How Ulta Beauty Is Powering Digital Experiences and Driving Store Traffic During COVID-19

During this hyper-competitive retail landscape, Ulta Beauty is getting creative in its efforts to build loyal customers, including leveraging digital experiences and experimenting with mobile point-of-sale to develop personalized interactions. In “The Evolution of the Experiential Store,” RIS News talked with Laura Kohl, senior VP of applications, data, and integrations at Ulta Beauty, as well as other industry experts, about the unique techniques and technologies retailers are exploring during this challenging moment. Presented here is an edited transcript of the webinar with all of the presentation slides. Tim Denman: Welcome, everyone, to “The Evolution of the Experiential Store,” produced in conjunction with HP. I am Tim Denman, editor in chief of RIS, and I thank you for joining us today. The store retail environment is always changing, but that rate of transformation has been accelerated in the past few years. Fueled by a host of new digital technology and shifts in consumer shopping preferences, physical retailers evolved from its transactional roots to become an experiential environment. Digital screens, mobile associates, do-it-all POS units, and hosts of other cutting-edge tech have all combined to turn the store into a digital playground for shoppers and associates. Some retailers have evolved while others are still exploring the shift. With me today to discuss the current state of the store and how its evolution has been altered by the current health crisis are Laura Kohl, the senior VP of applications, data, and integrations at Ulta Beauty; David Gosman, the global segment manager, retail POS division at HP; and Vanessa Foden, global director of strategy for retail, banking, hospitality, and education in the Internet of Things group at Intel. This is certainly a great panel, and I thank everyone for joining us today. David is going to kick things off with a high level look at the evolution of the store, from the transactional to experiential. David, why don't you take us away? David Gosman: Thank you, Tim. Welcome, everybody, thank you for coming and joining us today. We are here to talk a lot about, as Tim mentioned, the evolution from the transactional to the experiential store. I just wanted to give you some thoughts about how HP looks at the world and to inspire you about some of the things that are happening in the retail environment as we help you ignite this journey. So just a quick note here, the HP's vision is really about creating technology that makes life better for everyone everywhere. That means that we really look to make products that amaze in all different areas, including within the retail environment. At HP, we do invest a lot in putting together studies on megatrends, which are really helping us understand the big things that are evolving really fast in the world, that are trends that are really shaping the future. We use that information to inspire us for our products, for us to develop products and really lead out there in the world. We're going to talk about a couple of those trends really quickly. One of them is the concept of rapid urbanization. While I know that with the current health crisis out there right now, there are some people that are fleeing cities, but this is really more of a temporary migration out of cities that isn't really going to interrupt the wholesale trend over the years. There's an estimate that 8.5 billion, which is around 70% of the world's population, will have moved into big cities by 2050. By the way, a pretty heavy number now, but it's going to continue to grow. We expect there to be 43 mega cities, which have a certain level of population in them, by 2030. These cities, as we look into the future, going back to that 2050 framework, are going to control about 80% of the global GDP around the world. So think of what that means for retailers. That definitely has a pretty big impact. One, you actually see certain markets in the world like Jakarta or New York City, they're cities and they have bigger populations or they're estimated to by 2030. More GDP than entire countries like in this case, Ireland and Italy, that respectively compare to them. So it shows you that cities are really becoming whole markets, and retailers really need to factor that in when they're figuring out things like store openings, where to allocate resources, how to allocate marketing, and other things like that. Really, that rapid urbanization is having a lot of impact in how retailers are thinking of their products and how they design them, the formats of their stores, being the size and design and accessibility of your stores. It's really inspiring also, a lot of ideas for new products and services, and how they can position resources to keep their stores operational and stocked. Perhaps at the edge of the city, at the edge the market, whatever it may be. So it really has a lot of dramatic changes. Some of the early changes that you are definitely already seeing out there, popups. So popup stores are in a way largely driven by this whole rapid urbanization concept. You're probably wondering, well how is that mixed in right there? So one of the things that becomes really expensive and at a big premium within the retail world as we have this urbanization, is that every square foot of space inside of these cities is becoming more and more expensive. Once again, with everything happening with the health crisis right now, you might see some step backward in that, but really, this trend is going to continue to go forward. That space gets more and more expensive. So the concept of a popup store: What it enables the retailer to do is actually open up smaller