I attended the NRF Big Show in New York a couple of weeks ago. As I did last year, I am writing on my observations from the show and discussing some of the new trends we see in retail and retail technology.
I walked the floor and observed the energy and flow of the more than 38,000 attendees. As I walked, I took notes and, at times, would stop and talk to either familiar faces or those observing a particular booth/technology.
As with last year, I marveled at the size and sophistication of the large booths. Level 3 of the Expo was the location for these “super booths” and included familiar names such as Salesforce, JDA, SAP, Manhattan, Microsoft, Oracle, IBM, NCR, Zebra, Fujitsu, and Toshiba. Also, providers such as Aptos, Reflexis, and Sensormatic had significant presences on Level 3 as well.
The main flow of traffic was between these large booths on Level 3. However, there was still plenty of traffic on Level 1, where many of the service and hardware providers set up booths. Perhaps it was the outstanding 2019 holiday season, the much warmer weather (50’s in New York in January!), or maybe just general excitement over some of the new technologies on display. However, for some reason, there was more excitement on the floor this year.
As I walked and observed, I came up with five major categories of capabilities that seemed to dominate the floor and garner the most traffic from attendees.
Artificial intelligence (AI) & advanced analytics have become pervasive across the retail landscape. Over 80 providers were offering some form of in-store analytics; over 40 offered AI marketing engines, and over 80 offered customer insights analytics. Providers supporting core retail functions such as supply chain, store operations, e-commerce, merchandising, marketing and promotions, and customer service prominently promoted their AI capabilities. To no surprise, there was a good deal of variability in manner and depth in which providers incorporated AI into their solutions. I observed several cases where AI was a real “game-changer”, providing new capabilities and unprecedented speed to retail processes. In other cases, I found it hard to see where the providers had incorporated AI concepts at all.
Walking the floor, continuous innovations in hardware caught my attention. There were some fantastic POS and kiosk form factors displayed at several booths. These designs seem to get better and better each year, and many promoted their ability to configure to a retailer’s exact specifications. I continue to be optimistic about the opportunities to leverage the combination of new platforms, integrated cross-channel inventory, enhanced customer information, and more frictionless payment build the foundation for new, innovative in-store experiences.
Electronic shelf label technology continues to advance in terms of capabilities and affordability. Increased battery life, continued advances in form factor and dual radios in the shelf labels are giving rise to a plethora of new business cases. Industry forecasts expect the electronic shelf label market to increase 24-25% annually over the next 4-5 years. After seeing the new labels on the floor, I can understand the optimism.
Staying in the hardware category, I was also impressed with advances made in-store traffic counting technologies. Leveraging an array of video analytics, what was once essentially only people counting is being transformed into a multi-purpose tool to improve customer service and increase store revenues.
The third major category of solutions that caught my attention was store operational intelligence. There were over 100 providers that had elements of store performance analytics as a core part of their promotional pitch. Can you remember the days where corporate offices produced all the reports and decided which ones they would share with the stores? Those days are quickly moving into the past as providers are offering store management an array of tools to improve decisions on topics such as stocking, staffing, displays, and pricing. Whether provided as a standalone platform or as part of store solutions, store managers will have greater visibility into the metrics they control to optimize store performance.
Think back to the turmoil of the recessions in 2001 and 2008. Now consider the challenges many retailers have faced with the evolution of their core customer base. For example, we know that Millennial and Generation Z customers have very different expectations for a retail experience than previous generations.
One critical lesson that retailers have learned through all the change of the last two decades is that you must know your customer. This idea played out on the NRF Expo floor as providers offered a large assortment of customer insight analytics, CRM, clienteling, personalization, loyalty, and customer service tools. It was nearly impossible to walk down an aisle and not see at least one solution promising improved customer insights and interactions. As I watched some of the demos and thought through retail use cases, it was evident that the battle for the customer will be fought across all aspects of the business (merchandising, marketing, store operations, supply chain, etc.). Retailers will need ways to connect the various customer touchpoints now, more than ever.
While there will be many paths retailers will follow to solve this influx of customer touchpoints and relationships, I see the key to success being in how retailers architect their data and connectivity (integrations). Leveraging the power of APIs and service-oriented architectures along with flexible data structures such as Snowflake, No SQL, and graph, retailers will be able to quickly pivot offerings, products, and services to meet changing customer demands.
The fifth and final category I observed was the increasing number of tools targeted to improve outcomes for merchandisers. Merchandising has long been a blend of science and intuition. Today’s new tools are helping merchandisers research and refine hypothesis, explore various scenarios, and arrive at optimize decisions that improve the bottom line. These solutions ran the gamut of the merchandising lifecycle, including creative (product design), forecasting, category/assortment planning, product lifecycle management (PLM), pricing, promotion, and retail revenue optimization. As with the customer category previously, the wide variety of tools available to merchants poses a challenge to IT organizations to properly architect and connect these various functions to create a unified view for the merchandising organization.
In summary, just as last year, there was a tremendous amount of energy on the NRF floor. Traditionally, retailers have used NRF to learn about emerging innovations and get ideas for potential efforts in the coming year or years. However, many of the retailers I spoke with were well beyond “learning” and were actively looking at solutions for problems they hoped to tackle in 2020. Having followed retail technology for over 28 years, I can safely say the pace of change has never been faster, and the stakes have never been higher.
In short, exciting, and challenging times to be in retail!