← The Glossy Podcast
The Glossy Podcast
Wholesale overhauls, AI strategies and more hot topics from Shoptalk Luxe in Abu Dhabi
00:29:10
Loading summary
Transcript35 lines
- [00:04]
A
Today's episode is brought to you by Alhena. In E commerce, customers rarely walk away due to lack of interest. They walk away because something's missing. A shade match. They can't confirm size. They're unsure about an ingredient question no one answered. Small gaps that quietly break conversion. Every day, Alhena helps brands turn these moments into growth. Their AI shopping assistant gives every customer a personalized path to the right product, answers questions instantly, and removes friction at checkout. Brands like Victoria, Beckham and Tatcha are already using it to create more revenue through increased average order values and conversion rate optimization. If you want to know more, visit Alhena AI. Hello and welcome back to the Glossy Podcast. I'm your host, senior fashion reporter Danny Parisi, and I'm here with our international reporter, Zofia Zvyglinska. Hello, Zofia. How are you?
- [01:03]
B
Yeah, good. Lovely to be back on again.
- [01:06]
A
Thank you for being here. You're our international reporter and you are very international. This week, as you are. As we're recording this, you are in a hotel room in Abu Dhabi, is that right?
- [01:16]
B
I am, yeah. For a very special event, Shop Talk Lux, which is the first time this kind of event is happening. Obviously, we all know the different editions of Shop Talk in Las Vegas and Barcelona, but. But this is the luxury one. So that's where I'm at and have been for the last couple of days.
- [01:35]
A
Yes, we've talked Shop Talk before on the podcast. Usually we send a glossy reporter to the various Shop Talk events. It covers retail and a lot of things that are relevant to us. A lot of fashion brands are usually there. But yes, like you said, this is the first Shop Talk Luxe. Is this also your first time in the uae?
- [01:53]
B
It is. I mean, I've been here on a flyover across to Asia, but never properly touched down. It's very new and very interesting to kind of see what the vibe is and the kind of different types of customers here as well.
- [02:10]
A
Yes. Well, you have been in Abu Dhabi for a couple of days now doing some reporting for Glossy. I think you have several stories on the site already that listeners. If you'd like to read some of Zofia's reporting from Abu Dhabi, you can check that out. But I thought for today's episode, I'd love to hear a little report from you of what you're seeing, what you're hearing from some of the executives in attendance. We can go through a couple of topics. You have some bullet points that you send me, and I have some reactions but let's just dive right in. What are some interesting things you're seeing? What are some of the big topics?
- [02:42]
B
Yeah, of course. So obviously with Shop Talk, it's still a very kind of tech focused and vendor focused event. So there's a lot about kind of AI integration. There's a lot of talk about kind of the different ways that you can connect parts of E commerce and the retail or in store experience too. So we've seen a lot of presentations around that too. And then finally, I guess the fact that we're talking about AI has also made it extremely, I guess, obvious that the human element has become so much more important. I think the more people that are talking about AI, especially on the efficiency and system side of things, the more the human side has become important on the brand storytelling, the way that people are thinking about campaigns, the whole store, relationships with customers. So I think every conversation that I've talked to people about has been about that. Just about how much humanity and empathy and just basic connection is needed when you're relying so much on the technology from that operations perspective. And obviously department stores too, and generally their future. There's so many different representatives here from international department stores. So there's some from Abu Dhabi, like the Childhood group, and then there's also some from London. So I think there's reps from CEOs, execs from Harrods and from Liberty's, and then obviously from the Asian side, there's Lane Crawford. And the CEO had a keynote session today.
- [04:22]
A
Yes. And Lane Crawford is Hong Kong based, is that right?
- [04:25]
B
Yeah, they've got some stores on the mainland too, but they're very kind of small and exclusive, kind of focused on specific high fashion designer collections and a very kind of high touch experience.
- [04:39]
A
Yeah. So between department stores and AI, which one do you want to dive into first? Because I know you have a lot to say about each one and so.
- [04:46]
B
Do I. Yeah, I mean, we can start with, I think the department store, because that's the topic that we've been talking about and kind of writing about for the last couple of weeks. You know, there's so much to say about Saks Global, but also I guess like the question of what the future of department stores is supposed to look like. And yeah, I've spoken to a good number of people to get a wide range of responses around this because I know that we were going to talk about it on the podcast.