stores that are temporary by design. These temporary locations right here are really to introduce a brand to the local part of the community, because in a big, busy city, people tend to not always want to move around as much all around the city. Getting from the Upper East Side to the Lower West Side, for example in New York City, takes a lot of time. So people don't usually move around all that much in big leaps and bounds around these areas. So a popup says we open up here, we're renting a small space temporarily, we're introducing you to our brand. You may or may not buy something right away but you've given us your information as you stepped in and interacted with the experience we've created. You're now tied to that brand, so even if we move somewhere else, you might go ahead and order when that store is relocated elsewhere in that city. Then we'll just get the product to you. That's the concept of a popup store. We're see a lot of different retailers trying out different things at temporary locations, smaller locations, really to address that increase right there. You're also seeing a lot brands starting to get into really personalized experiences. Personalized means a couple of different things. In the case of Target, they have a whole set of product lines that are targeted towards the Gen Z consumer out there. They're targeting towards a specific consumer base. This is another trend in cities and really in retail in general, not just cities. But as we look into the future, more and more brands are looking to create experiences that are more unique either to a group of people or an individual to really appeal to them and have something different than what you might see just out there in the world, that's their own product or it's a targeted product and it becomes harder to compete with that. So we see brands like Adidas, for example. They're creating shoes that are specific to individual cities, both style and also materials, as far as different cities have different types of roadways, different parks. So they're trying to customize something that's really interesting to the local community, but you take a step further and you have companies like Superfeet in partnership with HP in this case, that are actually looking to customize down to the individual consumer. In this case it's custom printed insoles that are really made for your feet and not a general style of feet or a general size of feet. So it's really fascinating how custom you're getting. Once again, we talk about that evolution to an experiential store; you're creating products over here or this type of mode, that bring people coming into your physical location because they want that experience you're offering. This isn't something they can just go buy online at a cheaper price from some random site that doesn't have the service behind it. We also see a lot of stores where they may have a primary store but are also setting up kiosks inside of different venues. So, for example, this type of kiosk here, a partnership between HP and Meridian, but it's a locker but it's a very experiential, nice looking locker with premium products that you can actually purchase through a kiosk. It ties back to a brand that may have a store half a mile away, more convenient access for you to those products immediately, but you can still get the service of a retailer that stands behind them if you need to by traveling just a bit further. This is really a concept that's catching on for certain types of products in certain environments. You'll also see more customization out there. This is the case of IKEA over here, offering accessories, 3D printed accessories to personalize their radio lines. You can see that you're taking a basic product and you're making it your product and you're making it more fun, you're making it more interesting, and you're making the experience about you. That's what appeased people going into the store. Another example here about HP is actually working closely with manufacturers and with retailers to help them create their own custom product lines using creative materials. A really close service, this is more I would say closer to its infancy than maturity, but it's really come a ways beyond infancy right there. They're able to help create customized experiences and retailers are looking at this as a way to differentiate themselves, and once again, create that experience and that personalization which is the big theme. If we look further into technology, technology of course has a really big impact in how this world is operating and how stores are operating. These are a couple of examples, the first one is probably very familiar to some, the second I see more in European and Asian markets, but the Amazon Go Store where you can walk in, grab your item, and just walk out. They simplify the shopping experience. It might be a very limited set of products, but this technology is now being examined and in pilots, being adopted, by several retailers that really want to try to make a more seamless experience and try to make the experience more about you enjoying shopping versus you having to go through check out, which is the point that now loses some customers and isn't always as fun or as glorious. Panasonic, their own take where you can have an RFID enabled reader. You put the basket of your products into the reader, it rings you up in one swoop without having to scan each item individually. So at HP, we're always looking to see what technology is out there, where should we go in the world to make sure that we're meeting our customers where they want to be met, and helping retailers really serve consumers. So we do look forward to powering your retail experience. You can always reach out to us, we're happy to work