Marketplaces are the New E-Commerce
Retail DisruptedNovember 26, 2024
55
44:5561.7 MB

Marketplaces are the New E-Commerce

Marc Vicente, Group Digital Director at Kingfisher, joins Natalie for a comprehensive discussion around e-commerce, AI, marketplaces, retail media, and more.

They explore:

  • Why omnichannel retailers are now embracing the marketplace model
  • The role of physical stores in e-commerce
  • Innovative partnerships: Deliveroo and the importance of speed
  • The significance of Black Friday for Kingfisher and why it starts earlier every year
  • Retail media: monetizing the marketplace and understanding the 3 stages of retail media implementation
  • From chatbots to personalized recommendations and visual search, how is Kingfisher enhancing the customer experience with AI?
  • The future of retail: what is Marc most excited about for 2025 and beyond?

Marc’s bio:

Marc leads the digital transformation and oversees the strategy and operations at one of the largest home improvement retailers in Europe – which has 82,000 colleagues across 2,000 stores in eight European countries, and a number of retail banners including B&Q, Screwfix and Castorama. Before Kingfisher, Marc spent 15 years delivering disruptive technology-based growth in senior international roles such as Chief Operating Officer and Executive Officer at Rakuten Europe and Chief Operating Officer at Cdiscount.com, the French e-commerce leader.

Connect with Marc on LinkedIn

[00:00:07] You're listening to Retail Disrupted, a podcast that explores the latest industry developments and the trends that will shape how we shop in the future.

[00:00:16] I'm your host, Natalie Berg.

[00:00:29] Welcome back to another episode of Retail Disrupted.

[00:00:32] You might have seen the news over on LinkedIn that the podcast has hit a pretty major milestone.

[00:00:37] It's now had over 10,000 downloads.

[00:00:40] To me, this kind of feels like a big deal when you consider that when I first started out, I recorded an episode where half of the episode I didn't realize that my microphone was on mute.

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[00:01:28] There's so many interesting people to speak to.

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[00:02:01] More than you realize.

[00:02:02] Finally, I will be sharing the details soon.

[00:02:05] But I wanted to announce that the Retail Disrupted newsletter is going live.

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[00:02:25] Now, for today's episode, I'm delighted to welcome Mark Vicente to the podcast.

[00:02:31] Mark is the Group Digital Director at Kingfisher, which, as many of you know, is one of the largest home improvement retailers in Europe.

[00:02:38] In his current role, Mark leads Kingfisher's digital transformation, and he also oversees strategy and operations.

[00:02:45] Prior to joining Kingfisher, Mark spent 15 years delivering disruptive technology-based growth in senior international roles,

[00:02:53] such as Chief Operating Officer and Chief Executive Officer at Rakuten Europe,

[00:02:57] and Chief Operating Officer at the French e-commerce retailer, cdiscount.com.

[00:03:03] Mark, thank you so much for being here today.

[00:03:05] I just gave a brief introduction, but perhaps you can tell us a little bit more about yourself and your role at Kingfisher.

[00:03:13] Absolutely. And thank you for having me, Nathalie. It is a pleasure to be here with you today.

[00:03:17] So in terms of my background, first of all, I'm from Barcelona.

[00:03:21] I'm very lucky, and that's where I was raised.

[00:03:24] That's where I started studying, and that's where I had my very first job.

[00:03:28] But around 15 years ago, I left, and since then I've been traveling quite a lot.

[00:03:34] I lived in England for two times now.

[00:03:36] I'm based now in London.

[00:03:37] I've been in Germany.

[00:03:38] I've been in France, and I've been also in Czech Republic

[00:03:41] and dedicating quite a lot of periods of my career in the U.S., in Japan.

[00:03:44] And during that period, I did pivot a lot in between some major corporations,

[00:03:50] mostly within retail and e-commerce business,

[00:03:54] but also I did a lot of other startup business into gaming, travel, edtech, etc.

[00:04:03] And right now, since the last almost four years, I've been at Kimfisher.

[00:04:08] So I'm the group digital director at Kimfisher,

[00:04:11] and pretty much I'm in charge of four different areas.

[00:04:13] One, marketplace business model.

[00:04:16] Second, everything to do with e-commerce and the key elements within that part of the business.

[00:04:21] Three, retail media.

[00:04:23] And finally, everything to do with data, including AI analytics, etc.

[00:04:26] Fantastic.

[00:04:28] And I know we're going to dive into all of those topics in more detail.

[00:04:31] But before we do that, I think let's just take a step back and talk about Kingfisher for a moment,

[00:04:37] because it is an interesting business.

[00:04:38] And a lot of our listeners are based in the UK,

[00:04:41] so they will be familiar with B&Q and Screwfix.

[00:04:44] But you trade across eight European markets with six different retail banners.

[00:04:49] So in addition to B&Q and Screwfix, you have Castorama, Rico Depot, TradePoint,

[00:04:55] Kushtas.

[00:04:56] Just briefly, Mark, can you talk us through the rationale for having such a diverse set of banner names?

[00:05:02] Would you say the businesses are distinct enough to help you reach customers in different ways?

[00:05:07] We consider that one of our strengths.

[00:05:11] Our strategy, we call it Power by Kimfisher.

[00:05:15] And Power by Kimfisher aims to maximize the benefits of combining very different retail brands

[00:05:22] and with the skill and expertise that the group brings into them.

[00:05:26] So growing by building these different brands actually allow us to be very differential,

[00:05:32] because at the end of the day, we can target, as you say, different consumer segments.

[00:05:37] Simplifying a lot, we target three very different consumer segments.

[00:05:41] We have the discounter brands, such as Rico Depot.

[00:05:45] We have the big box banners, which they target mostly on the DIYers, people like you or me,

[00:05:51] which on the weekend we want to fix our garden.

[00:05:53] And here you have Castorama or you have B&Q.

[00:05:57] And then we have the brands that are more focused into trade,

[00:06:01] where you will recognize Screwfix or TradePoint that we have here in the UK.

[00:06:07] Somehow all of them can benefit from the same business availability,

[00:06:11] but at the same time, they allow us to target multiple consumers covering a much larger demand.

[00:06:16] Let's talk about e-commerce.

[00:06:18] I am a total retail geek.

[00:06:20] So before our conversation, I dug through some of your past annual reports.

[00:06:25] And I noticed that five years ago, just before COVID hit,

[00:06:28] e-commerce made up 8% of your total group sales.

[00:06:32] And correct me if I'm wrong here, Mark,

[00:06:34] but I imagine that the bulk of that would have come through click and collect rather than home delivery.

[00:06:38] Now, that penetration rate is currently at just under 20%.

[00:06:43] So you've obviously grown your online sales in that short space of time.

[00:06:47] And your goal is to reach 30%.

[00:06:50] So, Mark, what's driving this?

[00:06:54] Because obviously we had a pandemic, which accelerated the shift to digital.

[00:06:58] But the online home improvement sector is still going strong.

[00:07:01] So I wonder, are you seeing a more fundamental shift here in terms of technology and consumer behavior?

[00:07:08] Absolutely.

[00:07:09] And constantly.

[00:07:10] And as you well said, it has been a very interesting journey for us since this period over the last five years.

[00:07:17] Not only because all the progress we have made internally, which is a lot,

[00:07:22] but also because everything that has changed into the market and the consumer perspectives.

[00:07:26] I would say that our strategy from an e-commerce perspective is to focus on offering choice, speed, and also convenience to our consumers.

[00:07:35] And what we have seen is that these three axes combine very well with the expectations that these clients have,

[00:07:41] and they have evolved and mature over the last years.

[00:07:44] For choice, in our case, we saw that the best way to match the demand of the expectations of the consumer was to focus into delivering the marketplace business model,

[00:07:55] which allowed us to open our pipe to third-party vendors.

[00:07:58] And we can go more into detail into that later.

[00:08:00] And obviously, it has been a great adventure that we did focus on.

[00:08:04] In terms of speed, we did focus on a lot of elements connected to the last mile in terms of the consumer delivery,

[00:08:13] making it easier to do click and collect, but also striking some partnerships, as I want you to say, with Deliveroo more recently.

