Every year for three days, the NRF conference in New York is the epicentre of all that is exciting and inspiring in retail right now.
And because there is so much to take in, and so many brilliant insights being revealed, it’s easy to come away with your head spinning.
We don’t blame you — our team was pretty exhausted from it too! Now back at HQ, we’ve recapped on the best new discoveries on display and the most valuable wisdoms gleaned from industry pros.
Here are our top 5 learnings from NRF 2019
1. The store is back…
…but the truth is, it never went away. The industry is just re-focusing its efforts to create more connected and enthralling physical retail spaces than ever before.
The evidence is not only in the stats — such as the 75% of 2018’s holiday orders at Target being fulfilled by brick-and-mortar locations — but also by endless innovation in the sector.
Small store formats were the talk of the show, with AiFi showing its NanoStore, a tiny format white label self-service store. Customizable for any retailer, the 160 foot store is packed with technology such as facial recognition, movement sensors and computer vision to analyse customer behaviours and inform the merchandising.
Nanostores opens up huge potential for seamless convenience retail, close to where customers live. Ikea too plans to open 30 small format stores in urban locations, as more and more consumers are living in cities.
It’s not just small stores — all sorts of retailers are innovating the store experience. Everlane allows its customers who’ve registered online to shop “walletless” in stores. And Sensormatic Solutions have built a self-service returns kiosk, also on display at NRF, so that shoppers can avoid long lines.
Brands are also testing out retail theatrics at super-sized flagships, like Levis newly opened flagship in Manhattan — at almost 17,000 square foot it’s the brand’s largest globally, with a focus on personalisation, customisation and hyper-locality. The North Face has been testing out weather simulators in its Manhattan megastore and in November Nike opened a 68,000 square foot fully-digital flagship, “House of Innovation 000”, also in NYC.
The Home Depot’s director Albert Vita, shared details on how its pilot store in Atlanta quickly tests more than 90 ideas at any one time. Its “living labs” creates fast, real-word evidence on which solutions are worth investment.
However, Vita warned that the attention-grabbing customer-facing solutions are just the tip of the iceberg. He advised the audience that the back-end systems ― supply chain, marketing, inventory, e-commerce, IT operations and human resources ― all need to be upgraded too to support the ever-evolving store. This is as critical for the large flagships as it is for the small format stores.
2. It’s a home run for AI
At NRF, Deborah Weinswig, CEO and founder of Coresight Research, revealed that the retail industry invested $3.4 billion in AI in 2018 — which is more than banking invested.
And research from the McKinsey Global Institute has shown that the retail industry could reap global benefits from AI worth $400 billion to $800 billion — more than any other industry. So, AI is hugely important — what do we need to know on the latest?
GUESS is a great example of a retailer implementing AI to aid decision-making. The brand was at NRF to discuss its pilot store in collaboration with Alibaba in a session titled ‘The Artificial Intelligence Revolution Is Here’.
The partnership resulted in an innovative store which implements smart mirrors to their full potential (finally!) as well as racks and AI-enabled fitting rooms to enhance customer service and provide recommendations. In this latest iteration of the tech, GUESS is able to use reporting to run its store more efficiently — which is the golden key to these much-discussed technologies, using the tech for insight beyond the buzz. Clever stuff!
Automation was a huge topic for painful and expensive last mile delivery with the timely release of the NRF’s latest “Consumer View” survey reporting that 75% of U.S. adults polled expect all delivery to be free.
Automated cars were the focus, with Kroger in town to discuss the roll out of their Nuro driverless delivery vehicles last month.
Having tested the tech on public roads in one Arizonan city last year, the supermarket retailer will be implementing the vehicles across their network at a flat rate charge of $5.95 to the shopper for same or next-day deliveries.
And it’s not just delivery getting automated — Caper’s automated shopping carts remove the need to checkout.
3. Brave, cool, good brands
According to McKinsey, more than 60 percent of Gen Z consumers are attracted to smaller “new” and “fun” brands. That backs up Ryan Brazelton, Executive Creative Director of Interbrand, NRF presentation where he spelt out the three critical components to good brand building today: be brave, be cool and be good.
