The National Retail Federation’s (NRF) Big Show recently took place in New York City. Participants had opportunities to network with experts across the retail industry, hear about successes and lessons learned from leading tech partners, and covet the latest technological advancements sure to make waves at retailers over the next few years. Clarkston’s retail experts were thrilled to be counted among the masses and witness the impressive turnout. We left with five key takeaways (outlined below) – but more importantly – we left NRF 2023 optimistic about the health and resiliency of the retail industry.
5 Key Takeaways from NRF 2023
1. We’re STILL Talking Omnichannel
It was difficult to walk past a booth or expo session without hearing another buzzword related to omnichannel. It’s clear that many retailers are still navigating their channel unification journeys. It’s also clear that the best-of-the-best may have found the “finish line.” Numerous technologies were showcased that help bridge the divide between channels, but most agree that retail really only has a single channel—the customer.
In this channel-less nirvana, retailers have been working to create a seamless experience for their shoppers, often by either bringing digital experiences to the physical world (their stores) or recreating physical spaces in the digital world (through augmented and virtual reality). Conversely, pushing data resulting from physical touchpoints into eCommerce experiences has also been impactful.
But with 2023 upon us, it’s also abundantly clear that this omnichannel “finish line” is moving. The journey continues into areas like social commerce and livestreaming, newer channels allowing brands to meet customers at new “points of intent.” Unifying these channels into a frictionless experience requires retailers to effectively capture and react to an ever-growing stream of data about their customers. Catering to customers regardless of their channel continues to place pressures on supply chain organizations to protect shipping predictability and improve supply chain visibility. Supply chain leaders are more frequently relying upon AI-backed planning platforms. However, consumers’ demands in areas like sustainability are highlighting newer expectations for the option to slow or consolidate fulfillment if it results in improved impacts to the environment.
2. Consumer-Centricity Remains Vital
Now more than ever, retailers need to leverage data to better understand their customers—what they want, where they want it, how they are going to pay, and so much more. Retailers are also experimenting with fresh ways to become differentiated destinations for their shoppers. Take for instance Foot Locker, who has made a push to become the one-stop-shop for sneaker culture by better educating their store associates to meet evolving shopper expectations while also extending in-store services like sneaker cleaning.
Organizations like Kroger are also seeking to better understand their shoppers to put their eCommerce services into an accurate context. Understanding questions like whether shoppers visit their site to find products or simply to better prepare for an in-store visit helps shape Kroger’s efforts to unify channel experiences. Abercrombie & Fitch highlighted their “share to pay” abilities that enable their younger-generation shopper to build a shopping list to share with their parents for payment, tailoring the shopping experience for their target demographic and removing friction from the purchasing process. We left NRF reminded that the customer should be placed at the center of all decisions, as anything else could chart a course to disappointment.
3. It’s Time to Focus on “Phygital” Experiences
Not more than two years ago, we were dreading the imminent demise of brick-and-mortar. While it’s been an uphill journey for that channel, it has become quite clear that physical retail continues to have a place. In order to thrive in this channel, however, retailers have had to quickly evolve to ensure store experiences are interactive and immersive.
By comparison to the physical channel, it’s often more challenging for digital channels to build real emotional connections with consumers. Conversely, the physical channel has for years struggled to offer differentiated experiences that digital natives have grown to expect. A renewed focus on the “phygital” (or physical+digital) experience can help retailers improve conversion, reduce returns, and boost basket size. It has become imperative for retailers to enable in-store shoppers to explore their products through self-discovery, often enabled with self-service scanning, immersive digital signage, or even intelligent dressing rooms that offer virtual try-on experiences. Each of these requires significant investments in infrastructure and fit-for-purpose technologies.
Retailers seeking to remain on the cutting edge are already evaluating how to incorporate digital gamification into the shopping experience. Gamification has been known to raise engagement and loyalty metrics, and it will be interesting to watch brands push further into the metaverse in their quest to boost these metrics further.
4. Retailers Can’t Forget Their Most Important Asset: Their People
The cornerstone of the differentiated in-store experience has always been the store associate. The strive to “phygitize” this channel does very little to change that. In fact, many agree that the role of the store associate is only growing more critical to a retailer’s success. Associates are the front-line ambassadors of the brand and help drive engagement and loyalty amongst shoppers. Retailers shouldn’t deprioritize investments that would streamline the store associates’ responsibilities. Finding ways to reduce the unproductive overhead on store staff frees up your brand ambassadors to bring store experiences to life.
Several NRF sessions underscored the importance of strengthening store talent. The expectations of the shopper will continue to evolve, and so too must the expertise of the store associate. Investing in cutting-edge learning platforms to enable micro-learning or equipping staff with devices to automate time-consuming activities like counting inventory have a valuable place in the stores of the future. Ultimately, a good employee experience will yield improved staff retention—and that will always have a positive impact to the experiences of the store shopper.
5. Focus on Flexibility
Agility is key for retailers. Economic conditions remain dynamic, and a retailer’s ability to flex can be the difference between life (enthusiastically enabling the next experience for their customers) and death (regrettably closing stores). It’s critical to remain flexible within three primary areas: technology, people, and processes.
Technology – the retail environment is evolving quickly, and while many retailers have built capabilities in-house to compete, technology partners have cultivated deep expertise in solving for the problems of today and tomorrow. Virtually all expo sessions highlighted vendors’ abilities to link “capability building blocks” together to address the challenges all retailers face. Retailers can iteratively build catalogs of solutions that leverage open APIs, as an example, to protect flexibility as needs inevitably shift over time. Finding ways to maximize existing partner relationships (or seek out new ones) will be key for 2023.
People – As stated previously, people are often key ingredients of a retailer’s secret sauce. Finding the right talent, and the right tech partners, will remain critical in the coming year. As retailers continue investments in the latest technologies, it will be vital to proactively manage the organizational change associated with these projects. Even the smallest IT project can have ripple effects for an organization’s people. Getting ahead of those changes can increase technology adoption and ultimately a project’s realized value.
Processes – Incremental technology change, and certainly multi-year organizational transformations, require a vision and a clear roadmap. Retailers must plot a course now to stay relevant in the eyes of their customers. But now more than ever it’s important to also remain nimble. Don’t hesitate to attract and retain customers by implementing that new piece of technology but take an MVP (minimum viable product) approach. Focus on testing and learning. Embrace failing. But fail fast, because retail moves at one speed.
Looking Ahead: 2023 NRF Takeaways
When leaving the NRF Big Show each year, we’re always left with a sense of awe. Our retail experts are passionate about helping organizations chart a smart path forward for their operational and technical investments, advise on governance to guide and protect the implementation of these investments, and ultimately equip the retailers of the future to succeed. Let’s chat about how we can help your retail organization move at the speed of retail.
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Contributions from Cory Jackson