[00:08:19] But also, there are many other things that we have been doing,

[00:08:22] connecting our fulfillment capabilities to pickup points or lockers and stuff like that.

[00:08:27] But then convenience is all about how you combine these two things to a seamless experience for our consumers

[00:08:33] so they have the capability to choose the right times that they want to do, the pickings,

[00:08:39] the capability for them to choose if they prefer to go to the store or receive it at home.

[00:08:44] And these things combined have allowed us to increase traffic, increase conversion, increase repetition, and number of consumers.

[00:08:54] As I say, it has been a big journey.

[00:08:56] And I would say that investing in technology, investing on a proper omni-channel proposition has been the key elements that made this improve a lot.

[00:09:06] That's really interesting.

[00:09:07] And I'd like to drill down into some of the things that you've just touched on.

[00:09:11] So if we start with marketplaces.

[00:09:14] Now, historically, when we heard the word marketplace, a lot of us thought of Amazon or Alibaba or eBay.

[00:09:20] You know, these are huge platforms, millions of sellers, so much choice for the customer, you know, near infinite assortment, right?

[00:09:28] And usually pretty speedy delivery.

[00:09:30] That's the kind of model that comes to my mind when I hear the word marketplace.

[00:09:35] But today what we're seeing is more and more legacy retailers, those with both an online and physical store presence,

[00:09:41] are moving into the space and they're finding a lot of success.

[00:09:44] Yes. So just here in the UK, we've seen Tesco, Nex, M&S, and of course you guys at B&Q have launched third-party marketplaces.

[00:09:54] I'd love to get your thoughts on this, Mark.

[00:09:55] What is driving this trend and what are the benefits both for retailers but also for shoppers?

[00:10:02] It's an excellent question.

[00:10:03] In fact, if we go back to the origins of the success of the marketplace model, I think it has gone through three major stages.

[00:10:14] First, we saw a lot of generalist pure players that started at a given time to develop this kind of business model.

[00:10:23] Obviously, the Amazons of this world and many others.

[00:10:28] A few years later, it came the moment for the verticalization where not only generalists but especially players started to offer a curated experience

[00:10:38] based on specific categories and specific products, also combining the marketplace business model with the first-party model.

[00:10:46] And that's where you get, for example, Zalandos, a marketplace model, which is also very specific in one concrete category.

[00:10:53] Or Wayfair and Furniture as well.

[00:10:55] More recently.

[00:10:57] Exactly.

[00:10:57] Exactly.

[00:10:58] And what you have seen more recently and probably more recently, we can go back to the last five years,

[00:11:03] is that we are now getting into the era of the omnichannel marketplaces, which at a personal level,

[00:11:09] that's the experience I've gone at B&Q and it has been a great learning.

[00:11:13] Because when I joined Kim Fisher, my very first mission precisely was to help at building this marketplace capability.

[00:11:23] The very different element of the question was, well, we are not a pure player.

[00:11:27] We are not an active digital operator.

[00:11:30] We are a traditional retailer who wants to embrace new technology and new ways to do the business.

[00:11:37] So how can we win?

[00:11:39] So what we have seen, not only for us, but happening across multiple markets and industries,

[00:11:44] is that by developing a marketplace and connecting it to an omnichannel traditional retailer,

[00:11:49] you have several different challenges, obviously, but many other advantages.

[00:11:55] Some of the advantages are very simple.

[00:11:57] First, we are a trusted, reliable brand that consumers go to by default.

[00:12:03] We have millions of consumers who have been buying in our brands for many different years.

[00:12:07] Therefore, where suddenly you are increasing your supply, where you're increasing the offering and the proposition of the choice that you give to your consumers

[00:12:14] out of these brands into an integrated experience,

[00:12:19] the way you get traction is much faster than if you are starting from scratch,

[00:12:24] you're starting from a known, non-respected or well-known brand.

[00:12:27] The second element, which is interesting, is about the connection with the stores.

[00:12:33] You can connect the stores with the marketplace by allowing returns.

[00:12:38] You can buy a marketplace product that is shipped from a third-party seller or your own fulfillment capability if you have it,

[00:12:45] and allow the customers to return that product into the market, into the stores.

[00:12:49] In fact, at the very beginning, we actually, we did question,

[00:12:54] should we offer that possibility to our consumers?

[00:12:57] Should we offer them the possibility to return the product into our stores?

[00:13:00] Because that adds complexity.

[00:13:02] And we decided to do it because we thought that would be a competitive advantage.

[00:13:06] And at the same time, we thought that consumers will like it.

[00:13:10] And in fact, thank God we did it.

[00:13:11] Because no matter if you offer it or not, consumers by default will think that they can do it.

[00:13:16] Because they actually don't care if this is a third-party product or it's not a first-party product.

[00:13:21] They will by default think, well, this is something I bought at Castorama or at B&Q.

[00:13:25] Therefore, if there is a question, if I want to return it, I'm going to go to the store.

[00:13:30] So almost accidentally, you are forced to do it.

[00:13:33] So we did that on purpose, and that actually worked very well.

[00:13:37] The other thing that you can do, which we are still testing and we are planning to embrace very soon,

[00:13:43] is offer click and collect of the marketplace products into the stores.

[00:13:46] And that suddenly starts creating a proper omnichannel experience where customers can have access to this universe of, as you say, endless products,

[00:13:56] but at the same time have a very real experience in which they can go into a store and to pick up that product.

[00:14:02] Or you can also be navigating physically in the store trying to find the right product.

[00:14:07] And your colleagues there, they might advise you online through a tab, through a tablet,

[00:14:12] where perhaps the best product you can buy is this one that we have online,

[00:14:16] and you buy it here and you're picking up in a couple of days into the store.

[00:14:19] So I think this is just the very beginning for many people,

[00:14:24] experimenting how you can bring together these online marketplaces with the store experience.

[00:14:32] And the fact that we have done that from the very beginning quite well,

[00:14:36] I think it got really strong adoption from the consumers quite fast.

[00:14:40] And if you think about that situation, it's very hard to compete against that if you are a pure player,

[00:14:45] because it is way easier for B&Q or Castorama to replicate the online capabilities that pure players have,

[00:14:53] that for any online pure player to suddenly build a network of thousands of stores

[00:14:59] and a strong trust that consumers have over more than 40 and 50 years of buying into these brands.

[00:15:07] And I think that we have catch well this third wave,

[00:15:12] and we represent the new generation of these marketplaces.

[00:15:15] As you can see also, Walmart, who is doing that very well in the U.S.,

[00:15:21] which, of course, not that verticalized as we do it,

[00:15:25] which combine very well these two competing against the pure players.

[00:15:29] And we're still learning.

[00:15:30] We're at the very beginning of the curve on that one.

[00:15:33] Yeah, it's so interesting to hear what you're saying.

[00:15:36] And I think you're absolutely right.

[00:15:37] Customers, they just expect to be able to return an item in store.

[00:15:42] They don't see a distinction between first-party brands and third-party brands.

[00:15:45] So really interesting what you're doing there.

[00:15:48] Now, I'd like to explore the role of stores in a little bit more detail,

[00:15:53] because you've just touched on how they're supporting marketplaces through click and collect

[00:15:57] and by accepting returns.

[00:15:59] And something I've said for a while now, and it sounds counterintuitive,

[00:16:02] but I really believe that the future of e-commerce is stores

[00:16:05] and that the physical store plays a huge role in helping retailers to achieve their e-commerce goals,

[00:16:11] both in that the store is a form of media,

[00:16:15] and shoppers might come into the store and then go buy online,

[00:16:18] and there's the whole halo effect,

[00:16:19] and we'll come on to retail media in a little bit as well.

[00:16:23] But also, as you've just touched on,

[00:16:25] how stores have become micro-fulfillment hubs in this digital era.

[00:16:30] So what are you doing at Kingfisher to meet customers' needs here?

[00:16:35] Absolutely.

[00:16:35] And you are very right that the stores are a key pillar of the e-commerce and digital strategic success at Kingfisher.