with you. Invite you to join us on the journey of creating retail experiences. We're happy to work with you. We have a lot of these mega trends that we go into a lot more detail. This, we squeezed into just five minutes, but if you ever want us to come in, well in this case virtually for now, and present to your teams about any of these topics and how we can help inspire some vision. Thinking more experiential within your brand, we're happy to do that. Please, always just reach out to us. On that note, I do want to hand it off to one of our very valued partners and customers, and a good colleague, Laura, from Ulta Beauty who is going to speak to you about a specific journey that Ulta has done with technology. So Laura, over to you. Laura Kohl: Thank you very much, David. Well, first I'd like to thank everybody for having me here today. I do want to talk a little bit about Ulta and the background of where we came from and where we are today. So Ulta is definitely a strong company, just over 30 years, and how we started was really around three pillars for the strong and differentiated model. It was all around real estate, mostly off of the traditional mall properties, which now thankfully that was the case. A ton of beauty assortment all under one roof, so we have thousands of products that are accessible. Then, of course services, so you could shop and then have your hair done all at one location. Now you fast forward to the digital world that we're operating in, and we still see ourselves and are focused in our competitive, differentiation strategy, which really is at the core, we have a one-of-a-kind, we feel, merchandise assortment. We have over 40,000 products or SKUs available, whether online or in the stores. Around that, we have a fantastic loyalty program, I think it's one of the largest in not only the industry but around. Then with the shopping experience going into the physical stores, we have around 1,300. You have the shopping experiences, the services, but of course the world that we live in today, we've got the digital on top of that. So it blends that omnichannel experience of both the digital and the physical world. Now if you're in the stores, with pre-COVID, we were working on some neat things, but then COVID hit. So how did retail shift? For us, we were already doing the buy-online-pickup in-store, which I know a lot of retailers participate in, but that had to go full ramp to all of our stores. We also were playing with curbside pickup, but we hadn't started that yet. So we quickly pivoted to curbside, so that gives our customers an option, whether or not they want to go physically into the store, or if they wanted something more quickly versus an online order that might take a few days. So then as you shift back as going into the store, that the safety standards are critical and key. So we don't see as much retail traffic coming in, there is some and it's picking up over time, but it's that blend of the e-commerce. Thankfully with e-commerce that's helped make up some of the traffic, but in-store, it's all about the safety. It's requiring everyone to have the facial coverings, having social distance. We have hand sanitizer stations throughout the stores. There's a lot of deep cleaning that happens frequently. Then our services are back in. I can tell you that we're having a lot of business on the services side. Every other chair, we have to keep the distance, but that has definitely become much more prevalent and profitable over this COVID time. I have to say, I'm only a year in at Ulta, I must say that we have some of the most passionate associates of any company that I have worked at. When you take the physical store, and as I mentioned with omnichannel and the way things are shifting with digital, you have that blend of the two worlds coming together. We've really shifted into our, what we call Glam Lab, which is our virtualization and our virtual try-on. So you can look at different hair colors, skin, brow, different pallets. So you can see what things look like. Now, with COVID, we don't have our testers available. What's fun going into an Ulta store is to actually try on some things or smell the products or feel the product, that just can't happen right now. So at least with this virtual try-on, it quickly shifted into that. Whether you want to do that wherever you are or in the store, it complements the store experience. We do also have a skin analysis, so if you have some opportunity areas, it can give you and provide you, through some AI, different products that might be good for your skin for those recommendations. Of course, whether you're in-store or not, if you want to have that personal consultation, you could do that face to face and video, or through an AI chat. So definitely the world is changing. Now payment in the stores, we have the traditional registers, we have been playing around with mobile POS or point of sale. I can tell you that something that we're going to go back into, and the traditional registers, may switch a little bit more to that virtual or the all-in-one where around the store the experience is a little bit different. I just want to close with Ulta Beauty is definitely a place where beauty lives, and the possibilities are endless. The omnichannel experiences will continue on and really excited about where the future is going to take us. Denman: Those are two great presentations. We're going to go into our conversation of the webinar now. We have some questions I've prepared, we also have a lot of questions coming in from the audience. This first question is going to go to David first and then anyone else wants to jump in afterwards. David, the store's gradual evolution from transactional to experiential location has been