YouSaid · the spoken record

Michael Dart

lines on the record: 27
first: 2017-08-22
most recent: 2017-08-22
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“So I think if you're a consumer, if your ultimate goal is finding the goods that you want, sure, those will get to you. If there's any downside, it's that the retailer will know how to push your buttons. It's not doing a disservice to you, but commercial success for a retailer is based on your buying as much as they can possibly sell you. So the smarter a brick and mortar than you need, perhaps. Most certainly. So the better this business intelligence gets, in a sense, good thing for the economy, the consumer will certainly be more inclined to spend more aggressively when they're out there.”
2017-08-22 · Goldman Sachs Exchanges · The Store of the Future · IDENTIFIED FROM THE TRANSCRIPT
“To invest in their businesses because e-commerce is coming at them a little more slowly and the erosion in their core is happening more gradually. Those companies, I think, will have more ability, time and resources to invest, to come out the other side more wired and much more intelligent about what goes on inside their boxes.”
2017-08-22 · Goldman Sachs Exchanges · The Store of the Future · IDENTIFIED FROM THE TRANSCRIPT
“Sure. So I think there will be some survivors within that group, there will be companies that thrive. One of the elements we think about is which ecosystem is most likely to do well. And if I think about the mall-based ecosystem, it's a somewhat more challenging ecosystem, if only because there's real interdependence among concepts and businesses. And if you see anchors pull out their boxes, if you see specialty apparel retailers start to shutter their boxes, you'll have too many vacancies and too dysfunctional of a mall for it to really do all that well. So we're likely to see, I think, over the long run, mall capacity actually come down, standalone brick and mortar retailers and so-called strip center brick and mortar retailers capture some of that market share. I also think you'll see companies that are a bit lucky based on their assortment, a bit lucky based on their demographic, a bit lucky based on their geography that have a little more time.”
2017-08-22 · Goldman Sachs Exchanges · The Store of the Future · IDENTIFIED FROM THE TRANSCRIPT
“So retail plays a huge role in the economy, the US economy as a whole accounts for more than 10% of private sector employment. How might these two models, the e-commerce model of a distribution center and the brick and mortar model of a showroom, leverage talent differently? And how might that change the nature of retail jobs?”
2017-08-22 · Goldman Sachs Exchanges · The Store of the Future · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, interestingly, a lot of the e-commerce startups are actually building brick and mortar stores, if only for brand awareness. You'd think if you had a great brand to begin with that investing a little bit of technology would make sense. Totally.”
2017-08-22 · Goldman Sachs Exchanges · The Store of the Future · IDENTIFIED FROM THE TRANSCRIPT
“Well, brick and mortar, again, you know, investing in a declining ecosystem is a tough ask. And I think that is to some degree true for enabling technology. We're hearing and seeing some of the legacy incumbents, be it Intel, be it Salesforce with its purchase of demandware, be it Microsoft. They are all acutely aware that the retail industry needs help. So there are some legacy firms that are reaching out and saying, hey, we can provide you with these solutions as part of our more holistic technology offers to you. There are a few emerging businesses, many of them VC funded, that are trying to help retailers solve these problems. Retail next is one of the larger ones, and we feature them in our report, and a couple of venture capital firms that have really zoned in on this work. But when you think about the fact that retail, the retail industry writ large had $80 billion of CapEx expended in 2015, 2016.”
2017-08-22 · Goldman Sachs Exchanges · The Store of the Future · IDENTIFIED FROM THE TRANSCRIPT
“So related to this, there's obviously a lot of money in retail, and there seem to be opportunities for innovation. But when it comes to venture capital, traditional retailing, seeing almost nothing, really, and investing in the store of the future, as you said, seems pretty light relative to pure play e-commerce. So pure play e-commerce is getting the new dollars. Why do you think that is?”
