Ep. 15 - Retail Innovations 21 - Global Retail Trends & What Leaders Should Do Next

Retail is changing in a way that feels bigger than the usual trend cycle. Agentic AI is arriving fast, automation is accelerating, and shoppers are raising the bar on convenience, values, and experience all at the same time. I sit down with Mara Devitt, senior partner at McMillanDoolittle and a leader in retail strategy and innovation, to unpack what the newly released Retail Innovations 21 report reveals about where retail is headed next.

We walk through how the report is built from more than a hundred global nominations and why the best retail ideas are not confined to the United States. Mara breaks down the three themes that rise to the top this year: Better World, Easy Journeys, and Engaging Destinations. You will hear practical examples of sustainability in retail that is truly embedded in the business model, including Droppie in the Netherlands turning recycling into a rewarded storefront experience, an inclusion training program in Italy, and Rebread in Poland upcycling unsold bread into new products.

From there we dig into AI in retail that actually reduces friction. We cover H and M’s connected fitting rooms using RFID and AI to improve conversion and service, plus an AI-powered supermarket concept in Singapore designed to lower cognitive load and make shopping simpler. We also tackle what agentic commerce means when AI starts to sit between the shopper and the product decision, including why structured product attributes and clean machine-readable data become essential, and how retail media may evolve beyond classic ad placement.

If you want a clear set of leadership priorities for the year ahead, we close with three actions to start now: rethink AI for growth, embed purpose into the brand, and modernize the store fleet with the right “store of the future” components. Subscribe for more, share this with a retail leader on your team, and leave a review with the one retail innovation you think will matter most next.

Transcript

SPEAKER_00 0:08

Hello everyone and welcome to the digital front door. I'm Scott Benedict. You know, today's episode is a special one because we're diving into a newly released report called Retail Innovations 21. It's a global report from my friends at McNullad and uh their partners at the Abeltov Group. And the study brings together some of the breakthrough concepts from around the world and highlights and best practices, I think, of where retail is headed next. And as I tell anybody to listen, the best practices of retailing aren't always in the United States. Many of them are, but it's exciting to get great ideas and best practices from around the world. So joining me is Mara Davitt. Mara is a senior partner at McMillan Doolittle, and she's a longtime leader in retail strategy and innovation. She also serves on the Abletoth group's board and helped us shape some of the perspectives around this year's report. And I'm excited to have her join us today. Mara, please uh welcome and thank you so much for joining us today.

Why This Edition Feels Different

SPEAKER_01 1:15

Well, I'm so glad to be here, especially to talk about Retail Innovations 21.

SPEAKER_00 1:20

Indeed. So this marks, as the name implies, the 21st edition of this Retail Innovations Report. And I'm curious about from your perspective, what makes this year's edition different or special, or what signals should retail leaders really pay attention to as they go through that report?

SPEAKER_01 1:40

Well, I think it's the time we're in right now in retail. Um, that's what makes this 21st edition different, is the level of structural change that we're seeing in retail right now. I mean, retail is always evolving. That's why so many of us love working in this industry. But this year really feels like a pivot point. Um, we've got the rise of agentic AI, we've got the acceleration of automation that we're seeing everywhere, and certainly the ongoing shifting in consumer expectations about how they want to shop. And it's converging all at once. And so, as we note in the report, success today requires not just operational excellence, but truly imagination and innovation and fundamentally courage to rethink how we do retail. And that's what I think you're gonna see in um the report as you read it and the one the various concepts that we included.

SPEAKER_00 2:42

Yeah. And I think, you know, I made the comment earlier that not all of innovation in retailing occurs in the United States. And I think sometimes we think that some of the things that we're seeing, oh, those are only going on here. They're in fact some some global trends, are they not?

