Thank the Maker — 2020 is almost in the books, and, fortunately, it also wasn’t all that bad.
In fact, from a retailing perspective, 2020 brought with it some of the best headlines of recent memory. While much of the world was trapped inside, forever relegated to Netflix
So, without further ado, it is time to celebrate the past year and to do it up right.
It is time to announce this year’s 2020 Retail Award Winners:
Retailer of the Year
Peloton flat out won the pandemic . . . if there is such a thing. Sure, luck was a little bit on Peloton’s side, but sometimes it is better to be lucky than good, and those that understand luck also know that the lucky tend to make their own.
Peloton won the pandemic because it smartly and strategically positioned itself to win going into the whole darn thing.
Results wise, Peloton has crushed it. Sales have increased by as much as 172% in recent quarters, Peloton now has over 1 million subscribers, and Peloton’s customer churn rate is a measly 0.52% and reportedly on par with the size of Liechtenstein.
More importantly, however, Peloton also now has the chance to achieve even greater heights. Peloton could be poised to become the next Nike.
Think about it.
In the 1970s, Nike sold shoes. What are shoes? Equipment. What’s a bike? Equipment.
Then in the 1980s, Nike got smart and started using celebrity endorsers. Whom does Peloton have in this same regard?
Influencers with perfect jawlines and catchy names, like Emma Lovewell, Kendall Toole, and Cody Rigsby. Influencers who are as much cult leaders and performers as they are fitness trainers. In fact, if you have never “lived long and loved well” with Emma (her signature catch phrase), chances are you probably still want to buy the world a Coke, too.
And, not to be out done, just last week Peloton also announced the acquisition of Precor to fortify its expertise further in additional types of fitness equipment, like treadmills and weight training machines, and to give itself a foothold into the physical gym business.
Or, said another way, all the ingredients are now there for Peloton to make something special.
Peloton’s millions of subscribers are already addicted, measured constantly, and kept tightly engaged within a closed-loop social network, the latter of which is something Walmart had to pay billions of dollars just to try with TikTok and something Amazon
Yet, there sits Peloton above it all and in the same hallowed, social media ground of Facebook/Instagram and with the very same ability to pummel its followers daily with words of sweat encouragement and peer pressure from trainers whose names would make even porn stars blush.
As a result, there’s still nowhere for Peloton to go but up. Expansion both beyond the home and into gyms are all still options, as is expansion overseas, and so, too, are further product extensions, both in equipment and apparel, to be sold online and in stores.
The world has seen this evolution before. Only this time it just may be about the bike.
At least, to start.
Runner Up: Facebook
The year belonged to Peloton, but the next 20 years may belong to Facebook on an even bigger scale.
Mark this day down: November 12, 2020.
November 12, 2020 was the day Instagram redesigned its homepage for shopping and signaled to the world that it plans to go hard after online marketplace commerce.
As of now, the shopping mall is officially digital, and the 4 million Americans born every year, and for whom Jeff Spicoli means nothing, will never know shopping any other way.
Not even Amazon can touch that.
CEO of the Year
Winner: Corie Barry, Best Buy
No one has done more with less this year than Best Buy. Best Buy sells the same products as Amazon, Walmart
Because freshman CEO Corie Barry has guts.
Early in the pandemic, Barry had the wherewithal to make a tough call. She shut down every one of Best Buy’s stores and made them only available for curbside pickup. Remarkably, Best Buy retained 70% of its sales volume following the decision and also learned one far more important lesson — its online sales ceiling.
From there, Barry got scientific method on things to an even greater degree.
Next, Barry opened Best Buy’s stores back up for appointment shopping only, which again enabled Best Buy to see what impact the graduated move would have on in-store demand by store location. Then, as stores began to open up more fully, she and her Best Buy team took all the newfound data and began to turn their stores into overt ship-from-store hubs and to partner with Shipt for last-mile delivery vs. in-store picking.
As a result, Barry and Best Buy now likely have a better understanding of the puts and takes surrounding online picking, packing, and fulfilment by location and across their store base than just about any other retailer in the country. No one else had the guts to make the call the way Barry did nor to put into place the same degree of step-wise experimentation she did.
In just her first year on the job, Barry gave a master class on omnichannel retailing theory and practice.
Runner Up: Tobias Lütke, Shopify
Shopify is a force with which to be reckoned. Worldwide over $5.1 billion of sales volume went through Shopify’s commerce platform from Black Friday through Cyber Monday. For context, the entire online U.S. sales volume on Black Friday 2020 was only estimated at $9.0 billion.
Put simply, Shopify is the friend of the little guy. It is the tech that helps to level the playing field and make life easier for small businesses. While its reputation is still growing, Shopify has barely scratched the surface on all the digital innovation it could bring to bear for this audience.
Shopify Balance is a start, as are its partnerships with Stripe, Facebook Shops, and Walmart.
However, all are also just the first chapters in what likely will be a Harry Potter-like series in terms of the volumes of work still to come.
Worst Retailer of the Year
Winner: The Department Store
What was it Bill Paxton once said in the movie Aliens, “Game over, man?”
Nothing could be more apropos to describe the state of the department store industry.
The department store is done. The concept is retail’s 2020 version of the horse and buggy — a concept that had its time and place but that feels almost as old and outdated now as a Thanksgiving Day parade.
All the reasons why people shop retail stores — inspiration, convenience, immediate gratification, taction (i.e. the ability to touch and feel products), and social experience — are all either now better done somewhere else or come with such a high opportunity cost that one’s money is just better off spent some other way.
If that argument isn’t enough, take a look at the below picture and ask yourself one question: “In what year, was the photograph taken?”
