The New Retail Landscape: A Q&A with Oliver Chen of Cowen Inc.

Alison Choe
Alison Choe

Oliver Chen, managing director and senior equity research analyst for Cowen Inc., recently sat down with RetailNext to talk about the findings of his latest report, "Connections, Context & Community Drive Customer Lifetime Value."

Oliver Chen is a managing director and senior equity research analyst covering retail and luxury goods for Cowen Inc. With his deep understanding of the consumer and ability to forecast trends in the retail space, Oliver’s coverage of the retail sector has led to global press coverage from CNBC, Bloomberg, The New York Times, Financial Times, The Wall Street Journal and others. Most recently, Oliver was recognized on the 2018 Institutional Investor All-America Research team as a top analyst, and was also named on the National Retail Federation (NRF) Foundation’s “2019 List of People Shaping Retail’s Future.”

RetailNext recently sat down with Oliver to talk about his views on the retail landscape, where he shared insights from the 110-page report, “Connections, Context & Community Drive Customer Lifetime Value,” published by Oliver and his team at Cowen.

To start, your research with Cowen elaborates on a retail model that includes 3 Cs- Connection, Context and Community. Can you explain this and what it means for retailers?

The new, real perspective of retail is to follow a strategy that is connected, that understands the customer’s context, and constantly engages with the customer to drive a community.

Starting with Connection, it refers to a seamless customer experience, supply chain integration and the blending of channels. It also means a new frontier of interconnected robots and a connected physical store.

As I step into the second C for this year, it’s all about Context. It means a personalized customer experience and using data to drive a better experience every subsequent time. It also means measuring interaction data that the customer is having with the brand or retailer, and data-driven merchandising. This can lead to better conversion and retention.

The final idea is that of Community retail, in which brands are interacting with the customer on a special high level. It’s a two-way street where the brand is having a conversation with the customer and customers are having conversations with each other. In the new model of retail, it’s all about constant engagement.

These 3Cs build upon the 3Cs I spoke about last year: Convenience, Curation and Culture. They are still relevant in terms of competing against Amazon and driving exceptional convenience, but the key features of the 3Cs of 2019 is the data and technology that enables the connection, context and community.

Glossier flagship store in NYC

Retailers are increasingly being referred to as ‘technology companies,’ from Walmart to newer players such as Glossier. Can you speak about what this means and how retailers should think about technology and data?

Retailers have to earn the right from customers to capture their data. They have to use the information from customer interactions and customer relationship management to drive a better experience for shoppers. In addition, with the main interface being the mobile phone, it will unlock a lot of potential. The other important part is the importance of a loyalty program, allowing retailers to capture purchasing preferences and decisions. This enables greater personalization that can ultimately surprise and delight customers or save them time.

How can retailers earn the trust of customers?

The concept of trust is an overall organizational imperative. Earning the customer’s trust is an important challenge that underlies brand equity. It must be fostered through every touchpoint with the customer, and is built by improving customers’ lives in a consistent way. This starts with not disappointing the customer, such as by always having products in stock. Ultimately, retailers can add value for customers by saving them money and time, selecting the right product, or surprising and delighting them. It is also important to be transparent and visible with customers so that they feel connected with their products and are given control over their shopping journey.

As Generation Z is coming of age and holding more purchasing power, what do you think retailers should do to tailor to their needs?

I think what’s important is rethinking retail, in some ways entirely. New ways of approaching retail are taking off, such as through retail as a service, the circular economy, and the sharing and gig economies. Generation Z is very value-focused and interested in stretching the dollar and time as much as possible, such as through the rental and resale markets.

Another aspect that is important to Generation Z is transparency. They are drawn to brands that have values and are mission-driven. As new consumers are seeking a valuable mission-driven connection with brands, it helps to drive community as well. This becomes a two-way exchange, where some of the best brands leverage communities to drive innovation and help inform product development and reduce friction in the shopping experience.

We also see that brands and retailers are helping consumers with self-improvement in the areas of health and wellness, and happiness. New generations are constantly multi-tasking and are getting creative in the method they look for ways for betterment.