- [05:14]
A
Yeah. So what are you hearing? Who did you talk to and what have you heard so far?
- [05:19]
B
Yeah, So I Wanted to kind of hear what it was like on the brand side first. So I spoke to Julie Bourgeois, Anine Bing and Alban Johansson, who's the founder of Axel, or co founder of Axel Arigato. And that for them it feels like it's been almost like a delayed reckoning for the department stores. They haven't had that much interaction with them over the last year because they've basically been seeing that this has been happening for much longer. And for them, I guess the demand for wholesale is still quite significant. So they're looking at other channels, but they're also being a lot more selective and specific when it comes to what they want from these wholesalers too. So all of those problems like over buying, the unrealistic volume expectations, that was something that Albin spoke about at length and that there was also this kind of mismatch between the inventory levels that they had and the actual demand from customers. So it seems like they don't really have stuff figured out on the shop floor. And obviously he said the kind of discounting that was happening in the department stores is also really hurting the brand because at a time when you're offering one price to your customers in store and on your own retail, a department store is basically undercutting you for quite a significant amount. So they've both been very, very controlled in terms of the way that they're managing those relationships right now. And it's still an important channel for them. They talk about, you know, how a lot of customers still discover, like the brand in a department store first, you know, seeing it among their competitors. But it's, yeah, that that relationship, I think, is, is becoming a lot more like, intentional. Like you have to be very, very pragmatic and very specific in terms of what you actually want from a wholesaler.
- [07:21]
A
Yeah, it's, it's interesting. I think the wholesale relationship, particularly on the luxury side, is something I'm interested in. I'm going to repeat myself a little bit from previous episodes, but the Saks bankruptcy, I mean, a lot of people that I talked to, analysts and experts and brands as well, all kind of said it was making them rethink their partnerships, their relationships with not just Saks, but other big department stores. I think a lot of brands are realizing that there can be some risk. I've heard from brands that kind of, like you said, like fewer, better partnerships, like we don't have to sell in every single retailer, every single door. And if the ones that we are going to sell in, we should like, try to have, you know, the most curated, the most kind of bespoke relationship. And I think luxury brands obviously have more leverage on that side. Did you get to hear anything from any of the department stores, like, anyone from one of those retailers?
- [08:15]
B
Yeah, I mean, obviously for the speakers who were up on stage, I think they're going to be quite glossy in terms of the way that they're presenting themselves. Obviously they are aware that I guess the customer is changing, and I think for them that's been pretty significant. They all say that the VIP or the VVIP section is still very robust. Both Michael Ward from Harrods and the Lane Crawford executive, like, both of them said that their VIPs and the things that they're doing for them are really working. You know, for Harrods, for example, they have, like, different personalized loyalty tiers for those vvips, so there's like different services and gifts and things that they offer them. And then for Lane Crawford, they actually bring in their top customers or top spenders once a year for a special event where the top managers basically talk to them directly and say, is there anything that you really don't like or you really do want, you know, from the experience? So I think it got pretty crazy because one of the guests was like, yeah, you know, I'm. I sing and I'm really good and I'd like to sing at one of your events. And she was like, yeah, yeah, we delivered that. And I was like, wow, that's. That's bold to do in a department store.
- [09:38]
A
That is bold. It's also. It's like. I feel like my immediate thought is sometimes what one customer wants is maybe the opposite of what another customer wants. I don't know if I would want to hear some random person singing in the store.
- [09:52]
B
Yeah.
- [09:52]
A
Even if that's what they want. But I don't know. I mean, it's interesting, though, because on the luxury side, I feel like so much of it for the customer is about, like, fulfilling those kind of special requests and demands. And a lot of what you're saying is interesting because I'm. I just came from NRF a couple of weeks ago, which is another retail conference, but it is. There were some luxury brands, but it was not focused on luxury. It was a lot more mass, and it was much more flashier and more of a hype kind of conversation than it sounds like shop talk. Luxe was. Seems like it was maybe a little more subdued. But I think for mass retailers, mass brands, the idea is you have lots of people coming in, lots of Volume at a lower price. And so it needs to be kind of systematized. Whereas luxury, it's lower volume and higher price and there's more room for some of those kind of one off things, you know, knowing the customers by name and granting special requests and things like that. So I don't know, was there a lot of discussion about those kinds of things for luxury retail?