[00:16:46] So in many different dimensions, but going straight into your specific point,

[00:16:53] today, 93% of the orders that are bought online at Kingfisher Group are actually fulfilled by the stores.

[00:17:01] So the stores have become, by the facto, our fulfillment centers.

[00:17:08] And logically, because the stores have very strong capillarity across our geographies,

[00:17:13] this allows us to be much closer to our consumers.

[00:17:17] At the same time, we are already using the stores to stock the product that the consumers want to buy into the stores.

[00:17:23] Therefore, expanding the usage of the storage of the products for also the orders that are purchased online

[00:17:31] is not that a big leap somehow.

[00:17:34] So in a way, you are able to be closer to the consumer,

[00:17:38] get a more holistic experience for them in terms of what happened online and what happened into the store,

[00:17:44] and at the same time, makes it very effective from a cost perspective,

[00:17:47] because in a way, you need to use this space to store products for your own consumers.

[00:17:51] And this has been one of the key pillars of the power by Kingfisher strategy at operational level,

[00:18:00] and something that we have made a lot of progress over the last five years.

[00:18:04] And I think it has been one of the key elements of success of not only our efficiency,

[00:18:10] but also on the customer experience for sure.

[00:18:14] Then there are many other elements in how stores play a big role from an e-commerce perspective.

[00:18:19] As you say, they are our first branding.

[00:18:22] They are the first way that you position yourself into the market.

[00:18:27] While, again, only peer players have to spend a lot of money into the Googles

[00:18:32] and the methods of this world to be known, the stores do that work for us.

[00:18:38] And sometimes when you look at the store and you look at the store from a P&L perspective,

[00:18:42] it's hard to take that into account,

[00:18:45] but you need to consider the marketing that they are actually doing for you,

[00:18:49] and that marketing is money that you are saving from somewhere else.

[00:18:53] And in fact, the other way around,

[00:18:56] we are starting, all the omni-channel players are starting to become quite more effective

[00:19:01] at measuring the impact that this has through the Vopo effect,

[00:19:05] the people that make the research online and buy offline.

[00:19:09] And we have endless paths that consumers take.

[00:19:12] People who make the search online and they go to the store,

[00:19:16] and perhaps sometimes they go to the store,

[00:19:18] they look at what they want and they end up buying it with the app in the same store,

[00:19:23] or they end up buying it with the tablet when they are back home,

[00:19:26] or the other way around.

[00:19:29] So from a consumer perspective,

[00:19:31] the fact that we are mixing the logistics all into the same location with the stores,

[00:19:36] but at the same time that you are using them as another media channel,

[00:19:39] it helps us to create a lot of efficiencies.

[00:19:42] And it just makes a lot of sense.

[00:19:46] And in a way, I see it as the future of a proper omni-channel experience for consumers.

[00:19:56] It's not only what you face to the consumer,

[00:19:59] it's also how you manage your fulfillment,

[00:20:00] it's the offer of the clients, it's the pricing,

[00:20:04] everything combined into one single channel experience.

[00:20:07] Yeah.

[00:20:07] And recognizing, as you say, that that path to purchase is no longer linear.

[00:20:11] And today, there are so many touch points.

[00:20:14] So some shoppers might want to come in, research, as you say,

[00:20:18] or speak to a member of staff and then buy online,

[00:20:20] or someone might buy online and want to collect in store.

[00:20:22] And I can imagine as a retailer, it just must be so complex

[00:20:26] trying to meet the customers who just want to shop the way that they want to shop.

[00:20:31] So I don't envy you, I guess is the point.

[00:20:34] But I want to talk about your collaboration with Deliveroo

[00:20:38] and pick up on your point about getting closer to the consumer.

[00:20:43] I remember when this was first announced, I thought it was really innovative,

[00:20:47] just generally how Deliveroo is moving into non-food.

[00:20:49] And I thought particularly for DIY and also for gifting,

[00:20:52] I can totally see the use case.

[00:20:54] And I had Paul Wilkinson from Deliveroo on the podcast earlier this year.

[00:20:59] And he talked about this from Deliveroo's perspective

[00:21:02] and how their aim is to bring the high street to the customer, as he put it.

[00:21:07] So I'd love to get your take on this collaboration

[00:21:10] and just more generally how speed is important to your customers.

[00:21:16] Because I know for, I think it was even before Deliveroo,

[00:21:20] Screwfix was doing one hour click and collect,

[00:21:22] which again, having that store level visibility,

[00:21:26] that is the kind of holy grail, isn't it?

[00:21:29] So just maybe some words around the inspiration behind it

[00:21:33] and whether you feel that it's helping to differentiate from your competitors.

[00:21:36] I would say that everything we do, at the end of the day,

[00:21:40] we do it out of the perspective of choice, speed and convenience.

[00:21:45] And this is a great example about how we find something

[00:21:48] that we believe is worth testing based on focusing on speed and convenience

[00:21:51] because we constantly see why and how consumers demand and expect that from us.

[00:21:57] So when you think about the partnership with Deliveroo,

[00:22:00] it's just one additional channel that we have been using and testing

[00:22:06] in order to get closer to the consumers for the last mile.

[00:22:09] The same way that we launched Screwfix Sprint,

[00:22:13] where as you were saying,

[00:22:14] consumers can ask within 60 minutes to get something at home with a rider,

[00:22:18] or the same way we have been partnering up with Pudos

[00:22:21] in order to deliver our packages even closer to our consumers,

[00:22:26] either into pickup points, into lockers.

[00:22:28] So for us, Deliveroo is that partnership is about accessing a new channel

[00:22:34] in order to offer additional convenience and speed in our service

[00:22:40] because constantly we see that consumers expect that.

[00:22:43] They expect that based on their experiences that they have in many other players.

[00:22:47] They expect that based on what they have seen that, of course,

[00:22:53] Amazon, for example, got used to in everyone into the market.

[00:22:58] And the advantage we have is that the capillarity of our stores

[00:23:03] and how close they are to the consumers,

[00:23:06] but also to any warehouse solution that anyone may have

[00:23:09] in whatever this is a rider or directly deliverable,

[00:23:12] it allows us to make that connection quite quickly

[00:23:15] and bring these products at the right time,

[00:23:18] at the right place, very quickly.

[00:23:21] Mark, let's talk about the golden quarter

[00:23:23] because we're now in peak trading period

[00:23:26] and Black Friday, you know, it's no longer a one-day event, right?

[00:23:31] It's, we've been calling it Black November for a while.

[00:23:34] And you know what?

[00:23:35] I noticed this year it started earlier than ever before.

[00:23:38] On Halloween, Boots, John Lewis and Curry's

[00:23:41] were all pushing Black Friday.

[00:23:42] So here we are today, it's November 7th, we're recording,

[00:23:46] and I noticed that B&Q has joined the Black Friday party.

[00:23:49] How important is Black Friday to the home improvement sector?

[00:23:52] And how important is it to B&Q?

[00:23:54] It is important, it is growing,

[00:23:56] and it is fluctuating and changing a lot over the last year.

[00:24:00] So I remember Black Friday starting,

[00:24:03] I started to work for Black Friday in other industries

[00:24:05] a little like around seven, eight years ago

[00:24:10] when Black Friday was a thing that pure players used to focus on,

[00:24:14] or especially on high tech and electronics.

[00:24:17] And it was really like a weekend.

[00:24:19] But I remember that even at the time for that weekend,

[00:24:22] you could do 20% of the total yearly sales

[00:24:26] in that single period.

[00:24:28] Over the years, what just happened,

[00:24:31] what we have seen is that first,

[00:24:34] the period got expanded.

[00:24:36] So it's not anymore Black Friday or even Black November.

[00:24:39] It's somehow, it feels like a bridge

[00:24:41] between where we are and Christmas.

[00:24:43] In our case, as you say, this year,

[00:24:45] we are already starting progressively

[00:24:46] to open up the different offers for the Black Friday.

[00:24:50] And what we have seen over the years

[00:24:52] is that it has become more and more important

[00:24:54] in our industry.

[00:24:55] Because I think that if you go back four or five years ago,

[00:24:58] it wasn't part of more specialist retailers, I would say.

