NRF 2022: What was new at NRF?

Just back from my visit to NRF, I thought it might be helpful to share some of my observations for those who were not able to attend. Here are some of the key themes:

1) AI is Increasingly Useful

Retailers are becoming more reliant on Artificial Intelligence, partly thanks to the demands of the pandemic. For example, many supermarkets are now able to respond to the increase in “curbside pickup” orders by using AI to organise high volumes of customer requests, preparing each for an appointed time.

AI is especially helpful to large scale retailers. Rather than rely on staff alone, they can use AI to make sense of huge amounts of data on customer interactions. (What is surprising about how shoppers are behaving this season? What products are they likely to want to buy next month? How can we organise our supply chains to best handle these demands?)

Moreover, as shoppers increasingly use multiple touchpoints — for example, a company’s social media, website and physical stores — it’s only going to become more important to effectively track and understand their behaviours.

2) More Automation is Coming

Various factors over the last two years have highlighted the benefits of automation: the high rates of people quitting their jobs in retail and restaurants; rises in the minimum wage in the UK and U.S.; a growing awareness of the importance of environmental sustainability. Brands have responded by introducing more automation to their workflows.

Californian company Ottonomy, for example, provides autonomous delivery robots for indoor, “curbside” and last-mile deliveries. They can navigate complex environments such as airports, as well as difficult weather conditions like snow and rain.

Various predictions were made. BJ Santiago, CEO of Badger Technologies, believes that automated technology such as robotic arms for stocking shelves will likely be rolled out in the next five to ten years. Meanwhile, Sam Saad, VP of strategy and growth at Gatik, predicts that the adoption of fully automated vehicles will become the industry norm in the next five years.

3) Being Sustainable is About Being Specific

We know that sustainability is important to many customers — and a sign of a forward-thinking brand. But instead of speaking in lofty terms about corporate responsibility, we need to dig into the details of exactly how companies can reduce their carbon footprint in a way that’s realistic.

Walmart’s senior director of sustainability, Zach Freeze, argued that companies need to focus on setting attainable, medium-term targets. What’s more, team members of all levels should know more than simply the overall goal — they should understand their particular role in hitting targets too.

Various speakers highlighted the importance of tangible recycling programmes. Customers can be encouraged to recycle their old products by seeing the positive impact the brand is having on the natural environment. Ideally, a brand’s sustainable outlook should be woven into their general practices and identity so that the customer is aware of this throughout their shopping experience.

4) Cryptocurrency Could Increase Profits

Should we all be thinking about accepting cryptocurrency? Apparently, it’s worth considering. Tech companies such as NCR have begun acquiring cryptocurrency software that lets their customers accept digital currency payments across digital and physical channels.

Some believe that retailers who accept these currencies will appeal to a group of wealthy customers who value this option. They’ll also potentially increase profits by reducing their payment processing costs. It could add convenience too. In physical shops, customers could pay using their phones — similar to Apple Pay — allowing for quick and easy transactions.

5) Frictionless Shopping Will Become the Norm

Amazon introduced its Just Walk Out technology — I actually tried this out in the main hall and it works really well. The next thing we knew, customers began to expect this across other physical shops. The upshot? Brands must now find ways to offer shopping experiences that are as easy and “frictionless” as possible. This might mean improved barcode-scanning technology. It might mean cashier-less interactions in places such as hospitals and airports. Whatever the answer, retailers need to consider all of the ways they can help customers get in and out of their shops without complication.

6) Omnichannel Shopping is Here to Stay

Despite the recent growth of online spending, many retailers are predicting that physical shops will still prove important to their customers. No matter how quick and easy online transactions become, there is comfort in the solidity of bricks and mortar. This can be seen in the success of Target who — unlike many other retailers — continued to invest in improving its in-store experiences over recent years and were then well-equipped when it came to pandemic requirements such as “curbside pickup”.

The challenge of being omnichannel? To create a consistent experience across both digital and physical spaces. Most likely this will mean the adoption of tools that aim to improve every stage of the shopping experience. For example, Adobe is partnering with Walmart to provide new mobile messaging capabilities which allow the retailer to engage with customers in real-time, alert in-store customers to sales, and direct them to their favourite products.

7) The Chinese Market Could Provide Opportunities

According to Alibaba exec Tony Shan, both large and small retailers may profit from expanding into China. Over 300 million people make up the Chinese middle class, many of whom have high disposable incomes. Before the pandemic, this group was starting to travel more and, over the last two years, many people have retained an interest in global brands.

Gen Z consumers may, particularly interest retailers. Not only is this group very comfortable online, but they are also enthusiastic about what the rest of the world has to offer. Even small and new digital brands might be able to expand their customer base.

8) The Metaverse Can’t be Ignored

Some of us might spend countless hours in the metaverse. Others will barely know what it is (essentially, a virtual network that includes virtual reality, augmented reality and virtual worlds such as Roblox). Either way, retailers would do well to learn more about the metaverse. According to Emma Chiu, global director at Wunderman Thompson Intelligence, 85% of consumers believe a digital presence will be essential for a brand to succeed in the future.

This is particularly the case when attracting Gen Z. This group of shoppers tend to attach more value to experiences than to physical goods. For example, a recent Apartment List survey found that only 26% of Gen Z believe that owning a home is extremely important, compared to 35% of Millennials. This topic was explored by Meagan Loyst, founder of the group Gen Z VCs, who advised retailers to watch out for new revenue streams. The sceptical among us might note that, for instance, a digital-only Gucci bag sold for more than $4,000 on Roblox. What’s more, people of all ages are becoming increasingly comfortable with spending time — and large sums of money — enjoying virtual experiences.

9) Supply Chain Issues Will Continue

The NRF president, Matt Shay, reported the predictions of various industry experts such as the CEOs of Target and Walmart. Supply chain issues (in America, at least) are expected to persist over the next year as the Omicron variant continues to impact on the availability of staff — and the economy sees the inflation associated with that. The American fiscal packages have further contributed to the shortage of staff, allowing people to stay at home rather than return to work, but this effect should taper off as society learns to live with the pandemic.

10) Diversity Must be Measured

Arguably “diversity” and “inclusion” have become buzzwords in our industry. But various companies spoke about specific policies they’ve introduced since the murder of George Floyd in 2020. The CEO of Walmart, for example, talked about their hiring policies — reporting that 56% of new hires are currently people of colour, 44% of promotions to management are women and almost 39% are people of colour.

Walmart’s CEO, John Furner, also called on other companies to make positive changes. “For every organisation that’s at NRF and a part of this, pick something, pick a goal, and find a way that you can measure it,” he said. “The things that we measure are the things that tend to improve.”

André Brown has a twenty-five-year background in e-commerce. He was the co-founder and former CEO of Attraqt Group PLC. More recently, he is the CEO of Advanced Commerce which provides a Merchandising platform (GrapheneHC) designed for Headless Commerce. You can connect to him on LinkedIn or email him at andre@advancedcommerce.io