- [10:55]
B
Yeah, I mean I think obviously the fact that this is an event that's happening in Abu Dhabi and kind of connected more to that super luxury tier, you know, slightly more European in view, has meant that I think a lot of that department store conversation is less about kind of the mass and focusing on that and more about like really tending to those VIPs that are basically like padding out your bottom line and maybe slightly less about the in store and the experience, which I think is a bit of a kind of missed opportunity because a lot of the times, you know, it's department stores aren't just a shopping destination, or at least maybe not like a super high ticket shopping destination for a lot of customers, but they're also just like an experience point. Like with Harrods for example, like all of their activations on the bottom FL mainly kind of tended to the mass consumer. Like you'd have cute little photo booths and fun visual things. I think for the Haruki Murakami Louis Vuitton launch that they had a couple of years ago, they did a big kind of visual display on the floor and I think it brought a lot of people in. And one of the luxury execs that I talked to, who's part of one of the the biggest kind of luxury groups out there, spoke kind of a bit more on background saying that that experience side of things and especially around kind of seasonal displays or making sure that the displays in store really do change up and interest people and attract people. I think that that was a big kind of thing that she thinks Sachs specifically is missing out on. That that kind of sense of newness sometimes is lost. You know, everything kind of moves really, really fast. And a lot of a customer who's kind of constantly engrossed in social media is going to want new experiences, new brands, new products. And a lot of the times they don't get that in a department store can feel quite stale, quite dated. And I think that's something that is really missing from that American scene. There's some experiments that the Lane Crawford stores were doing with major Chinese celebrities. Some things around styling and social media and live shopping, all of these Things, especially on that kind of social media side, I think are really missing from that department store conversation. It's not really something they've invested a serious amount of money behind and again, just kind of a bigger missed opportunity there. And considering, I guess, all the financials, why wouldn't you do it?
- [13:44]
A
I want to talk about something many retail leaders quietly admit but rarely say out loud. Most e commerce sites today still leave shoppers to figure things out on their own. And in beauty and fashion, that gap is expensive. Uncertain shades, uncertain sizes, endless search loops and support queues that bottleneck the whole experience. This is where Alhena steps in. Alhena build AI assistants that act like a product expert, a stylist and a support rep. In one place, customers can ask for an outfit, a skincare routine, a shade match, or help with an order. The assistant handles it immediately in the brand's tone on any channel. The interesting part is how teams use it. Some reduce support volume, others drive higher AOV through guided discovery. Many do both. And once it goes live, brands often realize how much revenue was left on the table because shoppers simply did not know what to choose. If you're thinking about how to improve conversion this quarter, or how to scale support without hiring, go to Alhena AI. You can see real examples, actual outcomes, and whether your store is ready for an AI assistant. On that note, it might be a good time to also talk about AI because again, coming from nrf, it was like AI everywhere. It was very much like in your face and also very consumer facing, which was kind of interesting to me. I'm wondering what the conversation was like at Shop Talk Lux, because I feel like the tone might have been a little different from what I was seeing.
- [15:18]
B
Yeah, I mean there's definitely some really new things happening in the luxury side with AI. So obviously like the E commerce site from Brunello Cucinelli that only just launched, Francesco from Brunello spoke to me about that and kind the way that it's modeled on neurons and synapses and kind of the way it works is very high tech and so that's maybe something that's consumer facing but definitely kind of more interesting. I think a lot of the other applications are very backend and kind of efficiency focused. Like the execs I spoke to from Laura Piana and Lacoste and Lux Experience, they all basically said that the AI portion of their business is ingrained across everything and you just have to make sure that it kind of works within all the teams and all of the people who are part of the company know how to use it. That's been a big kind of pain point is just getting workers to use it and people who are in the offices as well to engage with it. I don't think there's been that much kind of conversation around how difficult it is for people to just adopt it. And as a result with luxury companies, a lot of the times, you know, they're working with internal tools. So there's like a learning curve to that.