2017-08-22 · Goldman Sachs Exchanges · The Store of the Future · IDENTIFIED FROM THE TRANSCRIPT
“So what seems to be transpiring in many instances is a sort of paralysis. And I think one of the challenges, and I'm sympathetic to it, is that if your core brick and mortar business is losing revenue every year and flat at brick and mortar is kind of the new up five. It's hard to grow brick and mortar revenue. Retailers seem to be hesitant to put incremental capital into a business if they're not sure that business or that infrastructure will be there three to five years from now. We think the winners are going to make that investment nonetheless because the best way to preserve that brick and mortar we think is to invest in that brick and mortar.”
2017-08-22 · Goldman Sachs Exchanges · The Store of the Future · IDENTIFIED FROM THE TRANSCRIPT
“So it was scary to see how little is being discussed, at least externally by the largest retailers about some of the technologies that we explored. So, of course, one thought might be, well, maybe this is a flash in the pan. Maybe this is pie in the sky. Maybe the ROI is not there. But I think it's too early and the technology is evolving too quickly to be dismissive of investment of this sort. A second consideration might be, well, hey, this is all triple top secret for each retailer and everyone is on the cusp of rolling out a terrific solution. I think enough time has elapsed that that's unlikely.”
2017-08-22 · Goldman Sachs Exchanges · The Store of the Future · IDENTIFIED FROM THE TRANSCRIPT
“So, you and your team did a really interesting analysis of earnings calls, financial reports, analyst meetings with some of the biggest names in retail. And you were particularly looking to see whether some of these technologies were top of mind in the space. You didn't find very much. So why do you think that is, and what do you think it says about the susceptibility of brick and mortar retail to further gains by e-commerce? Are they just not paying enough attention to the latest technology?”
2017-08-22 · Goldman Sachs Exchanges · The Store of the Future · IDENTIFIED FROM THE TRANSCRIPT
“Exactly. You don't even have to do self-checkout. The store executed appropriately, knows who you are and what you've walked out with. That is sort of the optimal manifestation of some of the technologies we're talking about. We'll see if and when that opens to the public, how that plays out.”
2017-08-22 · Goldman Sachs Exchanges · The Store of the Future · IDENTIFIED FROM THE TRANSCRIPT
“With sensors, a very interactive experience very focused on capturing business intelligence, very focused on feeding associates insight about who is in the store and the moves they're making as they walk through. On the opposite side of the spectrum, Amazon has developed a box in Seattle called Amazon Go. So far open only to Amazon employees, while I've seen it, it's only been from the outside. And this is a frictionless cashless experience where you walk into the store through your phone, the company knows who you are, and they use sensors to detect what you're taking off the shelves and keeping with you and essentially you can just walk right out of the store with your basket with your bag with your instead of scanning.”
2017-08-22 · Goldman Sachs Exchanges · The Store of the Future · IDENTIFIED FROM THE TRANSCRIPT
“So we've been writing about the store of the future. One of the ironies to us is that so-called stores of the future historically were a lot like the stores of the past, just bigger, more expensive, and not necessarily more effective. There are a couple of models that we've seen that try to take some of the technologies we're looking into to the next level. So there's a UK company called Farfetch. Farfetch is in essence a platform that tries to provide an online solution for high-end brands and boutiques that are too small to necessarily fund a super high quality e-commerce interaction and don't necessarily want to sell on a more mass market oriented platform. So this is in a sense a curated platform. Farfetch is developing technology that they've showcased to the media so far in London and will be rolling out to a store under an acquired brand in New York most likely this fall that is loaded with RFID loaded”
2017-08-22 · Goldman Sachs Exchanges · The Store of the Future · IDENTIFIED FROM THE TRANSCRIPT
“I personally would like in a grocery store some technology that told me where the things that are hard to find are, but maybe that's coming. So if retailers have to innovate beyond some of the a la carte technology we discussed, what kinds of holistic models are there out there that might redefine the store?”
2017-08-22 · Goldman Sachs Exchanges · The Store of the Future · IDENTIFIED FROM THE TRANSCRIPT
“In that store. There it behooved the associate to know who you are, either specifically who you are or based on some kind of purchase profile, to know what you've looked at, what you've tried on this visit to the store or on others, and then to tilt their service orientation towards you to try to optimize your path to purchase and increase the probability that you buy. So there, you might see RFID directed towards, for example, getting an item to light up when you're nearby, pick it up. And in a sense, a dressing room, a smart dressing room with an opportunity to interact with employees via a smart mirror as you're in the store pushing buttons and say, hey, this is an item that we'd like a size larger or a size smaller.”
