The Uncommonist: Highlights from Day Three of the ‘Big Show’.

By Andrew Smith | Jan 15, 2021 | 0

The power of vision to reshape retail and the consumer experience

Thursday, January 14th
11:00am – 11:45am
Marvin Ellison, President and CEO Lowe’s
Matthew Shay,
President and CEO NRF
Niraj Shah, CEO, co-founder Wayfair
Matthew Townsend Bloomberg Editor 

Andrew’s Take

First up was Marvin Ellison, a Big Show regular and established retail legend here in the US.  As CEO of Lowe’s, he spoke passionately about their commitment to look after employees in the challenges of 2020 right down to the casual associate level.   It was a year where they focused on ensuring that everyone was being looked after, whether it be with healthcare or ensuring a transparent commitment to support as much as possible.

He also described how the fact that their diverse leadership team meant a strengthening of their commitment to diversifying all parts of the business.  Suppliers, supporting local minority owns businesses, and more.  These commitments and the set of values helped form a program called “Making it at Lowe’s” to support the community during the pandemic.  They got one of the Sharks from Shark Tank, 1500 applicants, entrepreneurs who have a dream to get their product on the shelf of a major enterprise, and had a series of supportive episodes to decide who makes the cut.  Through the whole process, they got 400 entrepreneurs who were able to get products online or in store, and the top 5 got access to larger suppliers, investment, and the Lowe’s team to support them grow.  They have committed to do it again in 2021.  Marvin also commented on the importance of small businesses to the US Economy. It is “built on the back of small businesses”, so they carved out $55m to support diverse, women owned, rural businesses.

A major highlight from me was Marvin’s description of the use of technology and what makes the best innovation.  He said that the most effective technology is behind the scenes.  Reduces friction, makes things easy.  Innovation is focused on making things as simple as possible.

We then moved on to Wayfair – an online pure play in the furniture and homeware space with $14b expected sales this year, and a valuation of $24b.   They originally focused on a series of websites across the furniture sub-categories of home, décor, improvement, furniture, etc.  First category of tv stands and speaker stands they then went on to create 250 different websites covering all of these different niche’s.  Eventually they saw the value of creating Wayfair to consolidate that experience.

Niraj described the brands commitment to delivering on the “human desire of great service”.  The team is made up of 10k people who work across customer service, 4k in logistics, 7k corporate folks, half are software engineers, data scientists, product managers, etc.  Different roles than a traditional retailer, with a major focus on data science.   But amongst all of this was one big nugge  “We always start with a human need.  What is the experience people want us to create, rather than what we think we should create”.

Niraj was asked about what was the big unlock of growth – he used an analogy and described ecommerce as like an athletic competition that rewards a balanced athlete.  You might be great at merchandising, but not logistics, or great at supplier relationships but terrible at tech.  Whatever you’re not great at slows you down.  Great quant marketing capability doesn’t make up for us having bad merchandising.  All of these things are individually important, but the aggregate of them that makes a great experience.  He said they’ve spent years building the aggregate.

Asked to take his crystal ball out of the top draw, Niraj’s big predictions for the next 3-5 years was that some of the categories that are most advanced online, e.g., technology or office supplies (50-60% online) have been consistent, but now and increasingly so, other categories are getting more comfortably bought online.  Consumer behaviour is being shifted by experiences, especially in 2020.  A fascinating example he talked about was a new screen they are testing in their office where you can run your hand over and feel what the fabric feels like.  That could be the screen on your phone in 3-5 years opening up new categories that could be move more online.

Gareth’s Take

This session consisted of two separate interviews with two very different but equally impressive CEOs

The first interview is with Marvin Ellison. The first thing he talked about was doing the right thing during the pandemic and social unrest that have pervaded the USA in 2020. Lowe’s have invested over $1.1 bill. in associate and community support. These benefits have included free telemedicine programmes for associates and $700mill in bonuses.

In addition, they have introduced specific programmes to enhance supplier diversity. “Making it with Lowes” was run like the “Shark tank” TV show. 1500 entrepreneurs applied to get their products on range. 400 were successful. 5 stood out and were given access to grants, to the merchandise team and to key suppliers. Lowes also gave $55mill in grants to small businesses to help them survive in the pandemic.

Marvin said surviving the pandemic from a business point of view was due to a decision Lowes took two years before to focus on the core. “Every decision we make is focused on what’s in the best interest of our customers”.  It’s not focused on what they can do to beat the competition or predicting what’s going to happen in the macro environment.  One of the key questions was how could Lowes give customers the option to shop in any way they chose? Which led to multiple Omnichannel initiatives. Another example is “Total Home” which provides everything a customer might need for a remodel of a kitchen or bathroom etc. including products that are not traditionally associated with Lowes like textiles.

On top of that it all innovation deployments need to be seamless for customers. “The most effective technology is the technology that nobody sees”

The second interview was with Niraj Shah. He first talked about the long history of Wayfair which began as a series of websites that brought ecommerce to a large number of home goods subcategories. They got up to 250 of these before they were consolidated under the Wayfair brand in 2011

Wayfair think of themselves as a tech company because “If you embrace technology you end up doing things you wouldn’t otherwise do”. Of their 17,000 people 3,500 (roughly 20%) work in IT but most of that is in functional parts of the operation. Niraj gave the example of how they use natural language processing (NLP) in annual reviews to uncover unconscious bias in manager communications.

