The sticker on the back window of an Uber I spotted in Miami advised riders to: “SIT DOWN! SHUT UP! HOLD ON!” Aside from the directness, the sign could have been referencing the wild ride that marketers are on as the world of commerce (from e-commerce to physical retail) continues to evolve at a head-snapping pace.
To get a handle on what’s happening, a group of leaders from CPG brands, retailers, tech companies and marketing agencies met in Miami last week at “WPP Commerce 2023”, an annual event held by WPP, which calls itself the “Creative Transformation Company”. Attendees were there to learn, share and be inspired by the new challenges, emerging channels and dramatic changes facing the industry. The theme: “The Commerce Revolution”.
As MC and CEO of VMLY&R Commerce, Beth Ann Kaminkow, told the audience: “Over the last quarter century, technology has put power in the hands of shoppers, evolving rapidly from single channel promotions centered on the store, to end-to-end unified commerce that can happen anywhere in the purchase journey.” But that’s not the end of the story, Kaminkow continued. “This year, it’s not about more evolution, it’s about revolution. 2023 will require a revolutionary response from brands, retailers, and their marketing partners. More than tech, it will take genuine partnerships and an explosion of creativity to engage consumers and shoppers.”
Over the three days of the conference, a variety of speakers – from investor and Shark Tank regular Mark Cuban to marketing professor-turned-pundit Scott Galloway, to fashionista-with-a-conscience Aurora James – poked and prodded at the nature of commerce in the second decade of the 21st Century.
Here are six key takeaways:
1. Transparency is the New Authenticity.
Mark Cuban told attendees that “the way to disrupt” categories today is to be “transparent” with customers. That adds up to a new level of honesty in the way a product or offer is presented, and is demonstrated by Cuban’s costplusdrugs.com, where the equation is simple: manufacturer price on medicines, plus 15%, plus pharmacy fee to prepare and provide the prescription. “No middlemen. No price games. Huge drug savings.” And a mission to give “every American…access to safe, affordable medicines.”
2. Artificial Intelligence is “Tech of the Year”.
Scott Galloway is known for his “Winners and Losers” predictions. During a provocative address, Galloway called “the Zuckerverse” a “fail” (in reference to Meta’s investment in the Metaverse – mind you he is still bullish on the stock). Galloway then nominated TikTok as “the most ascendant tech platform in history” (his enthusiasm moderated by concerns about its potential as a “propaganda machine”), and AI “Tech of the Year” for 2023. The last prediction is hardly surprising, but WPP’s Roy Armale offered additional insights on AI . “It’s not that AI has reached a tipping point, it’s the accessibility of AI” via interfaces like Chat GPT, Armale said. “(The platform) offers up a conversation, the simplest form of interaction in the world”.
3. Social Commerce is Where the World Will Buy.
The interfaces are still a little clunky, and the formats are still being worked out, but the future is clear – Social Commerce is the new store. This sales channel is expected to increase at 31% compound annual growth rate (CAGR) through to 2030, and already about half of Gen Z and Millennials purchase on social. “We haven’t scratched the surface as to the power of Social Commerce,” one prominent CPG marketer said on the main stage. Meanwhile, TikTok reported that there are now 43.8 billion views of #TikTokMadeMeBuyIt, the hashtag attached to product purchases on the platform. It’s also likely that the boom in livestream shopping in China will finally migrate to the West. For commerce marketers, Social Commerce must be one of the big bets going forward.
4. Funds are Flowing to Retail Media.
Traditional media is about mass impressions and awareness. Retail Media is about individual shoppers and getting close to the point of purchase. No wonder it’s taken off in popularity – $41 billion was spent on this channel in the US in 2022, with a rise to over $51 billion expected this year, and $61 billion in 2024. If there was one topic that resounded through the conference halls, it was Retail Media. Just as important though, was how it would be managed. As Peter V.S. Bond from “The CPG Guys” podcast said, “the biggest challenge is going to be justifying how ad budgets will be modified to accommodate the emergence of Retail Media”. And there was much discussion around how to organize around the new channel – recognizing that it will take a “team around a table”, with sales, finance, brand, and marketing teams working together.
5. The Store is Dead. Long Live the Connected Store.
Physical retail made a comeback post-COVID. But it too is undergoing a revolution. In both the Tech Lab at WPP Commerce, and on the main stage, experts talked about the digitizing of the in-store environment, making it the most powerful (and trackable) medium to deliver an “experience”. The game-changer is 5G technology, which means the store can be reliably connected to the Internet. This enables constant updates, intelligent shelves, interactivity, and basic functions like streaming video. On the last point, Ranjana Choudry from Wakefern noted that “video in store increases purchase intent by 82%”.
6. Capitalism with a Conscience is Coming Fast.
According to Wunderman-Thompson’s “Future Shopper” report, 65% of global consumers say ethics and morals count in online purchase decision making. That came to the fore in a main stage interview with fashion designer turned “retail revolutionary”, Aurora James. “Doing good is good for business”, said James, who created the “15% Pledge”, which asks businesses to dedicate 15% of their shelf space to Black-owned brands, mirroring the percentage of Black people in the US population. From Sephora as the first retailer to sign on, to Nordstrom, which has agreed to a 10-year commitment, the 15% pledge now has 600 Black-owned brands on the shelves, with many more to come. No retailer is doing this out of the goodness of their own hearts; there is a definite payback expected. “Altruism alone does not fuel capitalism,” James mused.
In years to come, we may recognize this time as an inflection point in the “Commerce Revolution”. Right now, however, we are in mid-air, building and flying the plane at the same time. It’s exciting, but it’s also daunting, and events like this allow us all to pause, reflect, and recalibrate for the next phase of development.
- Jon Bird is an advisor at VMLY&R COMMERCE
Originally published in Forbes