[00:25:02] The other thing that just has changed a lot for us

[00:25:04] is the opening of the marketplace.

[00:25:07] The opening of the marketplace

[00:25:08] and now suddenly having access to millions of products

[00:25:12] from thousands of sellers

[00:25:13] who are used to operate through Black Friday,

[00:25:16] they are the ones coming to us

[00:25:19] and actually asking us to offer the possibility

[00:25:23] to celebrate the Black Friday

[00:25:24] and be way more aggressive

[00:25:25] because they are willing to come with offers.

[00:25:27] So in the past,

[00:25:29] you could have a Black Friday operation

[00:25:30] where you would offer 500 SKUs

[00:25:32] at the discount rate to beat the market.

[00:25:36] Now, you may have hundreds of thousands of SKUs

[00:25:40] that allow you to go to the market

[00:25:41] to be heavily, heavily competitive.

[00:25:44] So what we see is longer times,

[00:25:47] we see more aggressivity

[00:25:48] and more people expecting it

[00:25:49] in every single one of the different categories.

[00:25:51] And for sure, for us, it's an important period of the time

[00:25:54] and every year is getting more important, I would say.

[00:25:56] Mark, I want to move on now to talk about retail media.

[00:25:59] I presume that if you have a third-party marketplace,

[00:26:03] then this is a natural next step

[00:26:05] as a way to monetize that platform

[00:26:07] and bring in alternative revenue streams.

[00:26:10] But also, I guess, from a customer point of view,

[00:26:12] to offer more personalization,

[00:26:14] more relevance for the customer.

[00:26:15] So can you tell us a little bit about the work

[00:26:18] that you're doing at Kingfisher

[00:26:20] in regards to retail media

[00:26:21] and how you're differentiating

[00:26:23] from your competitors in this space?

[00:26:24] So I would say that for us,

[00:26:26] the retail media journey,

[00:26:27] simplifying it a lot,

[00:26:28] it started around 18 months ago.

[00:26:31] So that's when we started to develop

[00:26:33] our own capabilities in terms of this area

[00:26:35] where, just to simplify a lot,

[00:26:37] what we do is to expose our traffic impressions

[00:26:39] impressions and customer to sellers

[00:26:43] who want to position themselves in order to be seen.

[00:26:46] So we sell advertisement.

[00:26:48] So what we have seen about retail media

[00:26:51] and what I'm very excited about

[00:26:53] is that retail media creates two effects.

[00:26:57] So number one, obviously, it improves revenues.

[00:27:01] It makes margins stronger for obvious reasons.

[00:27:04] The second thing that is more exciting

[00:27:08] and that one I didn't expect it

[00:27:09] is that retail media, well done,

[00:27:11] it actually improves conversion.

[00:27:14] Because as you were well saying,

[00:27:16] when you connect retail media to a marketplace,

[00:27:18] a marketplace creates competition.

[00:27:23] But when there is competition,

[00:27:24] you want to create the right tools.

[00:27:26] You want to bring the right tools to the sellers

[00:27:27] for them to be able to compete

[00:27:28] to offer the best proposition to the consumers.

[00:27:32] So sellers are fully aware

[00:27:34] that retail media gives them a chance

[00:27:37] for them to get better visibility.

[00:27:40] But because what we offer is based in performance,

[00:27:43] it's not only about how much

[00:27:44] they are going to be willing to pay.

[00:27:46] It's about how good the offer is,

[00:27:48] how fast they're going to ship,

[00:27:50] how good is the description

[00:27:51] and the number of images

[00:27:53] and the quality of the images they put.

[00:27:55] So for them to be more effective,

[00:27:57] for them to have better rewards

[00:27:59] on the money they invest into retail media,

[00:28:01] they just need to be better.

[00:28:03] That creates more competition.

[00:28:05] And that competition,

[00:28:06] at the end of the day,

[00:28:08] it benefits consumers.

[00:28:09] So the beauty of that retail media proposition

[00:28:13] that I'm discovering

[00:28:14] is that it's not only something

[00:28:16] that impacts our margin,

[00:28:17] but it also impacts the consumer experience

[00:28:19] if you do it right.

[00:28:21] What I think we have done very well

[00:28:23] is that very quickly,

[00:28:26] we have integrated,

[00:28:27] we partnered up with a market leader

[00:28:28] in retail media capabilities,

[00:28:31] which is Citrus Ads,

[00:28:32] that allows us to take a lot of learning from them.

[00:28:34] And we quickly opened that possibility

[00:28:36] to first-party vendors,

[00:28:38] but at the same time,

[00:28:39] also third-party marketplace.

[00:28:40] And because we were quite effectively

[00:28:42] building the marketplace a couple of years ago,

[00:28:44] today we have thousands of mature sellers

[00:28:47] with a lot of appetite to come in,

[00:28:49] to invest into the retail media.

[00:28:51] So it's good for the sellers

[00:28:52] because we give them another tool

[00:28:54] for them to improve their performance.

[00:28:56] It's good for us

[00:28:57] because obviously we are improving our margins.

[00:28:59] And it's good for consumers

[00:29:01] because we create this competition

[00:29:02] that at the end it takes them

[00:29:03] to a better reposition.

[00:29:05] Looking at the possibilities

[00:29:06] of where this can go

[00:29:07] and how much this is going into the market,

[00:29:10] I think we are just at the very beginning

[00:29:11] of the maturity in retail media,

[00:29:14] not only for us,

[00:29:15] which we have done a good progress,

[00:29:16] but in general into the market.

[00:29:18] In fact, we believe that

[00:29:20] over the long term,

[00:29:22] retail media will represent a few percent

[00:29:24] of the total revenue

[00:29:26] that we create across the digital channels.

[00:29:28] And that's clearly a very good ambition to have.

[00:29:32] Yeah.

[00:29:33] So how do you see this evolving in the future?

[00:29:35] Do you think we'll see more retail media

[00:29:37] in our stores with things like digital screens,

[00:29:40] for example?

[00:29:43] I think that there are three stages

[00:29:44] into a proper retail media implementation.

[00:29:46] And everyone is kind of following

[00:29:49] very similar paths, I would say.

[00:29:52] So the first thing you can do

[00:29:54] is activate your own traffic,

[00:29:58] your own consumers,

[00:29:59] your own impressions

[00:30:00] that you have across your own online channels,

[00:30:03] your website and your mobile app

[00:30:05] to offer advertisement.

[00:30:08] We have around 1 billion yearly visits

[00:30:13] across the entire group.

[00:30:14] So that's quite a lot of people

[00:30:15] which is interested to buy these products.

[00:30:18] And therefore,

[00:30:18] that allow us to offer

[00:30:20] a good distribution,

[00:30:22] but at the same time,

[00:30:23] very good draws

[00:30:23] toward consumers.

[00:30:26] We are right now

[00:30:27] offering an average

[00:30:30] of between 600 and 700 draws

[00:30:32] on all the investment

[00:30:33] that third parties and suppliers

[00:30:36] get when they invest

[00:30:37] into retail media

[00:30:38] for different brands.

[00:30:40] What normally you will expect

[00:30:41] will happen later

[00:30:42] is that we will co-partner up

[00:30:45] in order to do co-advertisement

[00:30:47] into external channels,

[00:30:49] so off-site advertisement.

[00:30:50] What this means is that

[00:30:53] you and a third party,

[00:30:55] and so one of our brands

[00:30:57] and one of third parties

[00:30:58] that sell into our marketplace

[00:30:59] or first-party brands,

[00:31:00] we partner up together

[00:31:02] to do advertisement

[00:31:03] into external channels

[00:31:04] still digital,

[00:31:05] which is Google,

[00:31:07] Meta, etc.

[00:31:10] Because connecting the two brands

[00:31:12] and together

[00:31:12] into one single advertisement proposition,

[00:31:15] it delivers better rewards

[00:31:16] that I view it by separated.

[00:31:18] So this is the second stage

[00:31:19] where we will go

[00:31:20] and we are actually starting

[00:31:21] to test in some of the brands

[00:31:23] on that approach.

