National Retail Federation’s Big Show: Getting Back to Basics

By February 11, 2020Power of the Profession
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The Gartner team was in New York last month for the Big Show — the National Retail Federation’s showpiece event for retail technology.

I’ve attended seven consecutive Big Shows. Over that time I’ve seen new technology offerings emerge at a more rapid rate than retailers’ adoption, causing an increasingly large gap between availability and deployment. When I left the show last year, I felt something was needed to reduce this gap and for retailers to find technology they had to invest in, rather than just admire from a distance. I got my wish.

This year, to a large extent we saw technology vendors apply the brakes in terms of continued newness. This allowed retailers to pause for breath. They could look in more depth at the practical uses of technology from prior years that has become more familiar to them over time. Consequently, the show delivered relatively limited newness in terms of technology as the emphasis shifted toward focusing on what I saw as three big themes:

  • Retailers renewing their focus on maximizing the utilization of their store portfolio
  • Artificial intelligence and machine learning are the backbone of most new technologies
  • Strong emerging focus on creating sustainable supply chain operations

Combined, these represent something of a return to the basics of retailing.

Retailers renew focus on maximizing utilization of their store portfolio

Leading retailers have for some time recognized the need to harmonize their store and online operations to present a more seamless shopping experience for consumers, so it was no surprise to see this ambition feature in the show.

During his opening keynote, Microsoft CEO Satya Nadella told retailers that “you have to be cool on your own” —encouraging them to develop their own technology strategy in order to differentiate their offering from the competition.

Interesting shifts in consumer preferences were evident from various presentations, especially in relation to younger shoppers. Even though much of their purchasing activity takes place through digital channels, 81% of teenagers say they prefer to shop in physical stores. In addition, virtually all (98%) Gen Z’ers say they prefer to shop at brick-and-mortar.

Such data points indicate the importance that younger shoppers place on their need for stores to play a dominant role in their shopping experience. Further, order fulfillment from store inventory and  the growing role and importance of distributed order management technology continue to be an emphasis.

This requires retailers to become technology companies, using their data and analytical tools to create their own internal capabilities and expertise to fully understand consumer shopping behaviors.

AI and machine learning are the backbone of most new technologies

AI and machine learning applications dominated the technology on display again this year. Messaging across a broad spectrum of vendors and application types was remarkably similar, with many using the same standard terminology. However, real-world use cases applicable to the supply chain were somewhat limited beyond planning.

At the show we frequently heard of retailers investing in improving customer data quality and capture, then leveraging technologies such as AI or machine learning to create further insight. The show illustrated many ideas on mining this new data currency. All around the show floor and the theater presentations, customer data was THE currency.

AI and machine learning featured heavily in showcasing robotics. In a departure from previous years, the robotics on display focused more on practical use cases within warehousing such as slotting, retrieval, inventory management, pick, pack and dispatch, and less on more futuristic potential use cases within store operations.

Strong emerging focus on creating sustainable supply chain operations

We saw a far stronger emphasis on sustainability and circular economy initiatives than in prior years.   There were numerous retailer-driven presentations on emerging trends such as recommerce, product rental and sustainable packaging. Interestingly, some vendors also talked about how they could translate, for example, benefits derived from improved planning capabilities into CO2 or waste reduction impacts.

We experienced many conversations around consumers’ concerns about sustainability and retailers’ plans to either strongly invest in eco-friendly initiatives or grow awareness of existing efforts. Focus across many brands is being applied to areas such as managing their CO2 footprint, exploring near-shore production, increasing their volume of ethical trade, improving labor conditions and looking to reduce water usage and product packaging. When coupled with the emergent areas of recommerce, rental and sustainable packaging, it becomes clear just how wide the variety of initiatives focused on sustainable supply chain operations truly is.

Tom Enright,
Research Vice President,
Gartner Supply Chain
[email protected]

Source of cover image: National Retail Federation

 

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