Reflections on retail’s big show: NRF 2018
A big show in the Big Apple: NRF ’18, the National Retail Federation’s annual event in New York City, is one of those industry events that reaches beyond the borders of the country where it is located. For the global physical retail sector, NRF defines the trends and issues that we will be talking about throughout the year. From what I heard during three days I spent at Javits Conference Center in conversations, sessions and simply walking the halls, is that physical retail is once again feeling confident and optimistic about its future.
Over the previous two or three years I heard much about the transformational change currently underway in retail, and how online sales were causing a bricks and mortar apocalypse. But as one of our booth visitors this year expressed it, retailers close and open shops all the time, the physical store concept is not dead but it is definitely transforming, and while there will be fewer stores in the future, retailers will invest more in those remaining to provide a personalized, authentic and relevant customer experience.
This year I heard the phrase ‘omni-channel strategy’ used far less than previous years, a subtle yet hopefully clear hint that 2018 will not be about the different devices used to engage with the brand, but rather how the brand can be conveyed consistently across different platforms. When people can get any item in any way in any geography, a retailer’s purpose can no longer solely be to bring products to customers. Instead, it must define its own unique reason for existing: the experience is almost as critical as the product.
In an engaging session – ‘Retail is changing at warp-speed – accelerating the transformation of your business’ – Rory Hudson, VP of information Technology at Zumiez, a 1,000 store specialty US & European retailer of apparel, footwear, accessories for young men and women, explained how they designed a seamless and consistent brand experience for both online and physical stores. In doing this he highlighted that some aspects of the brand that can only be delivered by humans – their staff – and how this has driven a change in strategy, from centralized fulfilment, to a ‘through-store’ fulfilment which allowed for a personalized and human brand experience.
One important but often overlooked aspect of the physical retail shopping experience – is the use of audio and music. While our network speakers have for some time allowed retailers to use audio in-store to make customer and staff announcements, alongside our partner Soundtrack Your Brand we demonstrated in our booth how retailers can add tailored music to enhance the customer experience consistently across a store network. SYB has produced some very interesting research and data about the positive impact of in-store music, and it’s clearly an area rich for development.
It seems as one part of retail transformation is based in brand values, human capital and leadership, while the other side seems to be grounded in technology. Many sessions focused on the fact that physical retailers are data poor, but technology to capture and derive value from data definitely took center stage at this year’s show. Robotics, machine learning, artificial intelligence and virtual reality technologies were in evidence, designed to empower retailers to receive store-specific insights about shopper and sales associate behaviors, including picking up products, trying on products or taking and moving products.
The fact is the most creative retailers are making use of this already. In the session “Achieving New Levels of Customer Engagement with Prescriptive Retail Analytics,” John Cavellini, an ex-financial analyst at Williams-Sonoma, reported that scheduling the appropriate ratio of store associates to customers during “store power hours” can potentially increase store revenue by 1%–3%. He added that by analyzing store traffic data – a metric actually that has been around since the dawn of retail – individual stores can optimize their revenue, but this is often overlooked. Certainly, levelling the playing field between online and physical retailers in use of data and analytics is something I’ve looked at before.
If this year’s NRF is anything to go by, 2018 will be about human capital and (partly new) technology to move beyond merely recommendations for us as shoppers, to personalization and individualization. It may well be the era of customer obsession.
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