Three Themes Shaping Global Retail

SPEAKER_01 3:00

Absolutely. So the way we do this report is we actually put the word out globally to all of our members to actually come up with and introduce and nominate different concepts that they see across the world that they feel are truly unique or innovative in some way. And then we bring those literally over a hundred uh nominations together. And then we look at those and say, well, what are the themes? What are the themes that emerge? And what there are three emerge this year. You know there's usually between, you know, three and five every year. And this year there's three. One, which is a continuation, which we've seen is a better world, and that's really reflecting how companies are building in their customers' values into their business model to serve them in new ways. So it's truly about sustainability and inclusivity, but in a uh truly integrated way. The second one is easy journeys, which is truly how are retailers leveraging the, you know, the AI, the automation, the new ways of serving customers to remove friction uh across channels and personalize the experience. And then the third one is engaging destinations, which really captures this idea of how do we reinvent physical retail into an experiential and emotional uh type spaces. So those are the three themes. And overall, it's really this shift from that we saw of retail is not just selling products and services. It's really about how do we reduce that cognitive load on consumers, create a connection with them, and really meet them and deliver on the values that they find important. So we're seeing that's really those three themes for us this year.

Better World Concepts That Work

SPEAKER_00 4:59

Yeah, and to that end, one of the things that that stood out to me as I was reading through the report was how so many of the concepts that you and the team highlighted embed things like sustainability and positive social impact. Some of the companies really integrate that into their business model. It's not just a marketing theme, it's part of how they think, how they're wired, and how they approach serving the customer and their community. I'm curious, what are some of the examples from the report that maybe illustrate that shift the best in your view? And what should merchants, as they're reading through, kind of take away from some of these best practices that you and the group found in your research?

SPEAKER_01 5:45

Well, I guess one of my favorites to highlight is a concept out of the Netherlands called droppy. And it actually turns recycling into retail. So it really takes away all the things we don't like about recycling, which is, you know, it's a hassle to sort, it's a hassle to drop it off. You never know what happens, literally, is this, and you feel like it's a hassle. So what Dropy has done is they've created these really uh engaging storefronts in convenient locations so you can bring your recyclables and things that we can generally aren't able to recycle, like apparel, consumer electronics, um, you know, packaging, really easy. Drop it off in a lovely space, and then you're instantly rewarded on the app. So it's truly is building recycling into the business model. So that's one I would highlight. The second is out of Italy and it's uh decathlon. I'm sure I'm gonna say that incorrectly, but you know, the the big, the big chain, global chain. And um in Italy, they've got this really interesting inclusion training program where they are really focusing on how do we take individuals with cognitive disabilities and using a specialized program actually engage and um have help them enter into the workforce. So they've developed a comprehensive training program with mentorship, with uh app-based training, uh, and a number of different aspects that have been truly successful over time and have really given them uh the access to a new workforce, and it's enriched those lives as well as the lives of their overall business and associates as well. And then I guess the third one, which I think is quite interesting, is a concept called rebred, and that is out of Poland. And you know, so we see Europeans taking taking the lead in in this area, but uh Poland the rebred concept is actually taking unsold bread and gathering that back from various outlets and then using new uh biochemistry techniques to actually reuse that bread into beauty products, into other sources of protein and fiber. They uh are developing new beverages that are protein enhanced or new types of kombucha that the source product is truly um from you know your local grocery store or bakery or other areas that don't um that have unsold product. So another great example of reuse that we're seeing. But uh I guess the lesson lesson for merchants here is really about um, you know, thinking about sustainability. Are we really using it and embedding it in how we source, how we design our products, how we um use our models, how do we support our labor models to actually be more efficient or be more inclusive? So those are the things is to really be more thoughtful around the uh the products we're selecting and selling, and how can we extend the um the work that we do to be more focused on that better world concept.

Easy Journeys Through AI

SPEAKER_00 9:18

That is that is so neat, and and those innovations I think are are so exciting because it's not just something that a retailer aspires to have a positive impact. They've woven it into the business model in the ways that you described. That is that is so interesting to me. I I think you know, we can't have this conversation without AI finding its way into the discussion. And certainly I think it fits in the themes, uh, one of the things you talked about, which was easier, easier journeys. Uh, I I'm I'm curious about, you know, from conversational commerce to AI enabled stores and virtual assistants and things like that. How should retailers think about this this concept that you you and the team highlighted of the easy journeys, and how do you do it without, you know, kind of losing your brand identity while you're bringing technology to bear, hopefully to benefit the customer as well as your own business?