- [16:42]
A
It's interesting the, the use cases of AI that brands are finding and the way that they're thinking about those use cases are changing Again. Just thinking about my recent conversations at nrf. There were people there talking about how, you know, we were trying to wedge AI into whatever use cases we could find and a lot of them ended up like, not really working. I think somebody from Macy's was saying that they were, they were like, we're going to use it to summarize product reviews. And they were like, that should be easy. There's lots of product reviews. It's natural language, like, that should work. And they were like, basically it did work. It did what it was supposed to do, but it just like wasn't useful. It was like, okay, we already kind of had this information, you know what I mean? They kind of did it and realized it wasn't really worth that investment. So it's interesting to see what brands and retailers like find is most useful. I kind of think it being used in the background rather than on the consumer facing side is more like, seems better to me. Things like marketing and design, where the consumers are really going to see it is where you get people angry about, you know, like AI slop, Coca Cola commercials or something. I'm like, I feel like that's maybe not the smartest use. Whereas sorting through some boring backend spreadsheets and data feels like maybe a better use case. But I don't know. Was there anything specifically you heard from people about how they're using it or what use cases are most useful?
- [18:13]
B
Yeah, I think it's kind of what you said. You really have to pick what tools work for you, obviously, because shop talk is shop talk. A lot of the conversation is around your stack, so your tech stack and kind of what you've got in there, the number of different, different vendors and kind of providers. In normal people talk, it's just basically the number of different technology partners that a brand will have. Because most of the time if you're thinking about a brand and how it supposedly does all of these things itself, it ends up using a multiple amount of partners because they're the ones who are experts in that technology. So I think for luxury, yeah, it's always about just those backend things. Sometimes it is about maybe aggregating data if they have a lot of it. So kind of similar to what you were saying about product reviews. I think for Laura Piana, the exec there said that the way that they use it is to have store associates informed by kind of AI, natural language. So basically regular people talk. If a customer goes online and they research a product at Loro Piana, that information is stored. And then if they do multiple searches, they basically get a little database on that customer and what they're looking for. And if someone goes into one of their stores, that store associate who deals with them will have access to almost that search history and will be able to explain to them, especially if they have a specific interest, like sustainable clothing, like they've clicked on something on the site that showed that they will be able to kind of point or steer the conversation that way. It's about kind of knowing the customer and making sure that those AI use cases are really actually useful rather than just like adding on to that technical stack just for the sake of it.
- [20:12]
A
Yeah, it definitely feels like it's easy to get blinded by how new and shiny it is and not realize that whatever use case you're trying is maybe not really worth it. It's interesting that kind of similar to what we were saying about department stores, a lot of the luxury focuses on the customer and making these kind of unique experiences for them. It feels like again, very proper for luxury compared to NRF where it's like, you know, how do we use AI to get as many people through as possible? Very high volume kind of play. Did anything surprise you about some of the AI conversations there? Like anything you weren't expecting to see that you did?
- [20:54]
B
I mean, I think the biggest thing is just like how like every day the problems are right now in luxury. Like a lot of it is just simply making sure that all of the different ways that a customer experiences a brand, for example, are connected or the fact that you're able to kind of track that customer across different countries if they're traveling. Like, that's something that you'd think that is very obvious. But still problems that luxury brands are having right now. And I guess the focus on emotion and kind of that human in touch, like again and again it was something that was emphasized. You know, you had execs from, from AMOUAGE which is like obviously the high fragrance brand that I know that glossy has done some coverage on. On the beauty side, like they were talking about the. The like fragrance blocks that they had in their stores and the way that the stores were designed to kind of feel very interesting and kind of art focused and like how it was all about kind of emotion. So I think, like, that's been the most thing is just like for me, Shop Talk over the last couple of editions has really been focused on technology. And I think especially this one has just been like, yes, we have the tech, but to actually improve the brand or make sure that it's interesting and unique and kind of something that people actually want to visit, that AI has to stay in the background and everything else about storytelling, brand history, the retail experience, store associates, that's the most important stuff.
- [22:35]
A
Yeah. So outside of AI and department stores, which I think were two kind of big themes, any other interesting things you saw or heard from people at the event?
