5 Questions with a Retail Expert: Chris Walton from Omni Talk
May 16, 2019 by Buck Devashish
Welcome to the first post in a new blog series called 5 Questions with a Retail Expert! Through interviews with experts and practitioners, this series will focus on what’s happening in the retail and commerce technology market. In each blog, we hope to peer into the crystal ball and capture insights as well as lessons learned from those on the front lines. And perhaps, we will get to know these pundits a little better.
So sit back and enjoy a conversation with our first Retail Expert: Chris Walton, CEO of Omni Talk.
For our readers who may not know you, what is your experience and background in the retail industry?
I have a 20 year career in retail. I started my career out in San Francisco with the Gap in the late 1990s, then went to business school and joined up with Target in 2005. At Target, I held a number of different roles and have a very unique background as a result. I spent a good number of years in traditional stores merchandising, running categories like seasonal bath and rugs, frozen food, and baby. I then went out to the field in Colorado to learn how to run stores. I ran my own store just south of Boulder, CO for a period of time and then I ran a district of 12 Target stores spread across Wyoming, Colorado, Nebraska, and South Dakota. Soon after, I returned to Minneapolis to become the Vice President of Home Furnishings for Target.com, later became Target’s first omnichannel merchant (i.e. the first to have P&L responsibility for stores and e-commerce at the same time) and then finished out my career as the Vice President of Target’s Store of the Future project, which was Target coming to me and saying “5 to 10 years out, why are people still come to physical stores to shop and how would you conceive of an omnichannel Target experience to answer that question?”
I left Target in the summer of 2017, after two years leading the Store of the Future, and have decided to devote myself to the study of that question ever since. I run my own blog Omni Talk, where I write articles and produce podcasts, as well as write for Forbes and The Robin Report regularly on the future of retail. I also am the CEO of Third Haus, a retail technology lab in Minneapolis, the idea behind which is to create a physical place for retailers, brands, and technology companies to come together and run experiments outside the mainstream of their operations but live in front of consumers to help them all answer the same question as well.
What do you see as the top trends in commerce technology?
The trends that fascinate me the most are Search, Social Commerce, and Scan-and-Go/Checkout Free Shopping:
Search – what usually blows my mind is the following statistic: 85% of all first product searches start on Amazon or Google, meaning only 15% actually start on retailer’s or brand’s websites. Stores as a means of find, seek, destroy product acquisition are dead. And, yet, search is just getting started. Search right now is all about helping us do what we explicitly tell a system to do. There is so much context in and around how we can search or even discover products both in the digital and physical worlds that is yet untapped. A great example is finding Meghan Markle’s favorite lipstick, an example I picked up from a company in the space, Narrativ. How does one search for this at a retailer? It is pretty difficult because item product data is not set up to capture this type of information. But the content is out there in the world and can be utilized to help consumers. Take this all and then imagine it too in the context of all the activity we do within a social network. It is just fascinating.
Social Commerce – which leads me to my next trend social commerce. Every 10 years or so, commerce platforms have changed digitally. Netscape in the 1990s, mobile phones and apps in the mid-2000s – so what’s next? Is it voice? Is it messaging? And, on what platform will we use these technologies? My money is on social and messaging as the next frontier or platform for commerce. The best way to think about it is on a horizontal line. A marketplace on one side and a social network on the other. Think Amazon on the one side and Facebook on the other. It is much harder to create a social network than it is to create a marketplace – you can build those capabilities over time, but social networks are sticky. Whoever controls the line has a data advantage, knowing both what consumers implicitly and explicitly want. Which is why you have seen Facebook+Instagram go after this space hard. If they can figure out how to get people from social discovery to buy, likely through an augmentation of text-based interactions, or easy click-to-buy navigation, look out!
Scan-and-Go and Checkout Free Shopping – the business model economics of bricks-and-mortar retailing have to change, which is why I think technologies that change the way consumers shop and change the operational costs of running retail could really matter in the long-run. Amazon Go and computer vision are the sexy topics – there are a ton of companies in this space, Zippin, AVA Retail, Standard Cognition, Grabango, Trigo, and more. I like the technology and I also like similar mobile scan-and-go based experiences, like what you see from Alibaba or even at Sam’s Club now here in the United States, that put the entire control of the shopping experience in the hands of the consumer in a very freeing and efficient way.
In your opinion, what are the top challenges in retail today?
In my mind the biggest challenge is around legacy thinking against new consumer expectations.
As I wrote recently in a whitepaper with Yantriks, retail is now different. Throughout history, retailers competed in three dimensions – brand, assortment, and price. As long as a retailer did those three things well, within the scope of its brand promise, things were in good shape. But digital changed everything in the late 1990s. It raised consumer expectations. Now speed and convenience are the new fourth pillars of retail differentiation. We live in a “have it now” culture, fueled by the millennial generation. If high school kids want a Starbucks, it is the expectation that they can have their coffee delivered right to school!
This puts tremendous pressure on retailers to adapt, many of whom are led by, often times, white men in their mid to late fifties who only ever had learned the playbook for the first three pillars. Thinking about all four, across both the digital and physical worlds, is like asking them to exercise an entirely new mental muscle, a task that, as the Backwards Bicycle video on YouTube illustrates, is damn near impossible.
Which is why I am short on legacy retailers and long on new players figuring out and carving out niches in both digital and physical retail over the next 30 to 40 years. The retail pie will look very different then from what it does today.
Where do you see retail technology evolving toward over the next 5 to 10 years?
Over the next 5 to 10 years, on that horizon, I expect a big shakeup in the industry. Mall-based experiences will change dramatically, taking with them department stores and specialty retailers that cannot adapt and create true reasons for being. Put Macy’s at the top of this list, as a company that will look quite different 10 years from now.
Grocery and convenience retailing too will be one hell of a battleground. Amazon is coming for both spaces, and the disruption will be intense.
The retailers that survive will be the ones who understand why people desire to shop at them digitally and, just as important, physically too. Stores have always existed for five key reasons: 1) Inspiration 2) Convenience 3) Immediate Gratification 4) Taction – the ability to touch, to feel, and to get confidence in a purchase, and 5) Experience. There’s no denying it. Tech can be sexy, even experimentation can be sexy, but if your work isn’t grounded in tried and true concepts that make people’s lives better and that are grounded in these “universal truths,” as Amazon calls them, of how consumers want to shop, then you won’t accomplish much.
When you look at who will survive it will be who understands the dichotomy between digital and physical experiences the best. 5 to 10 years out the only real differences between physical and digital retail experiences will be points #4 and #5 – the ability to touch and to feel products and the experience of being somewhere. Retailers aren’t built for these two things right now. They have only been a means to acquire a product, but the product can now be had, as I said before, anytime at a press of a button. Retailers need new value propositions within the physical world on these two dimensions to stay relevant to their consumers.
If you weren’t a retail and commerce expert, what profession would you choose and why?
This is a great question. If I wasn’t focused on retail, I think I would still try to find time writing and putting my mind in the creative space. Retail writing gives me a great outlet to express my personality and sense of humor, so if I wasn’t writing about and producing content about retail, I would probably turn my efforts to another topic just as interesting to me.Amazon,Chris Walton,New Retail,Omni Talk,Red Archer,White Paper