What are your thoughts on off-price retailers? What positions them for success?

At Cowen, we love the off-price sector. It continues to be popular as the discount on brands are anywhere from 30 to 70 percent off. We see a major structural trend where everyone is looking to maximize the dollar, and there is an increased transparency on pricing given the rise of online. We also continue to see strong consumer interest in the outlet channel.

The off-price business models turn inventory quickly so that they can execute on growing categories. Underlying these business models are agile buying teams who can act opportunistically to bargains available in the marketplace. The theme here is, “How do you save people money or time?”

One of the Cowen reports looks at the role of robotics in retail. Can you speak about what this means for the shopping experience and retail landscape?

What we are seeing is rapid adoption of curbside pickup. Ten percent or more of the U.S. have tried it and it’s quickly ramping. Curbside pickup is a perfect example of blending physical and digital, because you order online and drive up to pick up your groceries. This is unlocking convenience for the customer, and allows them to outsource the shopping, through shopping as a service. It’s also a catalyst for a more connected store, as stores have automated picking, and robots for inventory scanning and unpacking trucks. Underlying the future of robotics is a radically different supply chain that has greater accuracy and can flow continuously rather than in large batches.

The need for speed is a primary long-term theme because greater speed unlocks better merchandise margins and the ability to provide consumers with the right products at the right place at the right time.

Walmart’s drive-up grocery pickup service in Seattle

What do you think are the biggest challenges that retailers need to overcome to drive further adoption of curbside pickup?

The biggest challenges are scaling the current success of curbside pickup and balancing robotic versus human talent. In-store autonomous robots are new, and so scaling them accurately is a challenge. As curbside pickup becomes more popular, we have to figure out how to manage volume in the store.

There are a lot of questions to raise, and first, what happens after curbside pickup? What does the consumer want and what’s possible? For instance, with fully automated dispensaries, you don’t even need a person to bring out the groceries for pickup.

There is also the question of what happens to assortment as grocery moves online. You may be presented with a more limited number of brands, or a more correct assortment of brands according to your personal preference.

Lastly, what happens to the treasure hunt experience where you discover things you didn’t know you wanted? Can or should that be replicated online? In some ways, the discovery of products online can make things easier. For example, if you have diabetes and are only shown choices that are healthier for you, or if you have allergies to specific ingredients, it’s easier to find what you need.

Any final thoughts on how the retail industry is evolving and what stores should do more of?

I think people in stores are the retailer’s best tool for conversion. We should be looking at how retailers empower, train and develop talent, and at the same time develop and test the right technology to drive harmony. It’s a great time to be in retail with all this change. It’s also a time where retailers are both protecting and fostering an existing customer base, while testing, reading and reacting to new ways of shopping. Through this all, there is a balance of human talent and technological capabilities, and the right training and development programs.

We also see that data unlocks a new way of thinking of retail. This means thinking about retail in terms of customer lifetime value and having better ways to measure existing versus new customers, and how much it costs to acquire customers and to retain them. Technology and data are enabling this, and it is an important point in the future of retail.

If you would like a copy of Cowen’s full 110-page report on 2019’s 3Cs “Connections, Context & Community Drive Customer Lifetime Value,” please email

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Oliver Chen’s disclosures:


1)  Any financial interest held by the analyst, member(s) of his team, or his household members: NO

2)  Firm and affiliates 1% or more ownership interest:  NO

3)  Any other material conflict of interest:  NO

4)  Subject company a client of the firms or its affiliates:  NO

5)  Position as officer or director of the company:  NO

6)  Analyst received compensation from company:  NO

7)  Cowen and Company received compensation from company:  NO


1)  Any financial interest held by the analyst, member(s) of his team, or his household members: NO

2)  Firm and affiliates 1% or more ownership interest:  YES

3)  Any other material conflict of interest:  NO

4)  Subject company a client of the firms or its affiliates:  NO

5)  Position as officer or director of the company:  NO

6)  Analyst received compensation from company:  NO

7)  Cowen and Company received compensation from company:  NO