great; it accelerated over the past few years. Why was this progression necessary? What sparked the rapid scale-up? Gosman: Yeah, Tim, thanks. Really, the original purpose of a store was to offer products to customers and have them come in and buy it. Really, I'm sure that obviously is still the intention today, but it's changed quite a bit how that's done and how retailers really try to work their customers. A lot of that's been driven by e-commerce and mobile commerce. It's really changed the game because you have more competition, you have easier access to products, and really with mobile, people can shop anywhere, anytime, whenever they have the urge. Stores have really risen to the occasion of trying to figure out, well, how can we make sure our stores are places that customers really want to visit? What can we do special about it? Actually, Laura just went through some really great factors right there, things you could do while you're in their store that make your experience better than if you were just shopping online. Not that they don't have a good joint experience there, but the stores have that elevated experience. Also, there's a lot of stats out there but 89% of consumers say that they stopped doing business with a brand after a poor customer experience. People talk over social media, you need to make stores that really amaze people and have different things about them. That doesn't always, by the way, always mean there's just technology everywhere and moves to experiential stores. Experience isn't just technology — it's people, it's product, it's so much more than that, and it means different things to different stores to go on top of that. So, but I think that need has really been driven by those social, mobile, or e-commerce, that's really increased competition. That's the general theme of why stores need to change that mode and way of thinking. Vanessa Foden: Yeah, and if I may jump in, Tim? I would also add that retail, as we painfully are aware, it's a hyper competitive industry. Really, what has happened is the pandemic has accelerated this need for the blend of our digital and physical shopping and experiences. Very well said, Laura, wonderful to have a live example. When we look at this, we have our stay-at-home shoppers. This is increasing that digital demand by as much as five years. We're really accelerating here. Then when we look at different ways to bring our customers in, whether digitally or physically, we're seeing this increase in reward programs. How do we help use these reward programs to build the brand loyalty that we're trying to capture, but at the same time, you're building this by loyalty. You're gaining information value to help that consumer down the road. Denman: Laura, you talked a lot about the technology that Ulta is using in-store. Obviously technology is the key driver of this experiential reality that we're talking about today. Can you build upon that? Can you talk about maybe what you guys are doing and also what other technology you've seen that are really helping reimagine the store? Kohl: Yeah, absolutely. So I think personalization is key. So what Vanessa was, I think, trying to get to is having that loyalty customer, and knowing what's important to them and building upon on that. The personalization is definitely something that we're going to spend some time and effort on, even more than we have today. I think also, taking some of the trends and the influencers in the industry, how we advertise or in the time of the pandemic, having some little video clips of how to maybe do things differently or to do maybe your hair yourself. So I think it's just shifting some of the things. So it still would have you potentially go buy a product, but now you're maybe trying some things on your own. So we're seeing some of that technology play into what we're looking at, as well what other unique things out there from a technology perspective could drive some traffic in our stores even because we do feel at some point things will shift back. That experience in the store is definitely something that I know that our customers are craving again. Gosman: Yeah, and I think those are great things. Like you said, Ulta is already doing so many personalized things. But another area too, so we hosted a bunch of Latin American retailers up in New York, and I put together a whole session for them not so long ago. Well, pre-CVOID. I brought them around to about 10 different stores around New York City, some of them big brands, some of them small brands. One of the biggest themes that we saw that technology was actually adding to, it's what I referenced earlier as well, the customized product experience. It's where you walk in and you're walking out with a product that might be a mainstream product was customized or you. Levi's is doing it, or example, in their tailor shop in-store. There is a company that was actually selling customized makeup bags. I bought one for my daughter and brought it home for her. So the whole customized experience too, which is driven by technology, is really ... I think it's fascinating because you are now really making products to be individual and that experience you really just, you can't replace. Really, is a huge driver to come into the store. I think also, Laura, you referenced earlier rather that you're going to introduce mobile into your stores. Mobility is very interesting because stores are these fixed footprints, and you have your associates and they're going to help customers one-on-one. One, it's always nice when your associates have as much or more information than your customers, and they have a phone, your associates need something, right? But in addition to that, it opens up that whole concept of endless aisle where