- [22:46]
B
Yeah, I mean, I think the biggest thing that I've seen, and obviously we've been talking about this in our Glossier 50 nominations, I think in a lot of the topics that we've covered previously. But luxury itself, I think isn't becoming about the brands anymore, or at least less so. I think a lot of it. Considering the fact that Couture week is going on right now and there's still so many amazing creations and private collectors and clients that are oohing and ahhing over that, it still seems like the majority of what people consider luxury to be nowadays is about experience. So quite a few of the speakers at Shop Talk Luxe were from the hospitality world. So obviously you had Mandarin Oriental, but you also had kind of Philip Zuber from Kirzner, who owns these amazing boutique luxury locations and some really big hotel groups like the Jumeirah, which is the tallest hotel in the world. All of these were the main inspirations, I think, for luxury brands right now. And the approach that they have to experience and building that experience and making sure that that is the most interesting thing. I think Philip Zuber from KSNER said that he was talking about turning moments into memory, and the whole thing that he was thinking about was this return on emotion rather than return on investment, which I thought was a fun way of looking at it, considering we talk about ROI all the time now. It should be roe.
- [24:27]
A
Hmm. It's interesting. It feels like I was gonna ask you if you could sum up the event in like, one theme, but I feel like I'm getting one and tell me if this is right or wrong in your opinion, but it feels like a focus on the kind of, like, individual and human and like the unique and the bespoke at a time when there's, you know, a lot of ways to, you know, spray tons of information and, you know, products out there. And it seems like the conversation at Shoptalk Lux was. Was about narrowing and being more focused and elevating.
- [25:02]
B
Yeah, I think that's the biggest thing is just like there's so much product and brands out there that if you don't have something that's really differentiated, really different from either your competitors or kind of the wider industry, customers just won't choose you. And I think that was the biggest takeaway. If you have something unique, you need to be staying in that lane and just focusing 100% on that. So, yeah, I think the, the exciting Designers Couture Week would be a good one to take inspiration from. Maybe like Robert Wun would be a really good one.
- [25:37]
A
Yeah. I have one more question for you before we wrap up, but if this didn't come up at all, and I didn't prepare you for this, but were there any discussions about generational changes in terms of Gen Z or younger consumers? Did that come up much at all? I'm curious how that factors into the luxury side.
- [25:58]
B
Yeah, I mean, it definitely did come up in terms of social media, and I think that's the biggest side of things. Obviously, we've talked about a little bit department store kind of lagging behind on the social media side and addressing those customers. I expect that a lot of the behaviors that we're seeing around kind of experience and humanity are also driven by younger customers. Just because they want something that's new and different. It just might look a little bit different in approach to a legacy customer who's been with the brand for 20 years and just wants something different to what they've experienced before. But I think those younger luxury customers are equally demanding, and they don't just want the product, they already know the product because they've been searching it online on social media and that's been the way that they discover it. So by the time they're in the store or by the time they're actually experiencing the brand, they want something different. They want to be brought into a brand world. So I think a lot of the conversations that had on the panels, all of that was more about how do you build that experience and make it interesting for Gen Z. So a lot of talk about community building, interesting, fun experiences. I think Albin from Axo Arigato said that he had done some community experiences in Paris around chess, and I was like, wow, that's actually really cool. You don't really see chess being involved in fashion that much, unless it's like through some Netflix series or something.
- [27:33]
A
Yeah, I think that's all the time we have for today's episode, so we should wrap it up there. But Zofia, thank you so much for traveling all the way there and giving us a report on what you're seeing. Like I said, you have written several stories on the site already, so if any listeners would like to see more of Zofia's coverage of Shoptalk Lux, you can check it out there. And I hope you make it back to the uk if you.
- [27:56]
B
Thank you. Yeah, flight tomorrow. Let's see. Safe and sound.
- [28:03]
A
And thank you for listening to the Glossy Podcast. Don't forget to give us a rating and a review on Apple Podcasts or Spotify, wherever you listen to this, because that helps us out so much. And don't forget to subscribe to the Glossy Podcast to hear interviews with industry insiders and weekend review segments where we break down the news. The new episodes come out every Friday. Until the next time, thanks for listening.