[00:31:23] The third stage,

[00:31:25] which is kind of natural,

[00:31:26] but it requires,

[00:31:28] I would say,

[00:31:29] heavier technology

[00:31:30] and investment

[00:31:32] is when you do that

[00:31:33] directly connected

[00:31:34] to the stores.

[00:31:35] Whatever this is,

[00:31:36] digital displays,

[00:31:38] like TVs,

[00:31:39] screens, etc.,

[00:31:40] or this is physical presence

[00:31:43] into the store,

[00:31:44] into a specific corner,

[00:31:45] etc.

[00:31:46] So this is,

[00:31:47] for me,

[00:31:47] the ultimate goal.

[00:31:49] Something that we are starting

[00:31:50] to test,

[00:31:50] but we still need

[00:31:51] to go a little beyond

[00:31:52] on the possibilities

[00:31:54] because at the end of the day,

[00:31:55] if you want to offer

[00:31:56] a proper omnichannel experience,

[00:31:57] it also needs to be

[00:31:58] omnichannel

[00:31:59] from a retail media perspective.

[00:32:01] So for sure,

[00:32:02] next year,

[00:32:03] we will be starting

[00:32:05] to test

[00:32:05] the three ways

[00:32:06] to operate

[00:32:06] across retail media.

[00:32:08] Perhaps

[00:32:10] there is a four element.

[00:32:12] It's something

[00:32:12] that you can do

[00:32:13] at any of the stages

[00:32:14] in terms of maturity,

[00:32:15] which is

[00:32:16] powering

[00:32:17] and activating

[00:32:18] your customer data

[00:32:20] through CRM

[00:32:21] to also target

[00:32:23] consumers

[00:32:23] for specific offers

[00:32:25] in a personalized manner.

[00:32:26] So we have invest

[00:32:28] a lot

[00:32:28] into personalization

[00:32:29] and into customization

[00:32:31] of what the consumers see.

[00:32:32] If we connect that

[00:32:34] with retail media

[00:32:34] through email,

[00:32:36] WhatsApp,

[00:32:37] whatever channel

[00:32:38] you can reach

[00:32:38] to consumers

[00:32:39] and you have

[00:32:40] through CRM,

[00:32:41] then it's when

[00:32:42] you can target

[00:32:43] advertisement

[00:32:43] through email marketing

[00:32:45] and create

[00:32:47] another source

[00:32:47] of revenue

[00:32:48] and another

[00:32:48] good,

[00:32:48] pleasant experience

[00:32:49] for the consumers

[00:32:50] if you do it right.

[00:32:51] So interesting

[00:32:52] and it's moving

[00:32:53] so quickly as well.

[00:32:54] So really interesting

[00:32:56] to hear your thoughts

[00:32:57] on that.

[00:32:58] I have two more questions

[00:32:59] I'd like to ask you.

[00:33:00] One is about AI.

[00:33:02] As group digital director,

[00:33:04] I can't let you get away

[00:33:05] without getting

[00:33:05] your thoughts on AI.

[00:33:07] And then I want to wrap up

[00:33:08] with a quick question

[00:33:09] on the future of retail

[00:33:10] and where you see it going.

[00:33:11] So I've given you

[00:33:12] a little bit of notice

[00:33:13] there, Mark.

[00:33:15] Every day it feels

[00:33:16] like we're discovering

[00:33:16] new use cases

[00:33:18] for AI.

[00:33:20] And I think it's

[00:33:21] going to radically

[00:33:22] improve the customer

[00:33:23] experience,

[00:33:24] but it's also going

[00:33:24] to radically drive

[00:33:25] operational efficiencies

[00:33:27] for retailers

[00:33:27] and we're seeing

[00:33:28] that already.

[00:33:29] So how are you

[00:33:30] using AI

[00:33:31] at Kingfisher

[00:33:32] and where do you

[00:33:33] see the big opportunities

[00:33:34] for retail?

[00:33:36] It's important

[00:33:37] to clarify

[00:33:37] what we stand for

[00:33:38] in terms of AI

[00:33:39] because people used

[00:33:40] to connect AI

[00:33:40] with general data

[00:33:42] and then there is

[00:33:43] one thing which is AI

[00:33:44] and gen AI,

[00:33:45] et cetera, et cetera.

[00:33:46] So we have been working

[00:33:49] in order to

[00:33:50] utilize our

[00:33:52] data capabilities

[00:33:53] for a long period

[00:33:54] of time now.

[00:33:55] And that means

[00:33:57] that since

[00:33:57] a few years ago

[00:33:58] we invested

[00:33:59] to build

[00:34:00] our own

[00:34:01] internal data platform

[00:34:03] which we call

[00:34:03] Nucleus.

[00:34:05] And that took

[00:34:06] quite a long time

[00:34:07] and we are still

[00:34:08] going through.

[00:34:08] in order to

[00:34:10] identify

[00:34:10] all the key

[00:34:11] data sources,

[00:34:12] connect them

[00:34:13] all together

[00:34:13] and bring the data

[00:34:15] in a manner

[00:34:15] that it can be

[00:34:16] comparable,

[00:34:17] measure

[00:34:17] and utilize.

[00:34:20] That

[00:34:21] is the most

[00:34:22] important piece

[00:34:22] of work

[00:34:23] that we have done

[00:34:23] because if you

[00:34:24] don't have that

[00:34:25] you can do

[00:34:26] nothing with AI.

[00:34:26] You can do

[00:34:27] nothing with

[00:34:27] anything else

[00:34:28] connected to data.

[00:34:30] So for a long

[00:34:30] period of time

[00:34:31] we did focus

[00:34:32] into building

[00:34:33] these foundations.

[00:34:34] use.

[00:34:35] That

[00:34:35] more recently

[00:34:36] has allowed

[00:34:37] us

[00:34:37] to now

[00:34:38] starting to

[00:34:39] activate

[00:34:40] this data

[00:34:40] for a lot

[00:34:41] of different

[00:34:41] business

[00:34:42] purposes.

[00:34:42] And one

[00:34:43] of them

[00:34:43] is of course

[00:34:44] to start

[00:34:44] testing into

[00:34:45] AI capabilities

[00:34:46] more specifically.

[00:34:47] Of course

[00:34:48] we are

[00:34:50] as excited

[00:34:51] as everyone

[00:34:51] else about

[00:34:52] the AI

[00:34:52] capabilities.

[00:34:53] But at the

[00:34:54] same time

[00:34:55] AI is one

[00:34:56] of those

[00:34:56] things where

[00:34:57] you can

[00:34:57] easily try

[00:34:57] to buoy

[00:34:58] the ocean

[00:35:00] by shooting

[00:35:01] at everything

[00:35:02] that moves.

[00:35:03] So what

[00:35:03] we decided

[00:35:04] to do

[00:35:05] last year

[00:35:06] is to create

[00:35:07] a very single

[00:35:08] framework in

[00:35:08] which we

[00:35:09] want to test

[00:35:09] AI and

[00:35:10] we need

[00:35:11] to be very

[00:35:11] humble because

[00:35:12] it's still

[00:35:12] a test and

[00:35:13] learn approach

[00:35:14] where we

[00:35:15] need to

[00:35:15] discover

[00:35:15] what are

[00:35:16] the big

[00:35:17] benefits.

[00:35:18] We need

[00:35:18] to discover

[00:35:19] what are

[00:35:20] the big

[00:35:21] use cases

[00:35:21] because it's

[00:35:23] so easy

[00:35:23] to define

[00:35:24] 3,000

[00:35:25] use cases

[00:35:26] where you

[00:35:27] will implement

[00:35:27] AI but

[00:35:28] you need

[00:35:28] to prioritize

[00:35:28] and you

[00:35:29] need to

[00:35:30] decide

[00:35:30] where you're

[00:35:31] going to

[00:35:31] target

[00:35:31] first.

[00:35:32] So what

[00:35:33] we did

[00:35:33] first is

[00:35:34] to select

[00:35:34] three key

[00:35:35] themes that

[00:35:36] for us

[00:35:37] would be

[00:35:37] important in

[00:35:37] order to

[00:35:38] focus on

[00:35:38] effort.

