NRF 2018 took place between January 14th - 16th with the participation of retail industry stakeholders from all around the world, who want to keep the pulse of the future. I guess it would not be wrong to say the ‘Big Show’ turned out to be a ‘Tech Show’ as the focus in technology is increasing each year. I think the most important message of 2018 was that retailers who fall short to adopt technology - a real game changer - will have a hard time maintaining their position against the customer who is getting more digital and is changing the behaviors. The 2018 Technology Show was the exhibition on the effects of cognitive computing on customer experience. Although they have a broader portfolio of solutions, a significant number of information technology companies participated NRF with their cognitive computing, artificial intelligence and data-driven solutions, both in the exhibition and the conference sessions. There were 2 main missions that retailers and technology companies agreed on;
1. Customer expectations are augmenting day by day. We must further improve the Customer Experience.
2. We must use technology more effectively, not only for the customer but also to increase our business efficiency.
The prominent message of NRF 2018 for North America was the output of the Retail Economy Round Table. Gad Levanon, chief economist of the Conference Board North America division, predicted that consumer confidence would continue to rise and reach a record level. He stated that the 2017 holiday season had positive macroeconomic impacts on the 2017 economic figures. Retailers and vendors had consensus that 2018 will also have positive outcomes. Another critical issue was addressed in a panel chaired by David Marcotte from Kantar Consulting - Failures in international growth. The highlights were;
I. Problems in logistics and operations management, licensing and property management,
ii. Cultural adaptation; employee and product-related issues,
iii. Brand development; marketing, logo and naming can cause failure to grow in the international market,
iv. The payment methods, local parties in supply chain and logistics, compliance with law and taxation.
The most technology-focused scenario was based on a seamless customer experience with a highly efficient customer service; self-service and associate-free. Solutions like the components of an Amazon Go-style model retail in food retail were at the forefront. Fashion retail-focused solutions that detect customer's body or foot measurements with 3D image sensors and recommend clothing or shoes based on this data, digital mirror or monitor used to order complimentary items for the one tried in the fitting room and systems that deliver customer comments on the selected item were the ones attracting most of the attention. I can express my takeaways from the event in 3 technology-nested headlines;
Restructuring of shopping processes:
We are witnessing that shopping starts with non-traditional methods. With kiosks running on augmented reality & hologram technology, smart shelves displaying information & 3D moving images on products and easier access to rich and real-time data, information technology has become part of our daily life. At the NRF, there were booths exhibiting vending machines - for consumer electronics, cosmetics and make-up retailers - which automatically recognize the customer and deliver an easy and secure shopping experience. It is possible to provide a better service to the customer without incurring square meter based costs. For example, Apple's business chat application coming with iOS 11.3 in 2018 Q2, will enable the user to interact with the businesses without making a search on iMessage to find the business support accounts. The consumer will write a text and the message will be conveyed to the intended recipient; sales, customer services etc of the targeted company. Amazon Go, which started to serve the employees almost a year ago, was still an attraction point.
Focus on the importance of physical stores and sales staff:
Physical stores play a critical role in building relationships with the customers. 9 of the top 10 e-commerce companies have at least one physical store. However, physical stores are not utilized enough to further strengthen customer relationships. According to statistics, almost half of the Gen Y and Gen Z visit the physical stores, more than they did the previous year. The physical store is becoming much more critical to develop the brand's relationship with the consumer, beyond shopping. This shows that a differentiated, more personal service and a better demand forecast will be more crucial. At this point, I have to mention the growing importance of the sales associates. The technological advancements serve the customers and increase customer satisfaction while they can also serve the staff and increase employee satisfaction. The sales associate applications - for the gusto-driven consumption retailers - that help the staff access the customer’s profile & purchase history, enable transfers of items across stores are powerful tools. On the other side, equally powerful tools for the grocery retailing are in-store applications helping the associate with shelf layout, inventory management – notifying critical conditions and enabling interaction of the staff. Thus, it is crucial to employ smart systems, mobile technologies and infrastructures both for building self-service customer experiences and for making real-time data available to the associates.
The importance of external factors in consumer demand, weather:
As in recent years at the NRF, the data-driven forecast and optimization had the leading roles. But the highlight was the automation of these smart systems. Another noteworthy concept was the importance of predicting demand based on external factors such as weather, local events and special days. Due to seasonal irregularities of our time, the weather seems to gain importance as a demand forecasting factor which highly affects the supply chain costs and planning. For example, the vending machines that are getting more popular day by day, utilize data such as the weather conditions of their exact location on the street and events/shows in the vicinity. Managing a business a vending machine efficiently is almost equivalent to anticipating the exact demand.