens that we all saw is like the V1 of this a couple of years ago really get in the way of the shopper experience. Some of the solutions we
[00:20:30] saw were a little more seamless. And then what that means is I think so that's the in-store piece. And then also even looking at like the gas station pumps, like how can those types, how can convenience stores get into the retail media on-site play by, you know, they have screens in a lot of the pumps and how can they get into those networks and make a space for themselves there? I think online we're starting
[00:20:56] to see a lot of smaller retailers figure out, try to figure out how to get more traffic to their sites so that they can take part in this retail media extravaganza as well. And so that in a lot of cases looks like how do we launch a third-party marketplace so that we have more assortment, so that we drive more traffic to just so that we can get, you know, our traffic numbers up. So it justifies more retail media spend. And now Amazon is offering a solution to retailers as well, like a whole retail media on-site, you know,
[00:21:25] online solution. So there's just like a lot of money flowing into this space right now on the tech side, on the advertiser side, on the retailer side. And so I, but I think it's also a space where advertisers need to be really careful because it's, it's tempting to just, we also saw some data that showed the shift of advertising dollars and how they were completely moving from out of home into retail
[00:21:48] media and from traditional advertising into retail media. And even it from, even, you know, how some of it's moving from traditional, like on-site, online retail media to in-store retail media. But, you know, if you don't have like a clear strategy and you don't know the shopper you're going after, like those investments still don't make sense. And the dollars for brands are an increasing year over year. So they just need to be more strategic and have the data to make the right
[00:22:16] choices. And I heard a lot about halo effects, a lot of talk about halo effects and how you can understand where your dollars are affecting other retailers outside of where you're exactly pinpointing. Exactly. And as more retailers launch their party marketplaces and they have more competition for the ads, you know, this, the CPCs are going to go up for the search ads. And so they'll start charging more. So I just, yeah, I totally agree. I think there needs to be a real strategy in terms of how you approach it.
[00:22:45] So Andrea, what surprised you about NRF other than how much walking we did? Oh my gosh. I think we clocked, I clocked in at least six miles a day. So for sure. 10,000 steps at the minimum. Yeah. Yeah. Okay. So this was one that you and I both looked at each other when this came up. The GLP-1 drugs and first, okay, first of all, just being in New York and taking the subway around and the subways are plastered with ads for GLP-1 drugs, like people injecting themselves
[00:23:14] with all of these different types of weight loss drugs. But more importantly, the session we went to where they talked about the impact to different, because so many people are using them now, that we're starting to see an impact across other industries. And this one blew me away. We're starting to see an impact to the grocery industry. People are buying different types of food and less food, less food. We're already seeing people buy, this is, this came from, this is PricewaterhouseCoopers, I think. Yes. PWC.
[00:23:41] Yeah. Yeah. PWC. They're starting to associate some of the strong growth that they're seeing in the apparel sector to GLP-1s because people's clothes don't fit them anymore and they need new clothes. And they feel good in their skin now, so they want to buy more clothes. They want to shop. Exactly. And in travel sector and dating apps. And that one, like, so the, it just surprised me. I think it was just like a surprise that, that those drugs are in such
[00:24:10] wide enough distribution and use that were, and impactful enough that we're already starting to see impacts to these other industries. So that one was a big surprise to me. We did both look at each other and our eyes were like, what? Because we knew about grocery, right? But I didn't even think about apparel or travel or dating, but it makes a ton of sense. Like when you feel more comfortable in your skin, which is an amazing, amazing thing that this has enabled for our country. Like you want to do more stuff and you want to get out there and like, and shop. And that's really exciting, but it's definitely something
[00:24:40] to be aware of as some of these trends shift. Absolutely. What about you? What was your big surprise? So one thing I was really surprised about was there was a large presence of retailers and brands from Latin America. Now this is my first NRF, right? So I don't have anything to compare it to. I spend a lot of my time focused on the US, Canada and EMEA, but there was a massive footprint
[00:25:03] from LATAM and retail media networks, retailers, new innovation. And I have the opportunity to talk to some of the LATAM retail media companies. And they were saying that there's such a big opportunity in LATAM around retail media because they have different types of stores. Shopping is a little bit different there. It's a little more specialized and it's a very cultural thing. So people in LATAM
[00:25:28] like to buy and work with other people in that area. So it was just really fascinating to me because I think it's an area ripe for disruption because they have the money to spend. They have the shopping experiences. There are brands that are there. So it'll be interesting to see how that shifts and how more brands spend more time and money in Latin America. I noticed that too, Lauren. Well, I
[00:25:55] noticed just a huge international contingency at the conference in general. I would say this is a much more international conference than some of the other ones that we usually go to. But definitely the LATAM population for sure. I sat down at a table at lunch at the Stratocash day and it was just a table full of executives. And I was like, great, I'll make some friends. And I sat down and I was like, hi. And I realized I was sat down at a table of like entirely Spanish speaking people. And I actually
[00:26:22] speak Spanish, but I was too shy to like speak up when they were talking really fast. So I just sat there and listened to their conversation. But it was so interesting because they were talking about, you know, in a lot of ways, some of the international retailers are a little further ahead on some of the in-store retail media and retail media in general, mainly because I think
[00:26:43] Amazon does not have the huge presence in some of the international locales that they do in the US. And so the other retailers in the US haven't really had an opportunity. They don't have a lot of traffic, so they haven't had a lot of an opportunity, at least online, to really develop some of those capabilities in the same way. And so I thought that was really interesting as well and a big surprise
[00:27:09] for me. Yeah, 100%. I think I have one other surprise. And we talked a lot about returns. And there was someone from Happy Returns. And you'll have to get me on this. I didn't get the full quote, Andrea, but he was saying that the amount of returns is equivalent to the military spend in the US, which I thought was insane. But the story he was telling resonated and it made so much sense.
[00:27:33] And he said, consumers aren't just buying the product. They're buying the return experience. And you and I looked at each other and we're like, yeah, we buy like 15 pieces of clothing with the intention to only keep maybe one. So you are expecting to have a seamless return experience in addition to just buying the product. And I don't know if brands are thinking about that end to end. I don't think so either. His name was Timothy Fair from Happy Returns. And he had a lot of great
[00:28:00] quotes. I got another one, too. He was hilarious. He was talking about how like a lot I mean, to sort of paraphrase, I got the sense he was saying like a lot of clients come to us and they're like, help us save money on returns. And they want they think that means their policy needs to be stricter. And he's like, no, no, no. The quote you gave about how when a shopper is buying a product, they're also buying the whole return experience and you actually need to make it better. And and so he said consumers expect that returns are free and easy.
[00:28:28] And if we and we would have to claw that expectation out of their cold, dead hands. He has some really good quotes. He had he was a very provocative speaker. But yeah, I thought that that was interesting. And then he said the other stat they gave was two thirds of customers will not visit a retailer again if they have a bad return experience. I agree when it's a bad experience. I'm like, I never want to go back there again or I won't buy the product because I don't want to deal with it. So I totally
[00:28:57] resonates with me. Absolutely. Well, Andrea, it was an absolute blast running around New York City's Javits Center with you at NRF. Thank you so much for recapping with me and sharing your thoughts. And till the next conference. Till the next conference. Thanks for the chat, Lauren. A huge thanks to Andrea for coming on the show and sharing her takeaways from NRF. If you are planning your conference travel for the year and want to learn from the best in person,
[00:29:25] be sure and register for the Digital Shelf Summit in April in New Orleans. More info and registration at digitalshelfsummit.com. Thank you for being a part of our community.