Over 35,000 attendees from nearly 100 countries congregated in an ice-blasted New York City to reconvene the retail conversation, swap war stories around 2017 and the holiday season sales, and look forward to 2018. But what were we all talking about this year?
At the risk of saying I told you so, personalisation was without a shadow of a doubt the big topic this year. The personalisation agenda is at the moment so all-consuming that other trends and topics must essentially bend to its will – discussions around voice, artificial intelligence, facial recognition were all seen through the lens of personalisation. While there are many sides to it, you could (arguably) boil it down to two: having the data to drive meaningful personalisation, and driving the innovation to make a connection. More and more businesses are building products and solutions designed with the customer’s perfectly-tailored requirements in mind.
I talked about personalisation at some length in my Trends for 2018 article (which I’d encourage you to read if you’ve not done so) – and it’s clear that it’s the big thing for retailers to focus on in 2018.
While obviously key to smart personalisation, it’s probably not much of a surprise to say that data was a big topic more widely. The EU’s General Data Protection Regulation (GDPR) comes into effect this year (its reach is global not limited to the EU, but that’s for another time…) which will drive a lot of attention onto both personal customer data and data security generally. While security (and potential breaches) are the headlines, many retailers are rightly taking the GDPR opportunity as a time to rethink and refresh their data strategies more widely.
Humans 2, Robots 1
Last year’s NRF saw a big focus on automation: several keynotes focused on the job losses that these could bring, and robots were everywhere – literally. Perhaps partly by way of reparation, there was a big focus this year on “the role of the human” in the store experience. On the one hand this was designed to point out that AI and robotics should free-up customer-facing staff to focus on delivering deeper, more localised (and, yes, more personal) engagements with their customers. Shawn Sweeney, VP of Digital at Starbucks, put it well “Just because more and more of our guests order and pay for their coffee through our app doesn’t change the fact that humans still have an inherent need for connection, and always will.”
The other side of the renewed focus on the store associate was the consideration that “happy associates make for happy employees.” Those able to deliver the most seamless – not to say frictionless – store experience will be the most satisfied and the most likely to transfer that satisfaction to the customer. It’s about giving them the tools and the information to succeed. According to this Cisco blog from NRF:
“The potential value of retail digitisation from now through 2019 is $2.8 trillion – with associate productivity accounting for almost one third of the value.”
No retailer can afford to sniff at such figures.
Retailers and suppliers: a productive tension?
The same Cisco blog I’ve referenced above also states that one of its key NRF takeaways was that “Many retailers are over-promising to the street about their new tech solutions and IT is struggling to deliver.” It was definitely an interesting year to witness what I’ll call some “productive tension” between retailers and suppliers this year, as it was a year when, looking at the U.S. retail market more generally, there were mixed messages about the state of the nation – on the one hand, store closures in 2017 hit a record level, on the other hand the U.S. economy is buoyant, consumers have more to spend in 2018, and retail has a genuine thirst for innovation.
One panel at NRF this year saw a couple of retailers try to identify what might be grounds for dissatisfaction. They articulately made the case that technology solutions must “solve problems, be scalable, and be as complete as possible.” This chimed with Cisco’s take on the slight ‘disconnect’ between retailers and their IT departments: that the business doesn’t always have the foresight to give the foundational infrastructure the attention it requires to deploy sexy new solutions securely at scale.
Platform Thinking – A Big Idea
Here at Retail in Detail we’re big fans of retail analyst supreme Kate Ancketill, and we know from her opening keynote at our inaugural Retail Tomorrow event last year that she’s not afraid to take retailers out of their comfort zones. She was definitely wearing her provocateur hat for her NRF keynote on ‘Platform Thinking’. But before you groan and think “not another new technology platform…” I should state that Kate’s big idea isn’t at heart about technology at all.
Platform Thinking is about changing the retailer mindset to adopt a more expansive definition of what retail actually is, and around what a retailer can and should be, and about what the relationship with the customer can look like. It’s about adopting what Kate calls a “radical modularity” that “sweats assets and delights consumers.” There are already numerous examples of forward-thinking retailers who are proving that physical retail can emulate the success of online shopping, that experiential retail models do result in deeper engagement, and that physical retail doesn’t have to mean a fixed physical location. From her keynote blog:
“The traditional retail model consisted of a limited number of assets – store formats, technologies, brand activities, products and so on – that were inflexible, but perfectly optimised to supply middle market demand as it was. As that target has fragmented and new tools have become available, retailers must have the courage to fragment their proposition in response, by breaking their business down into its constituent parts; adding, removing and reconfiguring as necessary.”