hey, you know what? We don't have that in that color today but I can have it to your house by this afternoon from a different store, or by tomorrow if we ship it to you. They're able to open up your whole warehouse to the customer in a really friendly fashion with that data right there at their fingertips. Once again, something you have to hunt around for online, but when you're there in-person in the store, you want that experience, you want to buy that product. The stores need to make sure they can actually get you what you want. Foden: Hey, David, if you don't mind. One more add on my end before we move on. That's just what I wanted to share, is we spent the time talking to some mall management, as well as store owners. We really heard this recurring theme that stands out again and again as we're going to talk so much about digital shoppers today. It's that the shoppers that are showing up, they're there to buy, they're not there to browse, they're not there to get a cup of coffee. They're there to buy and they're essential. We want to make sure that we provide that best service always, in-house, as we are from a digital environment as that is continuing to increase. But what you're seeing then is that's an opportunity, though you may have less foot traffic, you have an increase in sales per customer in the store. So I just wanted to highlight that one note, as I know we're going to talk quite a bit about the digital shopper today as well. Denman: Great, thanks, Vanessa. Let's send another question your way. Now, let's talk a little bit about the role as edge computing has in all of this. How are leading retailers leveraging technology on the edge and how it is helping them create a competitive advantage? Foden: Yeah, wonderful. So I'm going to be a little bit like David here, my goal in life. I'm going to share a few stats before I just jump right in. They're complementary just from different lenses, I would say. So the first one is, per IDC, more than 45% of the data is being processed at the edge, while another source notes that by 2023, up to 70% of all enterprises will process data at the edge. So this is key, that we work with retailers and we really understand the demands of the businesses and their infrastructures. It's so important to those servers, the networks, the routers, for example, were able to build a collapsed stack. So this could include anything from a top to bottom inventory management, our POS network to cloud, and very importantly, understanding the shopper traffic patterns and so much more. So we continue to work with our partners to help build this real simple to vantage the edge, but while we're seeing this edge solution increase visibility, it's very important to get those usable and the actual insight and having that near time information blending these multiple sources and getting those metrics and shopping behavior. So when we look at that, we see this really come to life especially now with COVID-19 and the pandemic we're in the middle of, with retailers and hospitality. So I always note, in some ways it's going back to the basics. So we always want to create that customer satisfaction, we always want to bring the customers back in. At the same time while we want that, we can utilize information to help predict the customer's actions but also to proceed, what is that next app? What is that next item that we need to be thinking about that our customer may want or anything from the layout to the store? Gosman: It's interesting because it's almost like a pendulum swing back into the favor of local computing from the concept of cloud computing, but in a way it's really not. What we're seeing a lot more in retail stores now is there's a lot more data that retailers are collecting because there's this really big desire. The one benefit of an online experience is that they are tracking you, and a lot of times you log into a site, they know who you are, they know your preferences. When you walk into a store, you're very much an anonymous person in many cases. Their goal is to try to even out the personalization of the in-store experience. So edge computing at its very core is just trying to bring the actual computing power closer to the source of the data, which is where you are in the store. That makes it more responsive, it helps you gather data more effectively from all the censors and cameras and everything else that are being laid out all around different types of retailers. Some retailers aren't touching this at all, and that's fine, I'm not concerned about it there, but some are very aggressively pursuing it. So it's a really interesting mix right there, but. One quick, but I know very pertinent, example: So the local supermarket I go to, there's a robot that wanders around the store now, he rolls around. I don't know if it's a he or a she, but the robot rolls around and its job is to actually scan the shelves. It understands what's supposed to be on the shelves and where, so it's able to capably spot, is something out of stock? Is a bottle of Coke in the Sprite section not where it should be obviously? Was there a spill on the floor? It's able to spot a lot of these issues that they would usually have to deploy a human being to find. Then it alerts a human being in real time using all that local processing power because they're not sending it up to the cloud waiting for a response, to go resolve the situation. So when I walk down the shelf, the Coke is right where the Coca-Cola is supposed to be. There's no spill on the floor because something is monitoring that stuff much quicker. That's one very quick example. There's a lot that you can do with supply chain and everything else with edge computing, but it really can elevate the experience. Once