NRF 2020: A Demonstration in Determined Optimism
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Two weeks ago, my RSR partner Steve Rowen and I completed the annual trek to New York for the National Retail Federation’s “Big Show”, to immerse ourselves in yet another mammoth display of glittering tech and exciting retailer case studies about how this-or-that technology solution increased revenue and profits xx%, won over hard-to-please consumers, and made employee work that much more fulfilling than ever before. While the details have changed over the approximately 30 years that I’ve been going to the show, the success stories sound the same.
It’s all good. As my RSR partners and I have been preaching since our inception, success in retail is measured in tenths of a percent improvements, and so success stories are often about how a retailer shaved something off the cost of doing business or offered some new value to consumers in a compelling way that didn’t break the bank. “Retail is Detail”; pennies matter, and they do add up!
The other point to make here is that at its heart, Retail is a good business – not in the “we’re all gonna get fabulously rich” sense, but in the “we doing good things for people” sense. People don’t buy what they don’t want, and a retailer’s job is to help their customers solve their lifestyle problems in as efficient and satisfying a way as possible. The best retailers want their customers to outsource those problems to them (“I always go to Nordstrom to buy my shoes”, or “I always go to Staples to buy my home office supplies!”). Nothing pleases a retailer more than when a consumer talks about “my store”.
But let’s face it – the years between the introduction of the Apple iPhone in 2007 and this year’s NRF 2020 event have been brutal. Even without a Great Recession, global trade uncertainties, and the increasing gap between the “haves” and the “have nots” packed into those 13 years, the entire industry has been rocked by how completely consumers have wrested control of the selling side of the business with their adoption of “smart” mobile technologies. The impact has been profound. Shopping is now a 24X7 activity, and demand (consumers) doesn’t to have to go to a store to meet supply. Now, supply goes to where demand is – increasingly directly and without an intermediary. Retailers (and their supply chain partners) weren’t ready for that at all!
And that brings us back to the NRF “Big Show” event. Since 2010, the show has been all about how retailers can (1) create a great digital experience for consumers outside of the confines of the physical store, and (2) bring that digital experience into the store so that consumers will keep coming. But the fundamental question, how to anticipate demand and profitably fulfill it in this new environment, has been hard to answer. Item sales alone aren’t a good enough indicator for consumer demand anymore, and how to get supply to the best place to fulfill demand has gotten increasingly complicated. Given the fact that retailers’ 20th Century processes and systems assumed that demand had to come to a store in order to be fulfilled, “omnichannel” fulfillment strategies have been stunningly disruptive to the smooth running of the business.
But retailers are optimistic that they can solve this conundrum. They just need a lot better information about consumers and the markets they compete in than they’ve had before now – and they need it much faster.
Here’s the good news: there’s a technology for that! Last year after the NRF 2019 event, we pointed out that “AI (was) the one technology that stood out as this year’s top Shiny Object at the NRF Big Show.” Fast forward to 2020, and we were able to see a plethora of solid use cases that AI-enabled solutions can address. Whether related to the customer facing side (hyper personalization), demand planning (the ability to model demand, using market, competitive, and environmental factors, in addition to past sales), supply chain (positioning inventory for complex fulfillment strategies), or D/C and store operations (robotics), AI technologies have found their way into solutions that are intended to address the new business reality.
While it’s too early to declare front-edge AI enablement as “every-day practical”, solutions providers and early adopters are moving there very quickly. Think for a moment about how fast this has occurred! It was only nine years ago in 2011 that IBM’s Watson competed on the TV game show Jeopardy! Nine years later, our friend Dan Berthiaume at Chain Store Age wrote after this year’s show, “The most striking thing about the NRF 2020 Vision conference was the lack of striking things”, in spite of the fact that AI-enablement was all over the place.
AI the “shiny object” is so-o-o 2019. Now we need it.
ED. NOTE: Please join us for RSR’s annual Big Show review. Learn about the most interesting technologies heading into 2020 – and who really caught our eye.
Attendance is of course free, your information will not be shared with anyone, and you can register here: