NRF 2020: It’s a New Decade and We’ve Finally Put the Retail Apocalypse to Bed
Sarah Holdbrook - NRF 2020: It’s a New Decade and We’ve Finally Put the Retail Apocalypse to Bed - The Robin Report

Written by:

Share

Facebook
Twitter
LinkedIn
Pinterest
Email
Print

In early January, the global retail tribe marched past the Hudson Yards\’ towers, the Vessel, The Shed and construction cranes to cloister themselves in the Javits Center for the 2020 iteration of the annual retail mecca, the NRF Big Show.

It appears that 20/20 proved too tempting an analogy for many copywriters to resist. The session titles implied a crystal-clear vision of the future of retail as the new decade unfolds. In actuality, the show reviewed and previewed the state of retail, displayed a mind-numbing array of available retail-tech and services and introduced a nascent group of startups hoping to make an impression.

The Show Begins

The keynotes were punctuated by politicians (Paul Ryan), pundits/journalists (Kara Swisher), celebrity retailers (Gwyneth Paltrow) and CEOs (Microsoft, Kohl\’s Starbucks, Rent the Runway and many others). The sessions we scattered on a series of stages. Innovation topics populated two stages in 2020, with strategy reduced to one. The overarching themes I observed were the consumer economy, sustainable retail (including re-commerce) and tips for thriving in the age of Amazon.

He Who Shall Not Be Named

While Amazon was not directly represented on any stage, its presence was felt throughout the show. The consensus among the cohort of attendees seemed to be that both Amazon and AWS, Amazon\’s cloud computing service, have won and 2020 is the time for acceptance and adaptation. One keynote that punched back against this notion was Microsoft\’s CEO Satya Nadella. He led the keynotes with a charge to \”Reimagine Retail.\” Nadella, without ever naming his target, aimed to influence the retailers in the room that there are alternatives. Nadella stated, \”Let\’s face it, when you look at online advertising it\’s a monopoly or an oligopoly, pick your word\” (n. b. Microsoft was successfully sued by The Department of Justice in 1998 for illegally thwarting competition to protect its software monopoly). He continued \”We have to change the dynamics here because you have the most valuable asset which is consumer intent and consumer behavior data.\” He touted some features of Microsoft\’s Azure and a suite of tools that allow a retailer to build a proprietary digital online commerce business and added that retailers should be \”thinking through where your data goes and how to protect it.\”

[callout]If a shopper were offered one-day shipping or environmentally friendly shipping options, perhaps in exchange for sustainability credits, they might think twice about whether they really need it tomorrow.[/callout]

As I toured the AWS booth, the representative who walked me through countered Nadella\’s data ownership play by stressing the hard divide between Amazon\’s retail efforts and AWS\’s cloud services. He assured me that AWS customers own their \”special sauce.\” In addition, he spiked the ball as he emphasized AWS\’s dominance in the retail cloud market.

A session titled \”Living in an Amazon World: New Rules\” left little mystery as to the speaker\’s perspective on the issue. Lee Peterson of WD partners spoke to a standing-room-only crowd. His three rules were salient but hardly revolutionary, he said retailers already know what they need to do to remain relevant.

  • Rule #1: Change your organization based on listening to what customers want.
    Peterson presented the six-year lag in the implementation of BOPIS (Buy online pick-up in store) as an example of what not to do. The industry\’s flat-footed response to something customers clearly wanted ceded even more runway to Amazon.
  • Rule # 2: Diversify
    The average four-hour wait for a table at the Palm Beach Restoration Hardware restaurant was served up as an example of brand diversification. Nike Soho\’s indoor basketball court where customers can schedule to shoot hoops with a store associate was another.
  • Rule # 3: Repurpose your retail outlets into fulfillment /showroom/experience centers.
    Create a shopping destination by filling the front of the store with visual merchandising and the fun stuff and use the remaining square footage to efficiently service your customers.

Peterson\’s thesis is that physical retailers who listen to their customers and are not averse to change can thrive alongside an increasingly dominant Amazon.