again, it's nothing crazy what I just went through, but me as a customer, my experience is now better in that store because they've used technology to help that experience happen. Foden: David, let me add onto that a little bit as well. What we also see and probably the audience feels is the personal pain in this area, is we have a lot of systems out there in our environment, especially some of our long-term very valued retailer. It's not so simple to make the switch or transition. To David's point with the robot, inventory tracking is well over $1 trillion problem. It's now important more than ever to understand our preferences, the inventory location, and how do we really create that best ultimate customer experience. So when we participate with retailers, we can create these smart edge nodes that help promote offers, relevant ads, loyalty, and does these connections as well to the POS systems and payment solutions. So it really gives us opportunity, what the edge opens up is this opportunity for the real end to end shopping experience. Denman: I know whether it's robots or other edge technology like you guys were talking about, obviously the store is in a multi-year transformation that we've been seeing going on. David talked a lot about that at the beginning, but how has this transformation been altered or changed with everything that's going on with COVID? Gosman: It's really interesting. I want to hear Laura's input on this too, because she's closest to the retail store, but. Going back to that edge computing example for a second, but tied to your question, Tim. I've actually talked to some technology providers out there that provided edge computing solutions that were tied once again to those sensors and cameras. They've added new logic in pretty record time as the whole retail world has adjusted to this situation in near record time. Where they can actually now use their sensors to do things like traffic counting to make sure you're not exceeding how many people are allowed in your store. Of course that's different by city or by state; it's all different regulations around the country right now. Also, even inside of their store, if they see people that came in separately and are all gathering in one area together, maybe they see a really cool product. I'm sure this is a little bit hard for the associate to say like, "Hey, can you guys spread out a little bit? We're trying to enforce social distancing." Also, the camera can alert them to somebody who's not wearing a mask. Once again, it's a very difficult situation to navigate, consumer versus associate, but they have to to keep the store safe and to keep the other consumers and very importantly the employees, comfortable. They're able to use a lot of this edge computing they already deployed, and all those sensors, to find these situations and help them action them right away. There's a lot more things out there, but I'd really love to hear from Laura what you guys have done because you have some great examples when you first opened up. Kohl: Yeah, it's interesting you mentioned the traffic counting, I think that's something really important for the retail store, so that's definitely something that we've taken underway. The other thing we're playing around with: We know approximately the number of people in our stores as we get into holiday. Do we want to advertise that? So do we want to say, "Hey, it's safe to go in. We've got capacity for 10 more or not." There's a benefit to that, but the flip side is there's a lot of retail crime. So do you want to advertise how many people are in a store or not? So we might do things like a red, yellow, green, as far as hey, it's approximate but not necessarily advertise the sheer number. So it's interesting how information could potentially be harmful. Denman: We had a couple other questions planned, discussion points, but we have about 10, 15 minutes left and we got a lot of questions in from the audience so I'm going to propose some of the questions from the audience now. We got one here for you, Laura, about the tech you have in place in the stores at Ulta: What tech do you have to support buy-online-pickup-in-store and curbside pickup? Are your associates equipped with mobile handsets? Kohl: Yeah, so our associates do have mobile devices. Right now they're iPods, we're moving more to phones. Actually we've split the device types for inventory as well as the buy-online-pickup in-store payment just for sheer reliability and some other things, but they're equipped with those devices. The mobile payment, it's an interesting one. That's something I think we're working on a better solution for because they're not necessarily embracing that from an associate standpoint. So we are definitely going to dig in further into that, but they are equipped with those handheld devices so that the buy-online,-pickup-in-store, curbside, are a seamless experience, but we keep enhancing, for instance the curbside to say yes, I'm here, versus having you call. Just to try to make it a little bit better of an experience for our guests. Denman: Laura, one of the questions was about what you just talked about, the payments. So you covered that, but we have one here about the role that analytics and artificial intelligence play in Ulta's corporate decision making process, as it relates to initiatives such as the digital experience. Kohl: Yeah, well analytics, I mean this is becoming more and more prevalent in everything that we do. As far as what our customers want, looking at inventory, visibility, making sure that we have the right levels of inventory in the store so that we don't run out. So we're continually looking at the analytics side to make sure that we can provide the right products in the right