[00:35:39] One is

[00:35:40] everything about

[00:35:41] internal

[00:35:41] productivity

[00:35:42] gains,

[00:35:43] where we

[00:35:43] can see

[00:35:43] internal

[00:35:44] productivity

[00:35:44] gains,

[00:35:45] and I

[00:35:45] know they

[00:35:45] are very

[00:35:46] general

[00:35:46] terms but

[00:35:46] they help

[00:35:47] us a lot.

[00:35:48] Second,

[00:35:50] where we

[00:35:50] can see

[00:35:51] dramatic

[00:35:52] improvement

[00:35:52] in terms

[00:35:53] of sales

[00:35:53] growth,

[00:35:54] and three,

[00:35:55] where we

[00:35:56] can see

[00:35:58] effective

[00:35:58] improvement

[00:35:59] into our

[00:36:00] margin.

[00:36:01] Out of

[00:36:02] that,

[00:36:03] what we

[00:36:03] started to

[00:36:03] do is

[00:36:04] to start

[00:36:05] testing and

[00:36:05] learning into

[00:36:06] different

[00:36:06] capabilities.

[00:36:07] So I can

[00:36:09] say that

[00:36:09] today after

[00:36:10] a lot of

[00:36:10] tests,

[00:36:11] learn,

[00:36:11] and different

[00:36:12] capabilities

[00:36:12] development

[00:36:13] that we

[00:36:14] have gone

[00:36:14] through,

[00:36:15] we found

[00:36:16] really good

[00:36:16] best practices

[00:36:17] that we

[00:36:18] are ready

[00:36:18] to invest

[00:36:20] and to

[00:36:20] scale.

[00:36:21] First of

[00:36:22] all,

[00:36:23] we have

[00:36:25] used and

[00:36:25] we are

[00:36:25] using AI

[00:36:26] for chat

[00:36:27] bots in

[00:36:27] terms of

[00:36:28] having a

[00:36:28] direct

[00:36:28] conversation

[00:36:29] with our

[00:36:29] consumers to

[00:36:30] help them

[00:36:30] make decisions

[00:36:31] about their

[00:36:32] shopping experience.

[00:36:33] We launched

[00:36:34] HelloCasto a

[00:36:35] few months

[00:36:36] ago.

[00:36:37] HelloCasto is

[00:36:37] a chat bot

[00:36:38] in Castodama

[00:36:39] where consumers

[00:36:41] can have a

[00:36:42] very normal

[00:36:42] conversation

[00:36:43] where they

[00:36:43] can try to

[00:36:44] identify

[00:36:45] products that

[00:36:46] they don't

[00:36:46] know the name

[00:36:47] or they

[00:36:48] can try to

[00:36:48] identify how

[00:36:49] to fix a

[00:36:50] specific problem

[00:36:50] such as I

[00:36:51] want to paint

[00:36:52] a ball and

[00:36:52] I really don't

[00:36:53] know what

[00:36:53] the steps I

[00:36:54] need to

[00:36:54] follow or

[00:36:55] you need

[00:36:56] the product

[00:36:56] that compares

[00:36:57] to another

[00:36:57] product or

[00:36:58] you need

[00:36:58] to know how

[00:36:59] two things

[00:36:59] work together.

[00:37:00] So you

[00:37:01] can now

[00:37:01] combine these

[00:37:02] things to have

[00:37:03] a very natural

[00:37:04] conversation with

[00:37:04] that system

[00:37:05] that takes

[00:37:05] you through

[00:37:06] the process

[00:37:06] to understanding

[00:37:07] what service

[00:37:08] and product

[00:37:09] you need to

[00:37:09] buy in a

[00:37:11] way that you

[00:37:12] really feel

[00:37:12] that someone

[00:37:13] is actually

[00:37:13] supporting you.

[00:37:15] There what

[00:37:15] we have seen

[00:37:16] is you

[00:37:17] a huge

[00:37:17] adoption

[00:37:17] by consumers

[00:37:18] we're still

[00:37:19] even if we

[00:37:20] launched it

[00:37:21] six months

[00:37:21] ago we're

[00:37:22] still testing

[00:37:23] and learning

[00:37:23] but we are

[00:37:24] having more

[00:37:24] than 100,000

[00:37:25] consumer

[00:37:26] conversations

[00:37:26] every month

[00:37:27] with that

[00:37:28] system and

[00:37:28] we see a

[00:37:29] clear impact

[00:37:29] in terms of

[00:37:30] customer

[00:37:30] lifetime value

[00:37:31] conversion rate

[00:37:33] etc.

[00:37:34] The other

[00:37:35] area where

[00:37:36] we have seen

[00:37:37] a huge

[00:37:37] impact is

[00:37:38] about

[00:37:39] customer

[00:37:39] personalization.

[00:37:41] So we

[00:37:42] started developing

[00:37:43] our own

[00:37:44] internal

[00:37:45] algorithms

[00:37:46] for

[00:37:47] consumer

[00:37:47] recommendations

[00:37:48] and

[00:37:48] personalization

[00:37:49] and they

[00:37:50] can go

[00:37:50] into

[00:37:50] multiple

[00:37:51] directions.

