A few weeks have passed since braving the long trip north to what was once the capital of retail, New York City. Amid snow flurries, extremely unfavourable exchange rates, and a city looking to move on from the scars of covid, over 100 leaders from the ANZ retail value chain flocked together with 35,000 global retailers, suppliers and retail experts from 90 countries to attend the Big Show which is hosted by the National Retail Federation.
The 2023 experiences and themes in the conference itself, complimented by the streets of New York were a contrast to the offering and future promises of retail at NRF 2020, and a vastly different to the lightly attended, COVID impacted, conference in 2022. Those fortunate to make the journey this year had the unique opportunity to connect with global peers and technology providers for inspiration and to get an “insider” sense of what is ahead for the retail industry. Each would have experienced NRF 2023 uniquely, with their personal agenda in mind to navigate through more than 50 curated keynotes and more than 100 exhibitor sessions, featuring over 350 speakers to offer insights into future retail trends. Most would have spent time in stores in and around the city to take back ideas to see what trends are landing and key to the customer experience.
Ironically my personal experience, with an ANZ lens as a Retail Lead in Big Tech, was weighted in a strong bias in the themes of data and technology. On return I would find my career impacted by the significant restructuring occurring in Big Tech, as a now ex Salesforce and former Microsoft Retail lead. Caught up in the realities of a sector experiencing a rapid change, transformation and a shifting landscape to address costs and streamline impacting customers. A simple Chat GPT search in BING can surface the most common themes of NRF 2023 – trends reinforced throughout the conference, but I was wanted to dive deeper, to see what offerings and stories could be uncovered beyond the words we tire of hearing:
· The Rise of E-Commerce and Return to Stores
· Omni-channel retail
· Artificial Intelligence and Automation
While retail practitioners came in search of innovation, seeking to understand what ideas and technologies are offering the promise of driving a step change and competitive edge on disruption, it soon became apparent the common trend messaging which rang through in the keynotes and expo floor was on the practical, the iterative investments that could help retailers optimise margin in inflationary times, while retaining and attracting employees and customers.
It was clear in the chats in the coffee lines that the gap between the digital and physical exist no longer, that the digitisation of the physical store is happening at a rate like never before and there was plenty to unpack around the strong performance of in-store sales originating from online/digital interactions, in contrast to the slowdown of online “click and collect” and high cost of last mile.
Throughout the speaker’s success stories a fresh themed emerged. Breaking beyond the generic possibilities with personalisation and landing as the execution of Macro to Micro. Brands truly understanding the customer micro segment and investing in the essential data infrastructure and agility to address the unique demands and aspirations of each segment. In the US the minority has become the majority but securing loyalty is only possible with an authentic and rich understanding of the mosaic of customers in the new landscape, their values, wants and desires. The success of SHEIN was the most mentioned brand that is achieving growth through a deep understanding of the mosaic of micro segment customers that drive demand for small drop product releases. Casey’s was the hero story for real time personalisation through bringing together the power of Salesforce clouds and real time customer data to personalise in their digital and convenience store experience. Woolworths CEO and Head of Data Analytics travelled from Australia to share insights on their data driven strategy with a global audience and how their advanced analytics roadmap was a catalyst to forming data excellence around the customer, buying and merchandising, store operations. Replenishment and supply chain and support for people, finance and risk. Emphasising the importance of investing in the fundamentals and data infrastructure to support their evolving group ecosystem.
In the Start Up and Innovation Zones it was evident that the promises AI and ML have reached critical mass. There was plethora of SaaS providers offering “out of the box” innovation, addressing the most pressing use cases. Interesting to consider for midsized Australian Retailers and Brands lacking the vast technical teams and labs of Walmart, Amazon, Target USA or Tesco. Needing to focus on proven success over test and learn in uncertain times. The commoditized innovation line up was impressive, Saas providers already addressing the need to add value to existing commerce and digital marketing platforms. Tapping into the power of uniting operational and customer data through native integration and API’s with the existing platform providers. Offering the promise of Big Retail innovation to all retailers. A sampling from the Zones and Expo floor include: SES Imagotag – a platform to bring the digital shelf into the store, making digital pricing and advertising at the shelf a reality.