locations. From a supply chain standpoint as well, and the distribution centers, we're continuing to drive some of that knowledge and how we work and how we position things and product, but yeah. I mean analytics is becoming more and more prevalent, I think more of a proactive versus just reporting out the sales and how things are going. So how can we, even for our associates on the store floors, to say, "Hey, here's the five things that you might want to look at versus your traditional tasks." So maybe the alerts, and then having them handle those alerts right away, versus just going through my checklist for the day. Denman: We got another one here for you, Laura. David or Vanessa, feel free to jump in on this one because I think it plays into your wheelhouse as well. Someone's asking about the virtual try-on that you discussed. You talked a little bit about that already, but the question here is, do you think that's going to be sticking? Do you think when the ability to use a physical tester is available again, will customers go back to that at the same frequency they were using it before? Kohl: I think it's a unique blend. We actually were working on the virtual try-on. We had some acquisitions a year or so ago that that was just something that we were looking into with machine learning and AI. I think it's going to be a blend. I think customers like to shop the way they traditionally did and for me, I can't wait to go back into the store and see and feel and smell some of the products, but for convenience or maybe those that like to shop just online and don't have time potentially to go in the store, I think it's just another offer. Gosman: A lot of this is a temporary setback, I mean there is definitely great reasons to shop for certain products online. That's just the reality. You don't need to go to a store for everything, but stores introduce so much and humans are social creatures. I mean they talk about all this anxiety that people are getting from staying home so often and they want a release right there. Retail is often what people do for the release, they like to go browse and shop and it's an enjoyable experience. That enjoyment is not going to go away. People are either scared or regulated in place, temporarily. I did go to the mall just a couple weeks ago and we were in the... I think it was the Bath and Body Works store. Are they the ones with all the candles and the soap? Is it the Body Shop? Everybody's sticking up the candles and smelling them. They're checking them all out and people are still doing their normal activities. … But these experiences aren't going away. I could certainly see a lot of the new things that have been adopted like the buy-online-pickup-in-store, that was accelerated for you guys. I feel that has staying power. There are some things that were accelerated that make the consumer experience better, those are going to stay, but the experiences that customers already liked before, they're still going to like them. They're still going to want to try on clothes before you buy them. That's the reality of it. You want to see how you look in them. So I think it's coming back, you just need a little bit of time. Foden: Yeah, I would say, David, it's definitely coming back but the digital shopping experience is 100% here to stay for multiple reasons. One is that convenience. I would say curbside pickup, Laura, you had mentioned it yourself. That has really kicked off whereas that previous experience was to wait potentially for the delivery. Now we have this option to pull up, get our items, and keep on moving. So I have some friends that are in their 80s, and they for the first time ever downloaded an app and started ordering for them to get the experience of getting outside the house, getting in the car and driving around but not actually going into the store. So I think we're going to continue to see this digital expansion. I've seen firsthand … from 67% to over 200% increase in digital sales. So I think the infrastructures are built around them now. Many of the retailers, if they didn't have it before, they have it now. So that convenience is really what it's about, is that experiential key to that, is also the convenience. How do we know, not just that predictability we've been talking about so much about having the right product at the right time for when I want it, but having that experience at the same time. Part of that is that convenience of I can just pull up and pick up my product or wait a day for it to show up at my door. So I think we'll continue to see that at a very high [rate]. Denman: We got a question here which is right in David's wheelhouse as our resident POS expert. The question here is, with all the transformation occurring the store, how relevant does the traditional POS remain moving forward? Gosman: It's a fascinating question, really, and I think it really depends on what you consider to be the traditional POS because that definition has evolved as well. So this is my personal estimate here — it's not a company estimate — but you look at all the technology evolution, and I think that there are some retail environments that really lend themselves to move into a less traditional point of sale sell. One early example would be Apple. So Apple, they don't really have their traditional registers. They have associates with mobile that come and help you face to face. Is that a traditional POS or is that non-traditional? You look at the Amazon Go type store, which I think a lot of people view as the existential threat to "traditional POS." The technology is expensive, it'll come down in price, it'll become better. I think it won't be a sensible replacement for certain types of retailers. There's no reason for a jewelry store to