[00:37:51] It can be

[00:37:52] about

[00:37:52] frequently

[00:37:53] products

[00:37:54] both

[00:37:54] together

[00:37:54] when you're

[00:37:55] trying to

[00:37:55] buy

[00:37:56] something

[00:37:56] and what

[00:37:56] do you

[00:37:57] recommend

[00:37:57] customers

[00:37:57] to buy

[00:37:58] to

[00:37:58] in terms

[00:37:59] of what

[00:38:00] you would

[00:38:00] buy

[00:38:00] next

[00:38:01] so you

[00:38:01] make a

[00:38:01] prediction

[00:38:02] about what

[00:38:02] the

[00:38:02] consumer

[00:38:03] would buy

[00:38:03] next

[00:38:03] based on

[00:38:04] their

[00:38:04] behavior

[00:38:04] so you

[00:38:16] is that

[00:38:17] the

[00:38:17] conversion

[00:38:18] of these

[00:38:18] systems

[00:38:19] compared to

[00:38:20] legacy

[00:38:20] capabilities

[00:38:21] that we

[00:38:21] had before

[00:38:21] from third

[00:38:22] parties

[00:38:22] have

[00:38:23] doubled

[00:38:23] the

[00:38:25] conversion

[00:38:25] rate

[00:38:25] so the

[00:38:26] benefit

[00:38:27] it

[00:38:27] has

[00:38:27] been

[00:38:28] huge

[00:38:28] because

[00:38:28] we're

[00:38:29] not only

[00:38:30] saving

[00:38:30] money

[00:38:30] from using

[00:38:31] third

[00:38:31] party

[00:38:31] capabilities

[00:38:32] but with

[00:38:33] a kind

[00:38:34] of a

[00:38:34] moderate

[00:38:34] amount

[00:38:35] of

[00:38:36] resources

[00:38:36] we are

[00:38:37] able to

[00:38:37] create

[00:38:38] significantly

[00:38:38] amount

[00:38:39] of

[00:38:39] cells

[00:38:39] in the

[00:38:40] last

[00:38:40] six

[00:38:40] months

[00:38:40] we got

[00:38:41] more than

[00:38:41] 60 million

[00:38:42] cells

[00:38:42] generated

[00:38:43] just by

[00:38:44] these

[00:38:44] recommendation

[00:38:45] engines

[00:38:46] for

[00:38:47] internal

[00:38:47] capabilities

[00:38:48] there are

[00:38:48] a lot

[00:38:49] of

[00:38:49] sometimes

[00:38:50] small

[00:38:50] practices

[00:38:51] that

[00:38:51] have

[00:38:51] a

[00:38:51] huge

[00:38:52] impact

[00:38:52] so for

[00:38:52] example

[00:38:53] we

[00:38:54] recently

[00:38:54] launched

[00:38:56] and

[00:38:56] developed

[00:38:56] compliance

[00:38:57] agent

[00:38:57] so

[00:38:59] in the

[00:38:59] past

[00:39:00] and still

[00:39:00] today

[00:39:01] because we're

[00:39:01] in the

[00:39:01] process

[00:39:01] to run

[00:39:02] it

[00:39:02] out

[00:39:03] as a

[00:39:04] major

[00:39:04] listed

[00:39:04] company

[00:39:05] there's

[00:39:05] a lot

[00:39:05] of

[00:39:05] compliance

[00:39:06] to

[00:39:06] follow

[00:39:07] up

[00:39:07] by

[00:39:07] all

[00:39:08] team

[00:39:08] colleagues

[00:39:09] and

[00:39:10] these

[00:39:10] team

[00:39:10] colleagues

[00:39:10] constantly

[00:39:11] have

[00:39:11] questions

[00:39:12] doubts

[00:39:13] things

[00:39:13] that

[00:39:13] they

[00:39:14] want to

[00:39:14] know

[00:39:14] better

[00:39:16] and

[00:39:16] they

[00:39:16] go to

[00:39:17] compliance

[00:39:17] team

[00:39:18] and they

[00:39:18] ask

[00:39:18] about

[00:39:18] this

[00:39:19] what

[00:39:19] is

[00:39:19] the

[00:39:19] policy

[00:39:19] for

[00:39:20] this

[00:39:20] what

[00:39:20] do

[00:39:20] we

[00:39:20] do

[00:39:20] for

[00:39:21] that

[00:39:21] and

[00:39:22] there

[00:39:22] is

[00:39:22] hundreds

[00:39:23] of

[00:39:23] thousands

[00:39:24] of

[00:39:24] pages

[00:39:24] of

[00:39:34] data

[00:39:34] in

[00:39:35] an

[00:39:35] internal

[00:39:35] chat

[00:39:37] bot

[00:39:37] and

[00:39:38] we

[00:39:38] roll

[00:39:39] out

[00:39:39] this

[00:39:39] tool

[00:39:40] to

[00:39:41] what

[00:39:41] we're

[00:39:42] doing

[00:39:42] right

[00:39:42] now

[00:39:42] to

[00:39:43] our

[00:39:43] colleagues

[00:39:43] for

[00:39:44] them

[00:39:44] to

[00:39:44] be

[00:39:44] able

[00:39:44] to

[00:39:45] ask

[00:39:45] that

[00:39:45] directly

[00:39:45] to

[00:39:46] an

[00:39:46] Asian

[00:39:47] to

[00:39:48] get

[00:39:49] an

[00:39:49] immediate

[00:39:49] response

[00:39:50] what

[00:39:51] pretty much

[00:39:51] you get

[00:39:52] is that

[00:39:52] suddenly

[00:39:53] a bunch

[00:39:54] of

[00:39:54] a lot

[00:39:54] of

[00:39:54] people

[00:39:54] in

[00:39:55] compliance

[00:39:56] who

[00:39:57] needed

[00:39:57] to

[00:39:58] dedicate

[00:39:58] a lot

[00:39:58] of

[00:39:58] time

[00:39:59] into

[00:39:59] answering

[00:40:00] manual

[00:40:00] questions

[00:40:01] from

[00:40:01] colleagues

[00:40:04] to

[00:40:04] dedicate

[00:40:04] to

[00:40:05] more

[00:40:05] to

[00:40:06] calculate

[00:40:08] the

[00:40:09] return

[00:40:10] of

[00:40:11] building

[00:40:12] a

[00:40:12] capability

[00:40:12] like

[00:40:13] this

[00:40:14] just

[00:40:14] to

[00:40:14] give

[00:40:15] you

[00:40:15] another

[00:40:15] example

[00:40:15] one

[00:40:17] of

[00:40:17] the

[00:40:18] tools

[00:40:19] that

[00:40:19] we

[00:40:19] are

[00:40:19] very

[00:40:19] proud

[00:40:20] that

[00:40:20] we

[00:40:20] are

[00:40:20] testing

[00:40:20] is

[00:40:21] what

[00:40:21] we

[00:40:21] call

[00:40:21] LEMS

[00:40:22] which

[00:40:22] is

[00:40:22] our

[00:40:22] visual

[00:40:22] search

[00:40:23] engine

[00:40:23] we

[00:40:24] built

[00:40:24] the

[00:40:24] visual

[00:40:25] search

[00:40:25] engine

[00:40:25] in

[00:40:26] collaboration

[00:40:27] with

[00:40:27] Google

[00:40:28] which

[00:40:29] allows

[00:40:29] anyone

[00:40:30] through

[00:40:30] our

[00:40:31] app

[00:40:32] to

[00:40:32] scan

[00:40:34] the

[00:40:34] app

[00:40:34] camera

[00:40:35] and

[00:40:36] automatically

[00:40:36] identify

[00:40:37] what

[00:40:37] product

[00:40:38] is

[00:40:38] this

[00:40:38] into

[00:40:39] our

[00:40:39] catalog

[00:40:40] and

[00:40:40] what

[00:40:41] other

[00:40:41] similar

[00:40:41] products

[00:40:42] we

[00:40:42] may

[00:40:42] have

[00:40:43] and

[00:40:45] that's

[00:40:45] actually

[00:40:45] very

[00:40:46] cool

[00:40:46] and it

[00:40:46] works

[00:40:46] very well

[00:40:47] we tested

[00:40:47] it in

[00:40:48] 11 stores

[00:40:49] just with

[00:40:49] our

[00:40:49] colleagues

[00:40:50] and

[00:40:50] consumers

[00:40:50] we saw

[00:40:51] that

[00:40:51] it has

[00:40:52] a very

[00:40:52] good

[00:40:52] adoption

[00:40:53] and now

[00:40:53] we are

[00:40:53] working

[00:40:54] to

[00:40:54] implementing

[00:40:54] into

[00:40:54] the

[00:40:55] app

[00:40:55] so

[00:40:56] again

[00:40:56] the

[00:41:04] specific

[00:41:04] you

[00:41:05] want

[00:41:05] to

[00:41:05] achieve

[00:41:06] otherwise

[00:41:06] it's

[00:41:07] very

[00:41:07] easy

[00:41:08] to

[00:41:08] boil

[00:41:08] the

[00:41:08] ocean

[00:41:08] and

[00:41:09] not

[00:41:09] get

[00:41:09] P&L

[00:41:10] impactful

[00:41:12] topics

[00:41:13] and that's

[00:41:14] what we're

[00:41:14] trying to

[00:41:14] do

[00:41:14] focus

[00:41:15] less is

[00:41:16] more

[00:41:16] and elements

[00:41:17] that really

[00:41:17] impact

[00:41:17] consumers

[00:41:18] and

[00:41:18] P&L

[00:41:18] so

[00:41:19] so

