2015 NRF Big Show Recap
The National Retail Federation’s 104th Annual Big Show was amazing. More than 35,000 executives and the like attended the world’s largest expo for retail. It was my first show, and it was truly awesome. I came back with several new perspectives and insights, as well as reaffirmed confidence in the trajectory of omnichannel retailing. For me, this has been an area of interest for several years so it is exciting to final attend in the Big Show, and see how quickly we are approaching the vision for the Future of Retail -- something many of us have been working for since 2009 or even earlier.
My high level takeaway is that omnichannel retailing is the evolving standard for retail. Retailers will implement a variety of tactics to further implement Omnichannel into their business and marketing operations, with In-Store Experiences central to most aspects of their Omnichannel strategy.
Omnichannel
Omnichannel is an evolving new standard for retail which prioritizes the customer, which requires business practices to adapt to a complex customer journey and marketing practices to adapt to a new “segment of one.”
Fulfillment: Omnichannel fulfillment is a major issue for retailers. This requires Real-Time Inventory accessible from all stores, in-other-words centralized; Distributed Order Management, or the ability to accept and fulfill orders (and update inventory in real-time) from across channels: online, mobile, in-store. This enables drop-shipping from local stores to reduce fulfillment time (online orders); recommendations for local stores where desired inventory is in-stock and can be purchased for pick-up (mobile); have an item shipped from the store, or have an item in a different size, color, etc shipped from a different store for pick-up at a local store or directly to the customer (in-store). Some good examples of omnichannel fulfillment included Netsuite’s “Customer Commerce”
RFID: Omnichannel fulfillment can be implemented without RFID, but achieve the full promise of Intelligent Fulfillment technology such as RFID will be necessary. Real-Time logistics and inventory data, as well as in-store tracking of products and even people (e.g. Intel presented an in-store tracking solution which integrated RFID into a shopping bag), as well as unique customer experiences which simply product discovery and savings.
Segment of One: Aggregating Individual Data combined with Granular Data in Stores, Distribution Centers, and up the Supply Chain will allow for segmentation on an individual basis. This will fulfill the promise of personalization where predictive models based on averages have failed. Technology innovations for real-time inventory and in-store tracking will help, but gaining customers to provide individual data requires stores to innovate around consumer experiences to create value. IBM’s description of Segments of One is comprehensive (if generic), but this goes beyond a profile. Stores and consumer software should provide relevant experiences by determining the context of the store visit: Is she in a rush? Is the dwelling? Is she lost or not sure what to buy?
Actionable Data: Collecting and aggregating data from inventory, in-store tracking, etc., provides information; individual data allows us to determine context which makes data actionable. To gain individual data consumers must perceive value proportional to the risk of providing the information. Value can be created via Savings, Efficiency, and Engagement. Some examples: 78% of customer report they would like to view signs with special promotions (savings), and 67% favor in-store guidance through digital signage (efficiency).
Integrated Data: Breaking down silos is critical to realizing a truly omnichannel store, and the burden rests heavy on software providers. Data must become unified from customer-end to supplier-end and made available to the retailer for real-time analytics. A variety of middleware options to help software vendors integrate data are emerging: e.g. Mad Mobile, Highjump.
Retail Devices
Retailers will purchase a variety of devices that align to their omnicommerce strategy.
Kiosks: A low-hanging fruit for retailers, new kiosks will be installed in 2015 for a variety of use-cases including: bill payment, interactive-tabletop, assisted selling, reporting and personnel management. Both Microsoft and Samsung demonstrated new kiosks, and made partnership announcements: Hardee’s and TGI Fridays will deploy self-order kiosks (Microsoft); Freshwater and ComQi will partner with Samsung to power assisted shopping.
Digital Signage: Arguably the second priority for retailers -- after actionable data -- retailers will quickly adopt digital signage as a low-hanging fruit to implement new in-store experiences as part of their omnichannel strategy. Two of the most impressive exhibits at NRF ‘15 were eBay’s Magic Mirror and Memomi by Memory Mirror (Palo Alto-based startup). Integrating digital signage with real-time data analytics, inventory and fulfillment, and presence technology will be an important part of most retailers omnichannel strategy, if not aspirational since truly integrated and actionable data is still a goal, not a reality, for most (all) retailers. Scala, Lexmark, Toshiba, Samsung, also had noteworthy digital signage exhibits. Lexmark is expected to rollout at Bestbuy, Office Depot, Safeway and 70+ more retailers.
Electronic Shelf Labels: A variant of digital signage, ESL could be a quietly emerging trend. There were two varieties of ESL, one which uses LCD strips to display a variety of content and another which uses e-ink to dynamically display essential information typical to existing labels. The displays can be invoked by presence technology, facilitating dynamic pricing (for example) based on digital coupons stored on a mobile app.