2017-08-22 · Goldman Sachs Exchanges · The Store of the Future · IDENTIFIED FROM THE TRANSCRIPT
“So, one of the real interesting findings for us is that some of the same technology can be deployed both for business intelligence and for actually enhancing the customer's experience. So think about a supermarket. High volume, low margin. A supermarket really can't afford to reach out to you as an individual and say, hey, we'd really like you to buy this particular can of tuna fish as you're walking down aisle number six. And they certainly can't afford to have a store employee reach out to you and say, how's about that tuna knowing that you're someone who might buy that can of tuna when appropriately prodded? If you're a mass market retailer, you want to optimize your inventory, you want to optimize your pricing, you want to think about very scalable solutions. Think though about a beauty retailer or a high-end fashion retailer where the ticket might be $1,000, $2,000, $3,000, where there will typically or optimally be a human interaction anyway with someone working.”
2017-08-22 · Goldman Sachs Exchanges · The Store of the Future · IDENTIFIED FROM THE TRANSCRIPT
“Let's talk a little bit about the divide between high-end retail and luxury and sort of the bargain side of things. Some of the innovations we're seeing in the brick and mortar space have a lot to do with enhancing the experiential side of being in a”
2017-08-22 · Goldman Sachs Exchanges · The Store of the Future · IDENTIFIED FROM THE TRANSCRIPT
“I think ultimately it is. And one of the things that's excited us is we've worked on this is that the capabilities of the technology that has emerged to help this space have really increased dramatically in a short period of time. And we think that there are opportunities for investment that can pay off. What we see as most exciting is the convergence of the Internet of Things, essentially sensors that track who is doing what and how they're going about it with artificial intelligence that can interpret those observations and make recommendations to retailers. For example, sensors about who's walking into the store based on a wireless signal or based on a sensing of age and gender based on certain physical profiling that the sensors are capable of executing. Sensors tracking your emotional response to a product, to a price. This data can be aggregated and through AI, those observations”
2017-08-22 · Goldman Sachs Exchanges · The Store of the Future · IDENTIFIED FROM THE TRANSCRIPT
“So, what about investing in that? Does that just hurt their margins? Would that help the store? Obviously, some retailers are using a lot better data in terms of RFIDs to keep track of what's going on in the stores, gathering data on their customers through loyalty programs. Why isn't that the way forward for the retail store?”
2017-08-22 · Goldman Sachs Exchanges · The Store of the Future · IDENTIFIED FROM THE TRANSCRIPT
“Think about a brick and mortar retailer. They build a store, they hope somebody comes. You walk in, they don't know who you are, they don't know what product you're looking at, they don't know what product you're taking off the shelf, what product you're putting back, what product you are leaving it to register. They're not quite sure whether you took a left or a right when you walked into the store. They're not sure why you made the decisions that you made and what they can do to change your mind. Finally, you walk out with a purchase depending on how you pay. They might have no idea who you are and whether you ever come back. There's a lot of knowledge that a brick and mortar retailer doesn't have that an online retailer does. We think that's a fundamental deficit of brick and mortar as it's been executed so far.”
2017-08-22 · Goldman Sachs Exchanges · The Store of the Future · IDENTIFIED FROM THE TRANSCRIPT
“So, you know, obviously, throughout the history of retail, you've seen evolving generations of store models and companies thrive and then fade. And we're seeing to some degree that cycle evolving in retail today. It's happening to some degree with department stores. It's happening with some of the older retailers kind of down on their luck and moving in a difficult direction. But one thing that we see is sort of an intrinsic business intelligence gap. the typical brick and mortar retailer today has relative to an online retailer. Think about the customer's journey to purchase and what the online retailer can see. When you log on to any good e-commerce retailer, they jake know you by name. They probably know your purchase history. They know your triggers. Y or z by color, by item, by price point. And they to some degree customize elements of your journey based on what they've learned. Then they continue to learn as you walk through this.”
