The biggest takeaways from retail executives at eTail Boston

At eTail Boston last week, retail executives predictably had a lot to say about artificial intelligence, but that wasn’t the only topic that came up repeatedly at the annual retail conference. The importance of the in-store experience and loyalty programs were also popular topics, as retailers appeared committed to improving their brick-and-mortar stores in addition to getting the most out of new AI-powered technologies.

Here are some of the biggest takeaways:

Target finds its AI footing

Brad Thompson, SVP of technology at Target, went deep on the company’s experience so far in adopting AI, noting that “at the beginning, it was dicey,” because of the high risk of “hallucination,” which is when AI fabricates false information. Since then, Target has taken pains to develop its tools in-house. “Everything we do on our e-commerce stack is custom built,” Thompson said, “which means that when we make the decision to build something on our platform, it is our own software developers, our own data scientists that are building that.”

Warby Parker and Wayfair embrace brick and mortar

Paul Toms, CMO at Wayfair, outlined how the online furniture store is investing heavily in brick and mortar. “The headline is we’re opening stores,” he said, noting that its first physical location opened in 2024 after 23 years in business. He explained that the in-store experience is crucial to securing customers in the home goods business, where they often want to see what they’re purchasing firsthand. The new stores are also helping with brand awareness.

“There’s a legitimacy and a mental availability that stores provide,” he said.

Sandy Gilsenan, chief retail and customer officer at Warby Parker, also talked brick and mortar, saying the eyewear retailer is opening 50 new locations this year with a focus on including services such as eye exams, which have become a key aspect of the business. “I think the loyalty really increases for the customer,” she said.

Major players revive quick commerce

After all the brick-and-mortar talk, Bob Hoyler, global insights manager at Euromonitor, offered a bracing data point: His firm predicts that online transactions will comprise 31% of all retail sales by the end of the year and hit 36% by 2030, while offline sales will decline 1.3% this year.

One factor driving these trends is the revival of quick commerce, which he defined as deliveries that arrive in 30 minutes or less. Hoyle explained that the industry all but collapsed in 2022, but now major players such as Amazon and Walmart are investing heavily in dark stores and other infrastructure to bring faster deliveries to customers.

“The reason we have to pay attention to this is just simply because of the players involved,” he said, adding that Amazon and Walmart are “the only players in the US that have the resources and scale necessary to support this type of model.”

Michaels’s loyalty program is key to new strategy

Heather Bennett, president and chief customer officer at Michaels, talked about loyalty programs, explaining why it now offers 9% in rewards for its top-tier program. The key insight behind the program was that Michaels is very aware that as a specialty retailer it is a “special trip” for its customers.

“We don’t have milk or eggs,” she said. “Somebody has to come out of their way to visit Michaels.”

With that in mind, what she’s hearing from customers is that the loyalty program is one of the big reasons they keep coming back. The company even A/B tested the offering, and found that those who received the benefit visited the store more frequently.