[00:41:20] interesting

[00:41:20] and especially

[00:41:21] in a

[00:41:21] category

[00:41:22] like yours

[00:41:22] where

[00:41:23] you know

[00:41:24] if you're

[00:41:24] trying to

[00:41:24] reach

[00:41:25] a customer

[00:41:25] like

[00:41:25] me

[00:41:26] who

[00:41:26] dabbles

[00:41:27] in DIY

[00:41:28] but is

[00:41:28] you know

[00:41:29] certainly

[00:41:29] not an

[00:41:29] expert

[00:41:30] that education

[00:41:31] piece

[00:41:31] is huge

[00:41:32] so

[00:41:32] having

[00:41:33] those

[00:41:33] chat

[00:41:33] bots

[00:41:33] having

[00:41:34] that

[00:41:34] visual

[00:41:34] search

[00:41:35] and

[00:41:35] personalized

[00:41:36] suggestions

[00:41:36] I think

[00:41:37] all of

[00:41:37] that

[00:41:37] really

[00:41:38] does

[00:41:38] help

[00:41:38] to

[00:41:38] elevate

[00:41:39] the

[00:41:39] customer

[00:41:40] experience

[00:41:40] so

[00:41:40] really

[00:41:41] really

[00:41:41] interesting

[00:41:41] to hear

[00:41:42] what you're

[00:41:43] doing

[00:41:43] in that

[00:41:43] space

[00:41:43] now

[00:41:44] we've

[00:41:45] covered

[00:41:46] so much

[00:41:46] ground

[00:41:47] I just

[00:41:47] want to

[00:41:47] ask you

[00:41:47] very

[00:41:48] briefly

[00:41:48] what

[00:41:49] are

[00:41:49] you

[00:41:49] most

[00:41:50] excited

[00:41:50] about

[00:41:50] when

[00:41:51] we

[00:41:51] think

[00:41:51] about

[00:41:52] the

[00:41:52] future

[00:41:52] of

[00:41:52] retail

[00:41:53] there's

[00:41:54] so

[00:41:54] much

[00:41:54] happening

[00:41:54] we've

[00:41:55] talked

[00:41:55] about

[00:41:55] AI

[00:41:55] we've

[00:41:56] talked

[00:41:56] about

[00:41:56] retail

[00:41:56] media

[00:41:56] is there

[00:41:57] anything

[00:41:58] in particular

[00:41:58] that

[00:41:59] you're

[00:41:59] personally

[00:42:00] pretty

[00:42:01] excited

[00:42:01] about

[00:42:01] when we

[00:42:02] start

[00:42:02] thinking

[00:42:02] about

[00:42:02] how

[00:42:03] we

[00:42:03] might

[00:42:03] shop

[00:42:03] in

[00:42:04] 5-10

[00:42:04] years

[00:42:04] time

[00:42:05] it's

[00:42:06] so

[00:42:06] much

[00:42:06] to

[00:42:07] pick

[00:42:07] that

[00:42:07] makes

[00:42:08] me

[00:42:08] super

[00:42:08] excited

[00:42:09] I

[00:42:09] think

[00:42:10] first

[00:42:11] not to

[00:42:11] sound

[00:42:11] repetitive

[00:42:12] but

[00:42:13] AI

[00:42:14] it will

[00:42:14] change

[00:42:15] it all

[00:42:15] I

[00:42:16] think

[00:42:16] we

[00:42:16] are

[00:42:17] not

[00:42:17] aware

[00:42:17] of

[00:42:18] how

[00:42:19] huge

[00:42:19] of a

[00:42:20] revolution

[00:42:20] this is

[00:42:21] going

[00:42:21] to be

[00:42:21] at

[00:42:21] the

[00:42:22] same

[00:42:22] level

[00:42:22] that

[00:42:23] internet

[00:42:24] was

[00:42:24] at

[00:42:24] the

[00:42:24] time

[00:42:25] and

[00:42:25] we

[00:42:26] are

[00:42:26] just

[00:42:26] day

[00:42:27] not

[00:42:27] day

[00:42:27] one

[00:42:28] we

[00:42:28] are

[00:42:28] day

[00:42:28] zero

[00:42:29] we

[00:42:29] keep

[00:42:30] discovering

[00:42:30] new

[00:42:31] business

[00:42:32] cases

[00:42:32] out

[00:42:33] of

[00:42:33] existing

[00:42:33] capabilities

[00:42:34] which

[00:42:34] anyway

[00:42:35] will be

[00:42:36] way

[00:42:37] better

[00:42:37] in

[00:42:38] just

[00:42:38] six

[00:42:38] months

[00:42:38] so

[00:42:39] I

[00:42:39] truly

[00:42:40] believe

[00:42:40] that

[00:42:41] AI

[00:42:41] will

[00:42:42] change

[00:42:42] the

[00:42:42] way

[00:42:42] we

[00:42:43] consult

[00:42:44] we

[00:42:44] experience

[00:42:45] we

[00:42:46] interact

[00:42:46] and

[00:42:47] internally

[00:42:47] we

[00:42:48] manage

[00:42:49] operations

[00:42:49] second

[00:42:51] I

[00:42:56] matching

[00:42:56] the

[00:42:57] customer

[00:42:57] expectations

[00:42:58] in

[00:42:58] terms

[00:42:58] of

[00:42:59] a

[00:42:59] real

[00:43:00] omni

[00:43:00] channel

[00:43:00] experience

[00:43:01] where

[00:43:02] you

[00:43:02] have

[00:43:02] multiple

[00:43:03] channels

[00:43:05] zillions

[00:43:06] of

[00:43:06] consumer

[00:43:07] paths

[00:43:08] but

[00:43:09] you

[00:43:09] want

[00:43:09] to

[00:43:09] make

[00:43:10] sure

[00:43:10] that

[00:43:10] they

[00:43:10] all

[00:43:10] connect

[00:43:11] with

[00:43:11] one

[00:43:11] single

[00:43:12] proposition

[00:43:12] while

[00:43:14] I

[00:43:14] think

[00:43:14] we

[00:43:27] marketplace

[00:43:28] is

[00:43:29] about

[00:43:29] marketplace

[00:43:30] I

[00:43:31] don't

[00:43:32] think

[00:43:32] marketplace

[00:43:32] as a

[00:43:33] business

[00:43:34] model

[00:43:34] is an

[00:43:35] alternative

[00:43:35] retail

[00:43:36] model

[00:43:36] for

[00:43:37] digital

[00:43:37] sales

[00:43:38] I

[00:43:39] think

[00:43:39] marketplace

[00:43:40] is the

[00:43:41] new

[00:43:41] e-commerce

[00:43:41] is the

[00:43:42] new

[00:43:43] digital

[00:43:43] model

[00:43:43] and

[00:43:45] if

[00:43:45] you

[00:43:45] look

[00:43:45] at

[00:43:45] locations

[00:43:46] like

[00:43:46] China

[00:43:47] more

[00:43:48] than

[00:43:48] 80

[00:43:49] even

[00:43:49] in

[00:43:57] marketplace

[00:43:57] is here

[00:43:58] to stay

[00:43:59] and

[00:43:59] it's

[00:43:59] just

[00:43:59] at the

[00:44:00] very

[00:44:00] beginning

[00:44:00] on

[00:44:00] how

[00:44:01] retail

[00:44:01] embraces

[00:44:02] that

[00:44:02] capability

[00:44:02] and

[00:44:03] then

[00:44:04] how

[00:44:04] curated

[00:44:05] you

[00:44:05] want

[00:44:05] to

[00:44:05] be

[00:44:05] how

[00:44:06] do

[00:44:06] you

[00:44:06] connect

[00:44:07] that

[00:44:07] to

[00:44:07] your

[00:44:07] proposition

[00:44:08] how

[00:44:08] do

[00:44:08] you

[00:44:08] bring

[00:44:09] that

[00:44:09] together

[00:44:09] to

[00:44:09] your

[00:44:10] stores

[00:44:10] there

[00:44:10] are

[00:44:11] multiple

[00:44:11] different

[00:44:11] ways

[00:44:12] to

[00:44:12] approach

[00:44:12] it

[00:44:13] and

[00:44:13] that's

[00:44:13] how

[00:44:14] the

[00:44:14] people

[00:44:14] have

[00:44:14] to

[00:44:14] look

[00:44:15] into

[00:44:15] that

[00:44:15] in

[00:44:15] order

[00:44:15] to

[00:44:16] differentiate

[00:44:16] but

[00:44:17] I

[00:44:17] also

[00:44:17] believe

[00:44:17] that

[00:44:18] this

[00:44:18] is

[00:44:18] the

[00:44:18] beginning

[00:44:19] of

[00:44:26] for

[00:44:26] coming

[00:44:26] on

[00:44:26] the

[00:44:26] show

[00:44:27] thank

[00:44:34] you

[00:44:34] for

[00:44:34] listening

[00:44:34] to

[00:44:35] Retail

[00:44:35] Disrupted

[00:44:36] if

[00:44:36] you

[00:44:36] enjoyed

[00:44:37] this

[00:44:37] episode

[00:44:37] and

[00:44:38] would

[00:44:38] like

[00:44:38] to

[00:44:38] support

[00:44:38] the

[00:44:38] podcast

[00:44:39] please

[00:44:40] leave

[00:44:40] a

[00:44:40] rating

[00:44:40] or

[00:44:40] review

[00:44:41] or

[00:44:41] share

[00:44:42] it

[00:44:42] with

[00:44:42] others

[00:44:42] it

[00:44:43] really

[00:44:43] makes

[00:44:44] a

[00:44:44] difference

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