2017-08-22 · Goldman Sachs Exchanges · The Store of the Future · IDENTIFIED FROM THE TRANSCRIPT
“Sense of barrier to entry for brick and mortar retailers to match what Amazon is able to do logistically, to match the kind of delivery value proposition that they can offer at the prices that they charge. Secondly, if you're a brick and mortar retailer, there is a tension between the growth that you can generate online and the business that you continue to operate offline. So let's say you transfer five cents out of a dollar of sales to your online effort. What about the person in the store who would have serviced that customer? What about the rent? There's intrinsic deleverage there. So retailers, I think, are simultaneously trying to grow their brick and mortar businesses, trying to grow their online businesses while preserving their brick and mortar businesses and keep those economics intact. It's a very tough dance, if you will.”
2017-08-22 · Goldman Sachs Exchanges · The Store of the Future · IDENTIFIED FROM THE TRANSCRIPT
“First of all, e commerce, you have to admit as a consumer, as an investor, as an observer, is compelling. You get to sit at home with an endless aisle and endless assortment of goods, pay typically as low a price or lower as you'd pay in a store, and have that product delivered to your home more or less when you want it to be there. It's hard to match that for some categories in terms of price value, convenience, et cetera, through brick and mortar. So there's an underlying fundamental reason why e-commerce is continuing to gain share. Now, why doesn't a brick and mortar retailer simply say, okay, that's a better way to do business, we'll tilt in that direction. First of all, interestingly and somewhat ironically, Amazon has enough of a head start in this marketplace by having raise money early and tolerated losses early when it was smaller, that it's created enough scale.”
2017-08-22 · Goldman Sachs Exchanges · The Store of the Future · IDENTIFIED FROM THE TRANSCRIPT
“Why can't retail outlets, retailers simply invest in their own online channels to account for those who want to shop that way and just leave those who like the traditional store, leave brick and mortar alone?”
2017-08-22 · Goldman Sachs Exchanges · The Store of the Future · IDENTIFIED FROM THE TRANSCRIPT
“Exactly. There's really a function on cost and efficiency. Conversely, if you want to showcase goods, then most certainly it's worth it having real estate where you have lots of people walking around. They pass by it naturally. It's a very central location. We think that companies that will succeed are going to tilt towards one model or the other. They're going to try to optimize their logistics or optimize their boxes as a showroom. So if you think about brick and mortar retailers like warehouse clubs, Costco and Sam's Club, et cetera, those were really built first and foremost for logistics. The showroom element of them is really almost happenstance. On the flip side of that, think about a high-end store in Fifth Avenue or Madison Avenue, a boutique that's really focusing on showcasing goods and the distribution element of that business really is secondary. Those are two models that we think can work. We think the models that will struggle are models that try to have big”
2017-08-22 · Goldman Sachs Exchanges · The Store of the Future · IDENTIFIED FROM THE TRANSCRIPT
“So, one of the real problems in U.S. retail today is that you have too many companies who are trying to distribute as efficiently as Amazon in real estate that is really priced for showcasing goods. Amazon runs DCs that are, and most retailers run distribution centers do so somewhere out in the desert, maybe 50 miles outside of town. They might be staffed by people. They might be staffed by robots.”
2017-08-22 · Goldman Sachs Exchanges · The Store of the Future · IDENTIFIED FROM THE TRANSCRIPT
“So today, brick and mortar retail represents about 85 cents of every retail dollar transacted. If e-commerce continues to grow at a fifteen percent annual clip for the next five years, that number would still be seventy percent. That seventy percent of retail sales transacted via brick and mortar five years from now. The business might be getting a bit smaller in aggregate, but it's certainly big enough to matter and will be big enough to matter for a long time.”
2017-08-22 · Goldman Sachs Exchanges · The Store of the Future · IDENTIFIED FROM THE TRANSCRIPT