Wayfair has grown tremendously in recent years. In 2010 revenues were US$1.1bn while in 2020 they will be US$14bn representing a CAGR of 40%. Niraj says the big unlock of revenue was achieved by deciding to apply technology to every part of the company to improve processes and service. In retail you are only as string as your weakest link. For example, having a great website doesn’t compensate for having poor logistics or having great marketing doesn’t compensate for having a poor team. Everything needs to be great to win.  “Customers tolerate poor service only if they have no choice”

Surviving the pandemic was a question of “Be Prepared” Wayfair had already invested in great talent and technology which helped with their ability to pivot when the pandemic came along. “You have no time to catch up in a crisis”

Niraj thinks one of the lasting effects of the pandemic will be an ongoing switch to online shopping. “You have to try something before you know if you like it” and many consumers have now tried online shopping in the homeware’s category and others for the first time. Developments in technology will keep making the online experience even better in the next 3-5 years.

 Session rating 9/10 (Must See) Two great leaders with a clear vision for their businesses and an emphasis on execution.


Create a new retail world through experiences your customers value produced by SAP

Thursday, January 14th
Melanie Noronha,
Senior Editor, The Economist

I often talk about the importance of understanding the difference intuition or objectivity and the different times they are needed.  A lot of people see broad themes forming in the world of shopping behaviour across channels after a year like 2020.  The Economist’s Intelligence Unit ran a study, led by Melanie Nornha, to put some objective measures of the changes to help us understand it more.

The Economist is publishing an online tool that helps them explore a heap of data they’ve collected from a study of consumer trends, buying behaviours and spending.  Baby boomers make up the biggest chunk of increased online spending share 25 – 37%, Gen-X who increased their share of spending online from 39% to 47%.  Found that essentials saw expected growth as they already had strong foundations, but non-essential retail has seen significant increases in online sales far exceeding the average pitch.  Research shows that once restrictions ease, the online shifts are less elastic (i.e., will remain at these levels or see a small decrease), but much more elastic for Baby Boomers online share we saw in 2020 will decrease 9 and 6 percentage points, and only about 4 points for Mill and Gen Z.

The tool sounds amazing, so I’d go check it out.

The Uncommonist Rating 7/10 (Worth a look) – I’d say go check it out, even if just for the first 15mins of hearing about the study by Melanie and the team so we make more informed decisions on direction.


Luxury goes digital: Understand how Alibaba and Moschino are driving new innovations.  

Thursday, January 14th
Featured Sessions
Christine Fontana,  Alibaba, Head of Fashion and Luxury, Tmall Luxury Division
Kati Chitrakorn, Vogue Business, Retail and Marketing Editor 
Stefano Secchi, Moschino Spa, Managing Director 

 This session focussed on the Chinese luxury market particularly during the pandemic.  

Chinese are the biggest buyers of luxury in the world. Stefano said for Moschino they already represent 60% of his business and he expects that to rise in coming years. Until recently they bought predominantly while travelling but during the pandemic that has changed to buying when at home.  

The average Chinese luxury buyer is much younger than the rest of the world. During 11/11 70% of the luxury buyers were born after 1990. The young like luxury because it gives them a way to express their identity 

The young also like digital and they like shopping online so to be successful in the sector in China you need to have a strong digital offer.  

The other factor is authenticity which includes not trying to apply western cultural norms on to Chinese buyers. Stefano admitted that luxury brands had made many cultural gaffes in the past. It’s now very important to understand that in China things are handled in a different way.  

 Session Rating 8/10 (Must See)  Very realistic and helpful insights in to doing business in China in the luxury segment.   


Business agility through digital strategy: Dick’s Sporting Goods’ perseverance during the pandemic  

Thursday, January 14th
2:45 PM – 3:15 PM EST
Jay Pisorkorik , Dick’s Sporting Goods, Director of Platform Engineering
Allen Terletto, Redis Labs, Field CTO 

 Great session and my pick of the sessions at the Big Show so far. It focused on Dick’s Sorting Goods performance and response to the pandemic. Dick’s has grown sales and market share during this period. 

Jay said the foundation for Dick’s success in 2020 was a decision they took in 2018 to go back and re-focus on the athletes (their customers). They decided nobody knows their athletes better than they do so they decoupled from the big software platforms they were then on and went to open source. 80% of applications and website are now written internally. They don’t do everything themselves for instance one of their key needs was to protect their business and athletes by deploying a seamless multi cloud environment and that’s where Redis came in. he called out a number of other key partners including Microsoft 

Because they do their own development they were able to react to the pandemic quickly. They already had BOPIS but needed to develop contactless curbside pickup as soon as the pandemic hit. This was developed in less than 24 hours in v1.0 with v2.0 in market less than 12 hours later 

The pandemic meant that they went from 900 stores and 1 DC to 1 store (online) and 900 DCs.  Had to adapt  the way inventory was presented to athletes so that they could see where the stock could be picked up from. Customers were prepared to drive to a store with stock availability if it meant they could get stock that day.   

Getting through the pandemic meant the team needed to come together. As a leader Jay said you needed to be more inclusive and flexible with the ways in which employees worked. Along with the pandemic there were some major social disruptions during the year. This meant that during the height of the pandemic ran two weeks of diversity training for all the team. “Sometimes a deadline is not the most important thing. It’s making sure the team comes through”. 

There was a live Q+A in this session (in which I managed to get a question answered!) 

Jay talked about the importance of technology vs culture and process in getting things done at speed. He said, “Culture drives process and process is guard rail”. Technology, like their commitment to open source, can only be leveraged after that.  

Jay’s prediction for the year ahead that there is going to be less contact everywhere. Athletes will want to check out goods on their phone rather than waiting in line. He predicts more demand for self-check-out. Everyone is going to have to step up their game on delivery and delivery itself will become more of a valet experience. BOPIS will give way to curbside pick-up. People will want to get back in to stores and to be around people but maintain space between each other as much as possible.  

 Session Rating 10/10 (Must See)   For me the best session of the show so far. Showed the importance of serving the customer, the team that serve them and how technology can facilitate innovation, but the real drivers are culture and process. 

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