Fit Match – rising to the fit challenge with a unique digital twin approach to match customers with the best-fitting products. BAMBUMETA – to organise and interpret customer moments, to build a closer relationship with the consumer. Real world use case for Web 3.0 to build a sense of community and consistent, authentic personal experiences in stores and digitally with blockchain technology.
AWS Just Walk Out – The promise of scan and go at a price point available to mainstream convenience retailers. The AWS collaboration with Amazon’s Go technology and Starbucks in Time Square highlighted the power of removing time from the check out and friction of payment.
Walmart’s Go Local – a white-label service delivery service and in store picking app for retailers. For shoppers it appears your retailer is seamlessly delivering. For the retailer, efficiencies are gained an aggregated selection of delivery providers, available on demand and bidding on each order.
Pactum –A chatbot disrupting accuracy in negotiating suppliers purchase orders from $1000 to contacts over $100 million dollar, potential savings of 3 to 5% on contracts. Sustainability took centre stage in a new way, this year with retailers sharing practical advice how they have risen to the challenge. A flip from the past narratives with tech providers leading with messaging around carbon reporting. Addressing the say do gap to customers who are expressing their sustainable values – yet seeking price value. Sharing their challenges in are providing data to highlight the impact of product level carbon footprint and affirming that government mandates are key to driving deeper investments.
Experimentation spotted in New York with American brands included:
The J. Crew resale program announced at NRF to offer vintage came to life in the display and capsule collect iat their Flatiron store and online under the “J Crew Always” banner. The pre-owned styles are listed on the J. Crew site for several days before becoming available on ThredUp which partners with the clothing retailer on resale services.
Nordstrom Local in the West Village brings the supply chain to the customer, offers tailoring services in their touchpoint community store. The location also drop points to recycle plastic beauty containers and a donation drop box to ensure circular fashion values are supported and rewarded in the customer experience.
GANNI proudly declared their status as “not a sustainable” retailer but as a responsible retailer on their journey. Equipping sales associates on the floor with devices to run the store, manage inventory and free up the store staff to collect payment anywhere in the store.
Trading down for value in inflationary times was a trend that came to life with NielsenIQdata shared on day 3 showing 59 percent of the people it polled believe America is already in a recession and that 49 percent of those believe the recession will last more than a year. Among all those polled, 33 percent only had enough money on hand for basic survival needs, making competition for the middle-class dollar all the more cutthroat.
The SVP for Retail pointed to a knock-on effect with the shift of population centres to second tier cites. It seems the future of retail, is more likely to be experienced in San Jose, Portland, Austin or Seattle. Second-tier cities,are more comparable to our ANZ landscape and do not offer urban density. Eroding margin with the growth of e-commerce and last mile.Meanwhile the host city of NRF, New York, faces a different challenge. In 2020 95% of the workers came to the office every day and that dwindled down to under 30% at the timing of NRF 2023. Now resulting in a spending shortfall of over $4000 USD per a Manhattan employee.
Paring down the NRF 2023 insights relevant our ANZ landscape comes full circle, back to retail fundamentals. It is worth noting that supply chain disruption did not feature as a strong theme as it has been dealt with and excess inventory strategies already in play. In a world that relies on knowing and positioning your offering the key take aways from NRF come down to the four key pillars, underpinned by the possibilities of data and technology, to deliver real value today and navigate the unknown sequence of macro-economic events ahead.
Knowing your customer – inside and outside of the store.
Engage, attract and retain employees – invest deeply in your store associates, as the role of the store shifts.
Consider opportunities for deeper collaboration and partnerships with suppliers, beyond data and building on the evolution of products to services.
Lead your marketplace position through a true understanding of your complete omnichannel experience to identify and address your leaks and opportunities to automate.
If I have peaked your interest, you can follow my views on LinkedIn from the global and ANZ lens of retail, dealing with disruption, what’s next and separating the promise of technology from the hype.