Customer journeys, for example, don’t have to be linear. Forward-thinking retailers are experimenting with moving elements of the journey into unexpected times or places. Key is to embrace a growing variety of experiences, offerings and channels, through thinking fluidly about all of them. Kate cites the example of Toyota’s Drive to Go car club which essentially recognises that renting a car is “a means to an end” and rather than focus on technical car specifications offers creative and imaginative examples of the sorts of days and experiences customers could have with the car. Toyota Drive To Go then plays that forward to (for example) bundle items like picnic chairs and cooler boxes with the rental.
While Kate’s keynote and blog gave a host of compelling examples of what good Platform Thinking looks like in action, she was careful to articulate why it’s important in the first place:
“By opening up their platform to consumers to involve them in the creating, making and supplying of the retail experience, and even the brand itself, platform thinkers forge deep connections with those customers and make it harder for competitors to untangle them.”
It’s about customer experience, and loyalty, and driving a more diverse and exciting retail industry. But it’s also about getting out in front, and making sure your competitors don’t steal your lunch.
So what do retailers want?
This then seems like the right place to quickly look at what exactly it is that retailers are looking for in 2018. Riverbed published the results of their new survey which asked 300 retail IT managers worldwide what they planned to invest in over the next 12 months. It’s interesting that the top five responses all focus on physical stores and the employee and/or customer experience:
- The ability to rapidly expand locations (51%)
- Improvements to in-store wireless and mobile service for customers and employees (49%)
- Tools to better monitor users’ experience with customer apps (48%)
- Technology to ensure point-of-sale connectivity and continuity in stores (47%)
- New digital services and apps for customers and employees (47%)
Hansang Bae, CTO of Riverbed Technology, was at NRF to add some commentary and insight around the study. Indeed, gathering insight was the main thing on his mind:
“You need to monitor your point of sale so that you can recognize problems before they happen and affect your customers and your business.”
Many stores don’t have technical expertise in house, so solutions like Riverbed’s SteelCentral solution can gather insight into the customer experience while enabling application performance management.
Two tech trends to watch in 2018
I can’t sign off without an extremely important mention of two of the other very biggest areas of focus for NRF 2018. The first was inventory management, which even a few years back was filed in the very unsexy logistical side of retail operations. Today, with omnichannel the goal and the returns channel important for retailers, having accurate inventory is key to profitable operations. What may surprise some is that as the heart of this is my old friend RFID. The resurgence of RFID is a tale worth telling in full, so I’ll save that for my next blog, but I note in passing both that this NRF marked the first time that RFID tags were part of the delegate badges, and that one of the stands most besieged by retailers this year was RFID solutions provider Zebra Technologies.
The second was artificial intelligence, which as you’d expect was everywhere. I loved the title of the Salesforce Big Idea Session: “You Can’t Spell Retail Without AI”, but the enduring regret of NRF every year is that you can’t go to every session or speak to everyone, and that was one I missed. I did however enjoy the likes of IBM and Microsoft demonstrating some thrilling AI-driven innovation. Anyway; artificial intelligence – and its rapidly-developing role in delivering personalisation – deserves its own blog too, soon. So watch this space.
The very VERY best thing about NRF 2018
Saving the best until last…
The famous McDonald Butler NRF After-Party (this year hosted in conjunction with DXC Technology and RBTE) took place on the Monday evening in the unique setting of Beauty & Essex bar and restaurant on the Lower East Side. With around 60 retailers, 15 influencers and 165 vendors in attendance until the very early hours the event hit new heights. I remember talking to the manager at around 1am who said they’d already served over 300 of the special cocktails devised for the night. Not sure I can remember all that much after though…
We said it last year but this year only reinforced the fact that the MBA party has become the most sought-after NRF ticket in town. Make waves to beg, borrow or steal yours for NRF 2019.
The only constant is change
NRF is always a cauldron of innovation and inspiration. The messages that the digital consumer is the one calling the shots, and that retailers need to disrupt or risk being disrupted, are now entrenched. Indeed it’s truly heartening that so many people at NRF seem to be living those values today, rather than talking about them or trying to convince themselves of the argument. So with the new values well and truly in place, it seems appropriate to finish – and to look forward to 2018 – with a quote from the show by Doug McMillon, CEO of what remains the largest retailer on the planet, Wal-Mart:
“Retail is about change. Retailers have to be flexible enough to continuously adapt in order to serve shoppers better.”
And Doug was named The Visionary at the NRF Foundation Gala 2018 for his contribution to the retail industry. So he knows what he’s talking about…