deploy it; it's very unlikely a department store to deploy that kind of technology. It makes a lot more sense in areas like convenience store where you're frequently visiting or having one product and leaving. So I think that, if you consider the fact that traditional POS really has multiple forms, the forms have extended, I think you're actually going to see more POS terminals in total. That you see having more associates being armed with mobile tools. You'll also have a lot more edge computing type of terminals that are happening around the store and the market itself is bigger, but you're seeing an evolution of how they're going to change. Certainly, your average fixed cash wrap register in each store will probably reduce over time. Another example is Nike. I was in one of their stories during that store tour reference earlier. They have all of these checkout pods all around the store. They have fewer registers in the traditional location, but these checkout pods that have receipt printers and payment terminals and stuff they can use for bagging and de-tagging and all that. They take a customer there for checkout. Is that a traditional POS? I would say probably no, but it's still a POS, it's just operated differently. So it's evolved but people want to buy things and the job of a retailer at the end of the day, they do have to get paid for the products before the customers leave the store. Foden: Yeah, and David, I agree with you 100%. Some of these, we see these walking the trade show floor or now more realistically an online video. I agree with you, as far as we'll see more automated POS, more self-checkout solutions, but one of the things I would say the pandemic did drive was that increased demand for that payment by face and voice recognition. It was already there being explored, but now just like the drones, the acceptance of it has increased. Denman: Great, thank you. I think we have time for one more, and it's an interesting question here. I think it's also a nice way to wrap it up. Maybe everyone at the panel could weigh in on this one. This is the $10,000 question: What is the future of the store for the next six months to the year? Can you point to one or two technologies that leading retailers are going to be investing in as we look into 2021 and beyond? Kohl: I think we talked about a lot of it. I think looking at the mobile POS would be one. I think the personalization, the analytics is definitely going to be probably our second, along with the digital and physical, tying those together. Foden: I would add in, one of the highlighted conversations is that edge computing, because that really bring that all of the above opportunities and technologies that we talked about today, including our backend infrastructures together. So I really think that is going to be key for growth opportunity for all of us. As far as getting out the crystal ball, I absolutely love this. This is actually the bigger part of my day. We have seen, and from a global perspective, we have seen technologies take off so much quicker and that's due to very valid reasons, different government, different agencies, and how we lead. But what I've seen is the change in the consideration of how we cannot just from the government perspective in regulations, but also what individuals are willing to try differently, is we're going to see a change in that willingness to try some of these new technology that we talked about today. Gosman: Yeah, so I agree with everything that Laura and Vanessa said. So in the spirit of trying to not copy them, I'll throw out two more. So one, actually Vanessa almost implied it by saying taking off. While you might not really see drone and robotic delivery have a huge adoption over the next six to 12 months, I think because of COVID, all the government authorities involved in regulating how that's going to work are letting that go a little bit faster. I do think that we're going to start to see drone delivery in very different ways, given rapid delivery. I think this actually has huge advantages. I'm not trying to convince you, Laura, to look at it either way, but you have stores in so many areas. You have the inventory close to your customers in some areas, and that's a strength. Drones are going to help retailers or different types of rapid delivery like that, are going to help retailers round out their strength to compete better against the online only retailers. I think it's a huge thing. The other area I think you'll see some evolution is going to be a bit copy of what you're seeing at the restaurant world right now. So there are some restaurants, sit-down, and no longer do you have to give your card away. Instead, you're actually scanning a QR code on the bottom of your check and you're able to complete your payment there. I've been through the process at a few locations, it's really simple. You don't even need to download an app, and if you're using one of those phone based payments as well, it's even simpler. I think that those are going to make more sense for retail, maybe it'll be a fixed QR code at the register, but that means you don't have to touch that payment terminal. You know what? If people are a little scared by doing that, now you can complete your retail experience with even less touch. So I think that payment, we'll see yet another evolution, not away from credit cards but simply how the credit cards are actually being used through an electronic interface powered through your phone, and maybe a little bit less than that traditional payment terminal. Denman: Perfect. That's a good way to wrap it up. I thank David, Vanessa, and Laura, for all of your insights. Thank you for listening, thank you to the panel for joining us, and have a nice day.

Related Topics