Recently back from NRF – Retail’s Big Show 2016 – I have had some time to digest my impressions.
What really struck me is that the speed of change – the inevitable one –increases all the time, and with that the need to allow for agility and flexibility for managing change. My three key learnings from NRF:
New retail concepts demand technology change
NRF is the arena for exploring emerging new concepts and technologies that will change the retail business. The challenge is to identify which ones are relevant in the long term and which will stay a hype to eventually be phased out.
Several new concepts introduced demand a significant technology shift, which companies often fail to recognize. The booming Click-and-Collect trend is one such example, it´s often treated as a channel of its own without a need to be integrated into existing IT infrastructure. The result is that companies have two sets of systems, one older legacy-based, and a more modern one – but they are not talking to each other. To be agile enough and equipped to manage new concepts, like a click-and-collect solution, the company must have an enterprise resource planning (ERP) backbone system that makes it easy to connect new front-end solutions as the need arises.
The retailers that succeed in adapting technology rapidly enough to fit the emerging new retail concepts will also be able to handle the transition to the new world of modern commerce with its indefinable touchpoints, real-time transactions and consumer in charge, and will in the end, win the battle of becoming the favored brands of the future.
Don’t be afraid to try and fail
What I really like about NRF is that it´s the testing ground for many new concepts and technologies that will shape the future retail business. Many of the front-end ongoing projects that are now being hyped and could be viewed at NRF, will not become more than just hypes that never turned into real business technologies. However, they are still relevant for the sake of them being refreshingly new and seeds for future innovation.
For example, it will be interesting to see how the Virtual Reality pioneer concepts displayed at the show will develop, and the IoT frameworks allowing for better timing with personalized offerings. I am also curious to follow the automated sales assistants via robots or humanoids, facilitating the automation of cumbersome tasks in larger stores, allowing real-time transparency of the physical inventory levels and ensuring the most effective and automated replenishment. I will follow these developments closely and learn from both successes and failures.
The value of the physical store and customer service
A number of “experts” predicted the downfall of the physical store in the last ten years. However, this has recently changed. Technology plays a key role here as well – besides being paramount in carrying the brand visibility, the store now also serves as a hub for the omni-channel retail experience. Stores are competing in providing the coolest digital experience of a brand in the physical store; it becomes a virtual playground and key value-add at the same time. I recommend taking a look at the blog post from Guy Courtin @ Constellation view on NRF for more insights on this topic. The younger generations do not only act seamlessly through all channels they demand it and as their ‘real-time’ expectations on time stands for a larger part of the buying power (representing 75% of the workforce in 2025 worldwide and their expenses are expected to exceed the boomers)[1] this is the new reality of commerce.
Another challenge is the generational shift with the entry of Millennials and later Gen Z on the market and what it means for customer service – nicely defined by Forrge at one of the Big Show’s seminars. The main question is how a store will be able to handle the in-store experience effectively when the workforce goes from a handful of jobs in a lifetime to more than 15, and many of them consider the job as a necessary evil instead of what defines you as an individual (as it has been for many in earlier generations) . How you enable world-class service with the difficulty of ensuring continuity will become one of the central aspects for retailers to handle future success. Perhaps robots will part of the answer? However, I am a firm believer that nothing will beat the human interaction in stores when it feels authentic and not forced by a script as it seems to become more common in some larger chain stores. And in that case, I also believe that humans will actually become a key competitive advantage in the future retail business.
If you would like to know more and wish to talk to us at IFS for Retail, please contact me or visit us @ IFS Retail Forum at Mall of Scandinavia on the 10th of February!
[1] Source: Nielsen. Adapted: GS&Inteligência-GS&MD
