NRF 2020: Welcome to the New Decade of Retail
Another NRF Big Show is in the rear view and I have to say that I am optimistic about the new decade in retail. As you will read below there is a real sense of optimism, and change, in the air.
One of the great conversations I got to be a part of was actually not in the regular programming for the show, but rather a special even hosted just for leadership of Associate Member companies, basically anyone who isn’t a retailer. We were able to bring top technology / CIO talent from Under Armour, Estee Lauder, TSC, Chobani and Tiffany’s together for a great conversation on implementation challenges, all hosted by the uber-talented Michelle Grant from Euromonitor. I want to take this forum to thank all of them for their participation. Now, onto the main event…
Welcome to the new decade of retail
As a longtime attendee, speaker and exhibitor at the NRF Big Show, I entered the 2020 version with a specific objective. My goal was to see if this decade was going to feel any different than the last or if it was going to be more of the same as I had experienced over the past few years. In a bit of a surprise, I can confidently report that I left this year’s show filled with optimism and tremendous excitement for the future.
The show couldn’t have got off to a better start with Satya Nadella, Microsoft’s CEO, stating some simple truths that, for me, will serve as the backbone for the 2020s, and not just in retail. His premise was that retailers (and any type of company) can no longer gain cachet by being affiliated with technology or a technology provider, even the big ones. This is a decade, for retailers especially, to “forge their own digital identity.” Really, what he was getting at is the need for digital to move from ‘transformation’ to a fully integrated and transparent part of what retailers will believe, how they will act and the experiences they will deliver.
It was in that spirit that I attacked the next 3 days of meetings, sessions and tours of the ever-growing show floor, startup zone and innovation hub. Last year, the main sense on the floor was one of competing platforms and the rush toward computer vision (you can read those thoughts HERE). This year, I was excited to see some themes emerge that haven’t been talked about in a while, namely around the shelf and employee enablement.
The Shelf is Dead; Long Live the Shelf
The number one thing I noticed as I entered this year’s show floor was the sheer number of entrants into the digital shelf strip space. Last year’s show saw major momentum in the possibility of 4K shelf strips to advertise products of all types, display pricing and help shopper wayfinding in the store. Microsoft and Kroger’s entry into the space made a big splash and was one of the most talked about exhibits of 2019.
This year, seemingly everyone was in on the act from traditional providers like Microsoft and Hitachi to smaller players like SoluM and Rainus, and the diversity of what they offered was tremendous. On one hand is a company like Cooler Screens, who has gone all-in on 4K video cooler doors for all types of retailers. These doors can serve as full video advertising units, they also track inventory and plan compliance, helping stores and their employees. Other players like Rainus are using ‘digital paper’ to present dynamic pricing and expanded product info right at shelf, replacing a traditional price/inventory tag.
Specifically, there were two digital shelf applications that really started to connect the dots for the next generation of in-store retail experiences. The first was the ability for digital shelf strips to promote self-service purchasing and the other was the potential for customized merchandising and flexible, real-time product mapping in the store. Let me explain…
Stores like AmazonGo are still experimental in the way they use technology to help people shop and buy seamlessly. There are a number of restrictions to scaling these types of experiences including size of store, lighting and app installation on phones. While we will see major advancements in all of these over the next decade, self-service shopping is already an expectation. One great, ready for prime-time, way of enabling grab-and-go was presented at this year’s show in the form of a digital shelf tag with QR code. The way it works is that a shopper picks up an item and scans the code on the digital shelf tag, this directly accesses a payment method, either phone based like ApplePay or via a card stored in an app. The digital shelf tag then automatically creates a new, unique, QR for the next purchaser and sends a message to update inventory in real time. With native QR capability built into every smartphone, this is a solution that retailers can get into market quickly.
The next innovation was one which combines RFID technology and digital shelf tags together to help retailers and shoppers alike. First, with the RFID capability, store managers can move items around the store along with their enabled tags and readers can ‘ping’ their signals to remap the store in real-time, helping with product finders and web-based planning tools. With trends like location-based merchandising gaining popularity, these types of tags can help retailers move away from a universal planogram into a store-by-store merchandising strategy, all accessed by a single set of digital experiences.
Second was the ability for digital tags to launch mobile-based experiences to provide shoppers expanded product information and promotions, all without an app installed. While near-field communication (NFC) is more seamless in launching browser-based experiences and some tags incorporate them, the same QR/RFID technology will also work. Shoppers can use embedded functionality in their phones, without an app installed, to launch mobile-web experiences around product from either the retailer or manufacturer.
I am excited to start seeing these types of experiences and more popping up at retailers everywhere in the coming years.
Employees as Difference Makers
With record low unemployment and the notion that retail jobs don’t have as high tenure rates as other professions, it is no surprise that retailers are really focusing in on enablement technologies. A very timely New York Times article entitled “Her Job Requires 7 Apps. She Works in Retail” (HERE) pinpoints the current state of affairs at retailers big and small and at this year’s Big Show there were no shortage of providers promising solutions.
However, in reality it is apparent that retail store technology is still in a fragmented space. At this year’s show, I really saw employee enablement broken into three categories; Store Activity (shopper tracking), Product and Store Management. Each part is very important to help employees thrive, but I was unable to encounter a suite that does it all and does it well. Providers like Zebra probably have the most comprehensive solution, but even their suite is missing some key elements.
In terms of Store Activity, this year was markedly different than last in terms of both the promise and execution of computer vision. As mentioned above, many retailers are pursuing a different tact to the notion started by AmazonGo with self-service checkout and the concept of ‘checking in’ at the store. Computer vision seems to have changed in focus from helping shoppers check out in a frictionless way to helping retailers understand behaviors in the store and inventory control.
As we focus on product management, we can go back to Zebra Systems and how they help employees have immediate access to expanded product information as well as exposure to real-time inventory through connections to ERP and OMS systems on the backend. With companies like Walgreens having an average tenure of 9 months, these systems are invaluable for getting new employees up to speed.
Finally, there were a number of entrants into the store management, scheduling, and HR suite for employees and store managers. These systems all seemed to be fundamentally disconnected from store tracking and product management, adding to the notion that an employee needs multiple apps and devices to do their job, even in the digital age. Another surprising thing at the show was that I didn’t see any of these systems integrated with APPs like Earnin, who help workers in retail access the money they have earned daily or weekly in an effort to create financial control and promote job satisfaction.
The 2010s was about enabling back-end, enterprise technology transformation and as we look back in another decade, we will see that the 2020s was filled with optimization around technology that runs the front-end.
Roaring 20’s Are Off to a Fast Start
If this year’s NRF is any indication, the 2020s are off to an amazing start for retail and these two major trends in shelf and employee enablement will help drive the way in digital information and transformation. They also represent two powerful ways that retailers can start to deliver on Satya’s goal of creating their own digital identity as a retailer for the next decade.