Brazelton worked through each value, starting with brave, which he defined as abhorring sameness and laughing at risk. A brave brand is one that is innovative, passionate and relentless. Brazelton argues that humans crave vision from the brands they love.
He cited Casper as one of the brands he sees as brave, entirely revamping the mattress shopping experience, globally.
Cool as a brand value is not about following trends — it’s about being timeless and instinctual, staying true to a unique attitude. There are plenty of examples of cool brands that we interact with daily — Apple, Nike and Sonos among them — but it was Brazelton’s inclusion of soap brand Method, that particularly stood out to us.
The brand, which has a clean aesthetic and bold use of color, collaborates with buzzy, relevant brands frequently and has a real sense of purpose around minimising ocean plastics by using refillable packaging.
Lastly, good brands are those which are inspired, authentic and human in their purpose. Stands for something and will use those beliefs to create real world change.
Patagonia embodies this value, as a brand whose ethics sit front and centre and are traceable in every decision or product the company makes. Shinola is another example, as a luxury brand committed to revitalizing industry in Detroit.
Being good can’t be faked, as Brazelton highlights, “people can smell real purpose”. Here’s to more brands defining what makes them brave, cool and good in 2019!
4. How to drive innovation
Naturally there is innovation in spades at NRF, but as any retailer knows, innovative ideas can be tricky to steer through the business.
As agile retail is one of our hot topics at the moment, and requires a shift in a retailers’ mindset business-wide, we particularly enjoyed the insights shared by Carrie Ask, president at Men’s Store and David Cohen from La-z-Boy.
This is what we learned:
- Don’t be blindsided by the idea that you have to throw the entire rulebook out of the window. Today’s core retail principles are the same as they ever were — like the customer is king and strategies should be built around the 4 Ps (product, price, place and promotion). However the tools to deliver on these principles are evolving, becoming smarter and offering deeper insight than ever before.
- Start with the customer — know what it is they want. “For us, it’s inventory availability and customer service” said Men’s Store’s Carrie Ask.
- Create an environment where people aren’t afraid to make suggestions or get it wrong.
- Incentivize success. La-Z-Boy awards ‘Bravo points’ to staff who come up with new ideas, which are communicated across the business.
5. The very best new tech
Being tech creators, we have a soft spot for the innovators who bring their fresh ideas to NRF each year. Our favourites included Glympse, a location sharing tech which enables expedited in-store pick-up.
By sharing their location, customers are able to have their purchases ready and waiting for them. Retailers can also share the location of home deliveries, aiding transparency on arrival times, as well as arrange curb-side delivery or pick-up for absolute convenience.
Chatter, a text-based chat bot also places the shopper first, streamlining the capture of feedback. Immediately after a purchase, customers are contacted by the chat bot direct to their mobile, asking for feedback on their experience. The immediacy of this fuels responses — Chatter say that retailers who deploy this solution receive eight times as much feedback versus traditional approaches.
And then there was Marty, the front of house robot, used by grocery chain Giant Foods. Marty roams the aisles of Giant Foods stores, interacting with customers, helping them locate products and checking prices. Giant Foods president, Nick Bertram, announced at NRF that pilot tests of Marty will now be rolled out to all 172 stores in the chain.
We love these consumer-centric developments — they perfectly reflect the core values of agile retail.
Next up for the Nextail team is EuroCIS in February, where our co-founder and CEO, Joaquin Villalba is speaking. Come and say hi to us if you’re there, and stay tuned for our event recap!
Nextail is a smart platform for retail merchandising. Developed by retail experts, it delivers agile data-driven decisions to meet increasing consumer demands. Using Nextail’s AI and advanced analytics, global retailers like Pepe Jeans, Stefanel and Gocco are automating dynamic buying and merchandising. Within weeks, sales and margins increase while stock levels are reduced.
Visit our website to see how some retailers are already using AI and machine learning to transform their core merchandising decisions.