The Purpose-Driven Consumer

If retailers heed Peterson\’s charge and listen to their customers, the time to adjust to more sustainable practices is now. I can\’t help but scratch my head when I look at the trucks unloading countless cardboard boxes on our doorsteps, but one must not allow the present to cloud one\’s long-term vision. This paradox was discussed in a lunchtime session for the press by IBM Global Managing Director Luc Niazi. He detailed an IBM/NRF global survey of 18-73-year-old consumers the study found an increased interest in sustainability and purpose-driven shopping. Niazi stated that 7 out of 10 consumers surveyed claimed they would pay up to 35 percent more for goods from retailers who operate in accordance with their values. The inner-conflict of the purpose driven consumer who has been conditioned by the instant gratification of one-day delivery was examined. An actionable suggestion that arose from the discussion was an array of shipping options. If a shopper were offered one-day shipping or environmentally friendly shipping options, perhaps in exchange for sustainability credits, they might think twice about whether they really need it tomorrow. In addition, IBM is working to help its clients create more sustainable and intelligent supply chains and encouraging retailers to increase in-store pick up efficiencies to discourage last-mile environmental impact.

Thank You Shoppers

The consumer, whether a purpose-driven shopper or one with a less enlightened point of view, was repeatedly hailed as the economic hero of 2019. In examining the state of the economy, the impact of the of the various trade wars was mentioned, we were reminded of the inverted yield curve scare of 2019 and while it is improbable, we were cautioned that the possibility of a recession in 2020 should not be dismissed. The 2020 election in the United States is expected to have an economic global impact — no predictions on who or how. All of that said, the overall economic chatter of The Big Show 2020 was primarily upbeat.

At NRF I always search for any session with the Global Chief Economist at Deloitte, Ira Kalish, Joining Dr. Kalish on stage this year were Cathy Leonhard Co-head of retail PJ Solomon, Matthew Rubel Vice Chairman, Consumer at MidOcean Private Equity and Max Rhodes, Co-founder CEO of retail startup Fair.

In summary:

  • We should see a continued slowing of economic growth, but consumer spending is holding up for now.
  • Consumers want price, convenience, and customer service. It just keeps getting harder for large retailers to compete.
  • Retailers need to co-opt a metric found in startups: Don\’t look at your employees as a cost center, look at them as an asset.
  • While the trade war between the U.S. and China is sucking most of the oxygen out of the room, the real war is around tech. Tech is and will be the critical issue between these nations over the next 20 years.
  • Unit economics still need to work, especially if there is the possibility of a recession.

Anxiety and uncertainty are simmering just under the surface in this economy, therefore said Matthew Rubel, \”Master your fundamentals. Know your consumer. Keep your costs in line. Keep your powder dry. Be ready for things to change. Use the tools at hand today\”.

New Tools/Old Tools

The tools at hand today were shown in the endless aisles on the convention center floor. In the Innovation Lab where the next-gen tools were on display, I observed some fun technology and interesting moments. Magic Leap is a highly anticipated, enigmatic, and extremely slow to market AR goggle-based device/ platform. After attending an earlier session where Magic Leap\’s director of product development Kathy Wang was interviewed, I saw her waiting in a queue in the Innovation Lab to demo some sweet AR virtual shoes at the Wannaby booth.

  • Wannaby is the sassy new AR upstart on display They visually replace your shoes with a pair in their visual inventory using an iPad tricked out with a virtual AR device (no goggles necessary).
  • I had a nice chat with someone from Arcade. Arcade gamifies store associate\’s performance KPIs, turning goals into online games and contests for individuals and teams.
  • I must admit my double-take was reflexive when I saw a bicycle delivery vehicle on display amidst the robots and flashy technology in the Innovation Lab. The company withbond.com, is promoting a micro-warehousing concept with a last-mile delivery service. You can call it innovation, but It looked like a bike messenger service to me!

Farewell Retail Apocalypse

One tired term that has gone out of circulation at NRF is The Retail Apocalypse. The winds of change have blown in. It seems that a clear-eyed 20/20 vision can show us that those winds, which were fatal for some and devastating for others have cleared a path to adaptation to the new retail climate for the surviving and thriving brands. NRF 2020 gave us some insights, tools, and inspiration to acclimate to the new rules of retail.

Related

Articles

Scroll to Top