SPEAKER_01 10:18

Um, yeah, it's a tough one because AI certainly is everywhere. And the question now isn't um, you know, where are you using AI? It's how are you using AI in this case for Easy Journeys to really remove friction from um from the journey and making it easier for customers? So a couple of examples of I think companies that are doing that really well that we highlight in the book. The first is H ⁇ M out of Sweden. So what they did, they thought, you know, what is a pain point that our customers have? And it's a pain point for us in terms of conversion, right? It's the customers stuck in the fitting room with no one to help them or not really um limit, their options are limited, they're in a little box of uh their access to the assortment is limited. So um that uh they've come up with this connected fitting room concept that they're trialing uh in some of their locations in Sweden where they're using RFID and AI together to make this commit connected fitting room. So when the customer automatically brings, you know, they brings in a product, that system knows what product they have because of the RFID, and it can actually go out and identify other items that the customer might be interested in and present that to them in the fitting room, right? So it goes beyond, you know, we've seen this in the past where customers can search the endless aisle, but this is actually providing them with um ideas that they can then select. And if it is in stock, that it sends a message to our associate to bring that product in. So again, it's truly a connected bidding room, and we're using AI here to enhance the brand to really uh to really bring it to life. And then on the flip side, another one from Singapore that we're seeing is uh fair price. So again, very digitally savvy consumer there, right in Singapore. And they've come up with an AI-powered supermarket, they're calling it, at one of their locations in Singapore. So they've got smart carts, you know, which we see here, but they've got AI assistants that really help simplify the navigation and help the customer find the things, you know. So leveraging ESLs and the technology that now we see more commonly in it commonly in store, but taking that to the next level. So encourage anyone visiting Singapore to take a take a look at that if they have that they have that opportunity. But it's clear that, you know, easy now and how we can leverage AI here is to help our customers have to make fewer decisions. Um, what we call lowering the cognitive load. So just making it, you know, your head not have to work so hard when we go, when we go shopping. And also personalizations to get better. So um those are the the kind of key levers that we're seeing, and certainly how uh our retailers can be using those today.

Connected Fitting Rooms At H And M

SPEAKER_00 13:39

Yeah, and it feels like kind of a sub-segment of that is is the the rise of agentic commerce and all of that means not only for the for the consumer, but for the retailer and for their brand partners. And one of the the cases in the study that caught my attention will involve the evolution of agentic commerce and where AI starts to sit between the consumer and the the product decision. And I and I'm kind of curious, how do you think this technology, this capability starts to reshape not only discovery, but merchandising decisions, retail media strategy? How how do you think that that starts to to kind of change things and how fast do you think we're going in that direction?

AI Supermarkets That Reduce Effort

SPEAKER_01 14:27

I think it's happening so quickly. Um as you probably many of um the folks listening to this podcast have been thinking about their own behaviors and how they changed, where it went for you searching on various sites to now asking your um your LLM or whatever you use to actually say, you know, I need a gift for this person and describing them, and all of a sudden it comes back with three options, and now we can actually shop. So it's this can be truly transformational into how customers are shopping. And we were just beginning to see this in um retail innovations 21. So this is my teaser for retail innovations 22, because I think it's gonna be really interesting to see the impact this year because it's happening so quickly this year. One of our examples style DNA is truly at the beginning of an agent shopper uh app that is you know branded differently but enables um you know truly personalized shopping at scale. So seeing those for next year, it's going to be it's going to be really interesting. But what retailers need to be, and especially merchants, need to be thinking about right now is how do they provide structured and very rich product attributes in clean, machine readable formats so that the agents can uh can discover these products. So again, working now proactively to truly make sure that that consumer who's trying to reach you through this new channel that you're serving them also. So it's truly thinking about this as a real and new channel and retail media, uh that is a true, true change. Um, we're really going from you know, displaying ads. Will we be displaying ads? Um how what does paid placement or other placement look like? But again, how do we the fundamental, especially of retail media is how do I leverage the great information I know about the customer to bring them the brands that matter most for them that they and incent them to purchase? So I think it is going to be a uh digital front door is uh moment, a digital front door moment, that's for sure. And it is happening, happening really fast.