Printer Integration: There were two solutions that addressed our printer integration problem. Ecrebo, a UK based company, which provides an SDK to interface with any printer. The other, Counect, was featured at Intel’s booth and solved the same problem using hardware called Counect Cube. This device operates as a Smart Gateway which utilizes any form of connectivity be-it Ethernet/Wi-Fi/3G/Bluetooth4.0 to interface with the printer and capture transaction data along with customer data.
mPOS: There were a host of mPOS devices from traditional POS players, though Vend and First Data’s Clover were also on site. Retailers will procure devices capable of a variety of payment methods in addition to EMV and Contactless Card. Microsoft Windows 8 POS on notebooks, desktops, tablets and phones were common as well as pairing with iPhone and Macbooks. 1D Laser Scanners, CCD Scanner, 1D/2D Image Scanners, NFC. Zebra Technologies exhibited a variety of Motorola mPOS (acquired), and Korean makers POS BANK and Bluebird had a strong presence.
In-Store Analytics
There is a wealth of information being acquired, and retailers are quickly implementing more strategies to gain better insights across multiple channels and locations. Understanding what is happening in-store is helping retailers improve marketing, assortments (merchandise), staffing, and fulfillment.
WiFi, Beacons, Cameras: Numerous companies exhibited In-Store Analytics solutions which leveraged WiFi, Bluetooth, or Cameras; the majority of them deploying devices integrating one or all of these. People Counting (check-in), Window Display Effectiveness, Customer Journey Tracking, etc. These solutions are packaged as engagement and staff management solutions, but typically were not integrated with inventory, personnel management, or CRM. Some standout companies were Nomi, Airwatch (VMWare), Euclid and RetailNext; however, there is a clear opportunity to provide truly end-to-end solutions. It is also important to note that several data science and analytics companies are forming close partnerships with device (wifi, beacon, camera) manufactures indicated consolidation is possible if not likely.
Retail Growth Strategies
Retailers are eager to grow amidst a global recovery, low cost of transportation of goods (aka cheap oil), and newly emerging markets (Southeast Asia, Africa). With intensified competition from both incumbent online retailers as well as brick-and-mortar retailers they are employing strategies to gain market share and differentiate themselves in ways that go beyond technology.
Diversification: Major retail brands are diversifying their brand with new products and services. For example, Birchbox launched a brick-and-mortar store where customers can take home product samples in addition to purchasing. Ralph Lauren opened a new flagship featuring Ralph’s Cafe, and Lululemon launched men’s line with an in-store grooming parlor.
Going Big: Several retailers presented on strategies for going global. The consistent was to do it, and do it big when you do. Launching 200 new locations as part of a regional expansion strategy was preferred to (for example) 10 new stores in the UK alone.
Storytelling: An extension of in-store experience, retailers will strive to differentiate amongst themselves and -- importantly -- against online retailers by providing a story to customers. The objective is to transform brick-and-mortar into a destination.
Examples of Future Stores
There were a few outstanding examples of technology implementations. Among them, standouts were Rebecca Minkoff, Intel, IBM-Apple, and Microsoft.
Rebecca Minkoff: Hands-down the most complete demonstration of “The Future of Retail” the store implemented useful technology to enhance the In-store shopping experience.
IBM-Apple: IBM launched its MobileFirst for iOS retail enterprise apps Sales Assist and Pick & Pack. Each are powered by Watson, and are part of a new suit of enterprise apps which will include apps for banking, retail, insurance, financial services (insurance), telecom, government, and airlines.
“The Sales Assist app lets sales associates check customer profiles and make shopping suggestions based on purchase histories, as well as check in-store inventory, locate items in-store and arrange to ship out-of-stock items to the customer. The Pick & Pack app, meanwhile, combines in-store proximity-based tech (beacons) with back-end inventory insight to improve order fulfillment, and is 70% ready to go out-of-the-box.” - brandchannel
Microsoft End-To-End IoT: Azure HDInsight and Power BI for Office 365 makes it easy for retailers to track revenue, product searches, customer purchasing, social media activity, etc. Can easily access Power Map for Excel to represent responses to online ads, comparing by region or IP. Kinect for Windows is used for in-store tracking of product and customer movement where data is analyzed by Azure Stream Analytics. Azure Machine Learning can make predictions about individual consumers purchasing interests in coming days, weeks, months; and manage inventory in departments, stores, or region. - Microsoft Blog
Conclusion
Though the full vision of an omnichannel store is still aspirational, investments by retailers and vendors are bringing that vision closer to reality than ever before. This new paradigm in retail --a real-time, data driven, customer-focused, destination-creating, renaissance-- is evolving. I guess that means next year I can go back to New York? Hope so!