Sadly, it was taken just this past month, in early December.
Runner Up: OTG (aka the Airport Convenience Guys)
This pick is late breaking, but, within recent weeks, OTG, the guys famous for airport convenience stores, opened up a new OTG Sibo Express Gourmet Market in the Newark airport that licenses Amazon’s “Just Walk Out” checkout-free technology.
How OTG fell prey to the exact same mousetrap that befell so many retailers back in the late 1990s and early 2000s is just unfathomable. In addition to Amazon running its own Amazon Go convenience stores, Amazon, by way of OTG, now also has a front row seat to airport convenience store operations as well.
There is almost no way this whole charade doesn’t play out the exact same way it did over the last two decades, as retailers like Target, Toys R Us, and others watched in misery as Amazon ran their websites and put them years behind digitally. The same is about to happen with computer vision-based checkout-free retailing.
It is like watching a remake of A Star Is Born and still being surprised when the dude dies at the end.
To say retailers are creatures of habit is an understatement.
Retail Technology of the Year
Winner (Tie) — Cloud Commerce and Computer Vision
The best outcome of the pandemic is that it has made retailers start to rush toward technology investments like groupies at a Mötley Crüe concert. As a result, the word “omnichannel,” harangued and beaten down for years, is finally cool again.
And, rightfully so.
The pandemic has ensured that retailers now get the punchline to the joke that successful omnichannel retailing is predicated upon three things — 1) Cloud commerce 2) The ability to record people and product movement within space 3) Great context and location analytics — the last of which is useless without the prior two.
Cloud commerce is the first foundation. It surrounds the implementation of real-time order management and point-of-sale systems that can accurately reflect sales and inventory at any point and anywhere in time. Most retailers don’t have these systems in place. The big guys are starting to have them — e.g. the Walmarts, Targets, etc. — but the little guys?
Not so much.
These systems are important for a number of reasons, but first and foremost and as Eddie Garcia, Chief Product Officer Sam’s Club, said in the below interview at the very start of the pandemic, they are what allow retailers to go fast and to stay flexible in response to customers’ changing demands.
One of the reasons the retailers mentioned above, for example, have done so well during the pandemic is that many of them use their order management systems to differentiate their online experiences way up in the sales funnel.
For companies like Sam’s Club, this could mean having an employee take your order at curbside, while for others, like Target, for instance, it could mean showcasing shipping options or pickup options before customers even get to their online carts or checkouts. These types of functionality make a huge difference when same-day delivery or pickup is a major point of differentiation for where people shop.
Computer vision is the second foundation.
Computer vision artificial intelligence is what Amazon Go uses for its “Just Walk Out” technology mentioned above, and it is also what retailers can use to understand the movement of all people and products through physical spaces, akin to how a mouse moves atop a browser. It is what can help retailers to monitor inventory accuracy, pricing accuracy, or even to know how long some dude named Dave might stare at Coke relative to Pepsi while in aisle and all in real-time.
Taken together, these two systems — cloud commerce and computer vision — will soon become the Solomon’s Baby of retail operating systems. Choosing between them is almost impossible. Both will only grow in importance from here on out.
Runner Up — Shopify
Headline of the Year
Winner — Amazon Fresh Opens in Woodlands Hills, CA
On September 17th, 2020, Amazon officially entered the physical grocery store business when it opened its first Amazon Fresh store in Woodland Hills, CA. The store comes with everything one would expect to find in a full-sized grocery experience, plus some delightful Amazon twists, like counters for order pickup and returns, Alexa-based wayfinding, electronic shelf labels, and, of course, the ever-popular Amazon Dash Cart that enables some customers to shop and “just walk out” of the store without ever having to wait in line.
In just the three months since Fresh debuted, Amazon has opened up four more Fresh stores — three more California and a new one, as of December 10th, in Naperville, Illinois. Amazon also says that it plans to bring the concept to New Jersey in 2021.
For those keeping score at home, that means Amazon has debuted one new Fresh store per month to close out 2020 and will debut lord knows how many more in 2021.
Amazon Fresh is important because it ups the bar on same day grocery convenience and unbeatable prices. Amazon customers in Amazon Fresh markets can now choose to have their groceries delivered to their homes, to pick up their orders at Fresh stores, or still shop in store with the confidence of knowing that prices will be digitally marked-to-market at shelf and that they may not have to stand in line to pay, either.
Amazon Fresh is a first-stage culmination of cloud commerce and the early principles of computer vision come to life. And, it is only a matter of time before Amazon, just like it did for e-commerce, makes Amazon Fresh the standard bearer and expectation setter for in-store grocery convenience at scale.
Runner Up — Kohl’s and Sephora
Just when Kohl’s looked like it was about to go the way of Macy’s and J.C. Penney, Kohl’s did something unexpected to close out the year when it signed a deal with Sephora to open 850 shop-in-shops within its four walls by 2023.
After a year that had seen Kohl’s CEO Michelle Gass do nearly everything but sell her first-born child to Amazon (e.g. returns partnership, a rumored Amazon grocery partnership, etc.), the Sephora partnership could be evidence that Kohl’s may now be starting to put the pieces together on something unique and special — i.e. a smaller but more convenient and upscale one-stop shop than either a Walmart or a Target.
The chips are now on the chessboard — beauty, Amazon returns, possibly even Amazon grocery, along with a host of brands (e.g. Nike, Under Armour, Sephora’s full lineup) that Walmart and Target could never dream of carrying.
It’s not the sexiest strategy of 2020, but it could be the smartest. After all, if you can’t beat Amazon and Facebook, then you may as well join ‘em.