Agentic Commerce Changes Discovery

SPEAKER_00 17:08

It it is, and I and I think that's that's first of all, it wasn't an accident that we named our podcast series that because we we saw this coming. I think the evolution, though, to your point, has happened faster and faster. And and I imagine when this report comes out a year from now, there are going to be numerous examples. I I could I could imagine of people starting to innovate and starting to do this in some really neat ways. Uh, you know, the the the third area you mentioned was engaging destinations. And we've we've heard for years this this topic or this conversation about stores needing to become physical stores needing to become more experiential uh hubs. And this the report shows some examples of that happening, not only happening, but happening at scale. And I think one of the things I I was interested in your perspective is what distinguishes a really engaging physical store, an engaging destination from just a good uh uh and solid retailer and what you learn through this through this process.

Stores As Engaging Destinations

SPEAKER_01 18:13

Exactly. So it's definitely more than just having a nice store, right? That's table stakes today. Please give us a nice store. But we find uh really three key characteristics of these truly engaging destinations, and there's a lot of great examples in the book this year. Um, the first is it truly creates a reason to visit beyond a transaction. So we have this uh example Area 51 as an example in um Las Vegas, which I'm hoping to see when I'm in Las Vegas later this month. And it is this destination location that uh blends nightlife, entertainment, food, re retail, immersive experiences together into this constantly evolving environment. And we're starting to see more and more of these um, these types of destination areas that are truly getting people out and away from digital and away from their screens into being with other people in an engaging, in an engaging way. So that's one is a reason to visit beyond the transaction and a reason to really uh get into a physical space. The second is an emotional connection and making truly memories and building memories. So we've got this example, Mecca, uh, that's a five-store beauty flagship that's integrating education and services with the product in a really experiential way. We've got Print Hobbs, which again, I'm with my American accent trying to say that so bad. Um, their outposts that they've just built in New York City in the financial district that is so worth a visit if you're in New York. That's this beautiful cultural immersion into uh French fashion and brands in this beautiful setting with amazing uh the store associates in there are so knowledgeable about the history of the location. They can walk you through then the product. So it truly is an experience and certainly a memory, and it certainly is um gonna be it's a place I highly recommend uh as an example because it's so engaging and uh memorable. And then the third is it really needs to function as a brand world, just like you know, I said Print Tom. So now I want to go visit when I go to France. Now I understand their brand. But you know, you've got Popmart, which is actually fairly new here in the US, unless you're a Le Boo Boo Dow fan. Um, but it's a um their landmark store truly turns their collectible offering into uh cultural participation. And we've seen so many of those where it's truly bringing the brand to life in a way that that um you don't see in a in a typical store. So those are the three creating a visit to beyond the uh train, a reason to visit beyond the transaction, building an emotional connection and memory, and then really bringing that brand to life in a in a way that you can't do in uh just a digital format. So it's kind of a destination that's I'd say uh generating demand, not just fulfilling demand.

SPEAKER_00 21:43

I and I think that's one of the big takeaways is that the purpose of a physical retail store is not just to conduct a transaction, it's to create a relationship with the consumer, and perhaps they have an opportunity to learn or engage in ways. That they didn't know that they necessarily would on their way in the door, uh, but it creates a very memorable experience. And that's part of the fun, I think, of those of us who've chosen careers in retailing. Absolutely. Is it it's not everything is a transaction. And it reminds me that you know, the nature of this of this study is it's it's global and it highlights concepts from all markets all around the world, many of whom have different customer expectations, different regulatory environments. And I'm curious then, as you as you go from the lens of creating this study and these great examples from markets all around the world, you come back to North America, uh, you know, from your lens uh as a consultant, what what kind of advice do you do you give to clients of yours here in North America based on some of these great concepts and these great ideas that you see in other parts of the mirror?

