With over 40,000 people, 6,200 brands, 100 countries represented, and over 1,000 exhibitors, retail’s Big Show lived up to its name this year and artificial intelligence was the headlining topic. However, while AI dominated the content sessions at NRF, the real conversations were happening in the breakout rooms and on the expo floor, and attendees were mostly aligned on finding the right systems and partners to rebuild their businesses from the bottom up. Retailers were bombarded by automation, robotics, smart solutions and futuristic innovations, which left many with more options than solutions for their post-COVID unified commerce business models.
According to Columbus Consulting’s CEO, Jon Beck, “having worked with 100 different retailers this past year and meeting with many of our current clients at the show, one thing has been consistent — data.” Beck continued by saying that “we’re advising our clients to get their data right before they build into other applications. There’s a lot of foundational work that needs to be done in the industry to shore up retailers’ enterprise systems.” Such building blocks include integrated point-of-sale systems, end-to-end inventory transparency, RFID functionality, and real-time visibility into business intelligence measures.
Also prevalent was a renewed interest in “the store.” With brick-and-mortar still accounting for up to 80 percent of retail sales (varied by product category and brand), retailers were looking for how to enhance and elevate the in-store experience. According to Roelant Prins, chief customer officer of Adyen, a financial technology platform, new store development increased 71 percent from 2022 to 2023. Some brands investing in store innovations as showcased in the featured session “A Snapshot of the Newest NYC Retail Standouts” include:
- Petco
- Q NY-Aston Martin
- Rivian Spaces
- Pop Up Grocer
- On
- Aime Leon Dore
- Crate and Barrel
- Coach
These retailers aren’t looking for touchscreen gimmicks; they’re building a customer-centric approach to physical retail using technology and experience to build interest, enhance the brand, drive sales, and grow loyalty. Specifically, by building business adjacencies, incorporating personalization, encouraging community, embracing a sense of authentic purpose, driving responsible ESG practices, and creating data-driven (yes, data again) experiences.
One sector of retail that continued to emerge at NRF is grocery. As traditional grocers look to compete against newer, value-driven competitors such as Aldi and Lidl, they’re opting to reinvent themselves. Many of these brands came from local/family roots and are now outgrowing their legacy systems and processes. In their NRF session, Forrester and Kroger explored the new world of the grocery consumer, noting that U.S. spending on food exceeded $2 trillion. Much of the sales growth came from inflation, but consumer trends in digital shopping forced the industry to figure out e-commerce, mobile applications and same-day delivery. One shining light for grocers is the exploding success of retail media, providing brands and vendor partners with digital ads and new smart search functionality on sites that expand consumer needs by genre or intent (think appetizers vs. Super Bowl party generated product listings).
So, what about AI/ML, the ultimate buzz letters? The good news is that many retailers are already using augmented information/augmented intelligence. Current online chat text service functions and product recommendations are reoccurring examples of AI in use. Similarly, the use of deep data to profile and personalize customers by preference has also been in use for several years. Real-time pricing models and promotional offers, too, are AI enabled as is the development of content at scale. Sure, it’s nice to imagine holographic/robotic sales associates and virtual environments, but retailers are really looking to drive short-term cash flow in 2024 and build back their business foundations that were disrupted over the last several years with the pandemic, supply chain disruption, and rapid growth inflation.
According to Randy Salley, former senior vice president at Walmart, and Dale Cade, retail consultant at Columbus Consulting, the real benefit of AI short term is for back-office functions and e-commerce search. AI can be as simple as streamlining administrative work with ChatGPT or can be used for demand forecasting to become more profitable with better inventory levels and more accurate allocation by channel/location. Cade further identified the top current challenges for retailers to implement AI functionality, namely:
- Human anxiety and fear of workforce replacement
- Lack of legislation and governance
- Absence of purpose/objectives and a clear use case
- Data, or the lack of clean, accurate historical data and consistent attributes
- No long-term road map/plan
- Lackluster human adoption (see bullet No. 1)
Again, the unspoken hero at the core of the AI/ML world is data. While not flashy or visible to consumer-facing functions, data kept surfacing across the Big Show regardless of the panel or session topic. Perhaps the most obvious use case for leveraging data to enable AI and drive profit came from the keynote session featuring CNBC and FedEx CEO Raj Subramaniam. Subramaniam stated that there will be $8 trillion spend online by 2026. He further touted that such behavior is driving 15 million package deliveries each day. It’s no wonder that FedEx is now in a key position at the heart of commerce. The company announced the launch of its fdx platform, which connects the entire supply chain from source to door. FedEx is uniquely poised to understand demand by geographic area. Its logistical fleet is able to track packages from purchase to return and is currently using various data sources along with AI to predict consumer behavior.
Similar to FedEx’s initiative to become a retail solution, Uber has Uber Direct, a solution for seamless returns. The service provides retailers with local resources to pick up returns from consumers and deliver them back to the store or source destination. This unified commerce solution allows for retailers to leverage the Uber fleet with white-label access that drives customer loyalty through another engagement. Uber Direct complements Uber Eats for a complete retailer resource service.
Even with retail innovations, AI applications, store experiences and enhanced business offerings, what NRF show would be complete without some leadership tips from outstanding retail leaders? In her keynote session, Levi Strauss & Company President Michelle Gass spoke about her rise to the top of the 170-year-old iconic brand. In addition to outlining her road map for what’s next for Levi’s (global retail growth, denim dressing and men’s button-down woven shirts), she spoke to the five business learnings that she has gleamed over the years:
- Don’t underestimate the power of brands.
- Always be consumer obsessed.
- Remember the importance of innovation.
- Think like an omnichannel retailer.
- Keep purpose and values at heart.
In addition to Gass, the conference headlined another industry talent, Martha Stewart. Stewart sourced her retail wisdom from her career building brand partnerships with Kmart, The Home Depot, Macy’s, JCPenney, Skechers, Amazon.com, and others, along with her 40-year history as founder of Martha Stewart Living. Her mantra is “learn something new every day!” Stewart’s focus on maintaining balance and relevancy has kept her at the forefront of not only the retail industry but of the cultural world. Her secret is to keep enthusiastic about your customer, keep learning, stay curious and simplify — be careful to not overly complicate your products and customer experiences. Lessons every retailer can and should apply. And, to quote the aforementioned legend, “That’s a good thing.”
Lucille DeHart is a retail marketing expert, founder of Yogassists, a marketing consultant at Columbus Consulting, and a WIRLC member.
View Original Article