Translate Insights Do Not Copy Formats

SPEAKER_01 22:59

Yeah, so that's truly, I think, one of the strengths of the Abletop group is to combine this global expertise with local market insight because it's that translation to local market that makes um that's I think so impactful. So the mistake we see retailers make is they see a format and they're like, oh, that's great, and it works there, and then they literally copy-paste and try to make it work here without truly understanding what is the underlying insight. So, as an example, you know, you'll see some uh concepts in there that are really in from Japan that are all about automation, really amazing uh levels of automation that they're able to get in the store crowd. Well, it's truly was a response there to labor challenges that that they're facing. Um, you know, Singapore, the example I talked about, which is the fair price store with their AI grocery grocery model, does work because it's a digitally mature market, which is very unlike some of our marketplaces here. Or you'll see some examples in there about the logistics platforms that some of the companies in South Africa, some of the concepts from South Africa are providing. The they're really solving for uh access inequality across their country. So you see those three things, you know, Japan, Singapore, uh, South Africa, and you think about well, how does that apply here? So what you need to really ask is, or the retailer needs to ask is what problem is it solving in its home market? Well, what's the equivalent friction that that is here? And then how do we solve that uniquely here, either with aspects of that concept we saw as successful elsewhere, or new ways of thinking to solve that problem here? Because we certainly have access inequality, we certainly have buckets of digitally mature consumers, and we are certainly facing labor shortages, especially in some key markets. So it's really about translating insight, not replicating or duplicating some of these formats.

SPEAKER_00 25:25

Well, that makes a lot of sense. And that brings me uh very logically to the last question I wanted to ask you. Obviously, McMillan Doolittle is an advisory and consulting group. And uh and so your job at its essence is advising retail leaders on how to improve their business, how to get their business ready for the future. And I'm curious, as you sit in front of uh retail executives, are there two or three kind of leadership priorities or challenges that you would give them based on information in this report and things that maybe they should start either doing or thinking about right now to kind of set themselves up to be successful as we go forward, not only into this year, but into the into the future.

Three Priorities For Retail Leaders

SPEAKER_01 26:13

Yeah, there's really uh three priorities right now. And the first one will not be a surprise to anyone listening to this, and it's about AI, right? So the time is now, if you have put it off, but the time now is to really think about um what's the impact on AI in my business? Let's make sure that we internally in the business we have a clear understanding of how we're using it internally to enable growth. But now is the time to really rethink AI and begin to think how do we enable our business through AI? How are we being prepared properly for the role of agents? And then how do we use it to reduce friction and you know, make those journeys easier for our customers, like the HM is done in the fitting room as an example. So, number one is really thinking and rethinking AI at this point. The second one is, you know, we've been talking about it a long time, is really thinking about your values as a company and how you embed that and communicate that portion of your brand. So we really do think this better world is becoming more important, especially with younger consumers. All the research shows it. So it is time to really begin to think about the purpose and embedding purpose in your in your model. And thirdly, it is we are having so much change. So, store of the future, rethinking physical retail, and we don't have to reinvent every store, but really think about what are the components that we can fit in today to that store fleet we already have, as well as as we consider build and remodels, what is the best way to actually uh get the most out of our real estate assets that we have or where we want to expand new formats physically. So again, retail is as exciting as ever, changing faster than ever. It's a great place to be. But that's what that's what we're talking about.

Where To Get The Report

SPEAKER_00 28:14

That is awesome. Marl, this has been a fantastic conversation. I really appreciate you walking through this report. Like I told you earlier, I I look forward to this report coming out every year. I've I've been monitoring it since it came out in a physical form in a book every year. And now it's digital, obviously. But I I the thing I wanted to share with our audience is for everyone listening, if you want to dive deeper into these concepts that Mara has touched on, including the case studies from around the world and maybe some of these really awesome practical innovation examples, you can access retail innovations from McMillan Doolittle and Ebletoff Group. And the link that we have up on the screen, we'll also include that in the show notes if you don't catch it. But as always, Mara, thank you so much to you and to the team at McMillan Doolittle and that and your colleagues at the Ebletoff Group for this great and really valuable story. I always learn so much from it, and it just reinforces what I was taught throughout my own career is that the best practices aren't always in the United States. There's so much to learn from retailers around the world. And I think you and the team prove that every year when the new edition of this report comes out.

SPEAKER_01 29:26

Well, thank you, Scott, so much for having me. And uh I really appreciate the opportunity to be able to talk about retail innovation.

SPEAKER_00 29:34

Absolutely. All right. Well, thank you again. And for the digital front door, I'm Scott Benedict. Thanks for listening.