NRF 2018 - It's BIG!
If you believe the headlines, Mark Twain may have written retail's epitaph:
"The reports of my death are greatly exaggerated"
On the evidence of the first day at NRF's BIG Show in New York, instead, he wrote the rallying cry with even Doug McMillon, Walmart CEO quoting Twain during a keynote session in the afternoon.
It's not so much a resurgence of retail but a re-branding if you will.
They say there's nothing new under the sun and to a large extent that's true but on the evidence of today, what changes is the perspective.
For example, last year, we were hearing about Artificial Intelligence; this year we are hearing about Artificial Intelligence blended with different technologies to create real meaningful value for the customer.
That's a fundamental shift.
Each day at NRF we are calling out our top two trends which we feel are going to make an impact in 2018.
Trend 1: Blend of Technologies
That evidence of the blending of technologies to create a new solution which now adds real value to the customer.
AI and facial recognition for example. Before it was one or the other, each in isolation a blunt, incongruous tool. Marry them together and suddenly a proper usable, valuable offering which the consumer can relate to.
Trend 2: Virtual Reality Finds A Home
With the convergence of physical with virtual as brilliantly demonstrated by Roots in an inspirational Innovation Lab session, Virtual Reality has finally found a natural home.
It felt as if we were searching in the dark for a suitable use case for VR but now Roots have demonstrated that it is possible to create wonderful immersive, interactive experiences by blending the two.
Expect more of this in 2018.
And mention of the Innovation Lab brings us to a fascinating insight into where both NRF and retail thinking is heading.
Not even standing room at the Innovation Lab
In 2017 the Innovation Lab stage occupied a small area which was never really that busy.
In the two sessions we attended today on AI and emerging technologies it wasn't even 'standing room only' - there wasn't any standing room!
Retail and Technology converging even further.
Great first day where the heavyweights of Levi and Walmart were out in force so it seems fitting to leave the last to Walmart CEO Doug McMillon commenting on the current state of retail:
"If you're bored right now, you're not paying attention"
Doug McMillon, Walmart
Amen to that.
We met the future of retail today - well sort of.....
Meet The Future Of Retail
Many would have us believe that the future of retail is here.....now. But that's not quite true. What does seem to be true is that we can at least, possibly for the first time, begin to see what the future of retail might look like.
Whilst there maybe many pretenders to the throne and the messaging this year (in certain instances) bore a disappointingly familiar look and feel, it is undeniable that NRF 2018 marks the turning of a corner.
"We can at least, possibly for the first time, begin to see what the future of retail might look like"
Andrew Busby, Retail Reflections
So what did we learn on day 2 of Retail's BIG Show?
Apple taking a bite out of the Big Apple.
Need to check on your latest version of iOS and can't wait for 9am the following morning? No matter, Apple have you covered. Their store on 5th Avenue is open 24x7.
So if the urge strikes at 3am in the morning, just wander down to Apple if you need a quick fix.
Or if you're a shirt (and whiskey) lover why not pop down to UNTUCKit where you'll be greeted with a wee dram no matter what time of day.
Trend 3: Services & Experiences
It's clear that spending on services & experiences - rather than goods - will continue to grow. And with that, so too experiential retail. Which is all great news for stores.
Talking to numerous people at the Show, one thing is agreed upon; there will be less stores in future and closures will continue during 2018 despite the optimistic economic outlook in the US (not so the UK which has it's own rather special challenge!).
But the good news is that those stores which remain will be better than ever before and it was interesting to hear the positive take on automation which it is envisaged will free up store associates in particular to do more interesting tasks.
Tired of manually checking inventory? Help is at hand!
Trend 4: Frictionless Becomes A Reality
We've been hearing about 'frictionless' commerce and 'seamless' shopping experiences for years and in truth they've largely been marketing taglines.
Now, finally, the concept is becoming a reality.
And interestingly, much of the focus was again around the store as opposed to online.
Whether it be easier, speedier checkout or clearer inventory availability our store experience is set to become a much slicker operation than today, predominantly through the empowerment of the store associate.
And this is an area where many of the smaller startups appear to be thriving.
Whether it be Tulip Retail with their store associate mobile assisted selling and clienteling or Newstore which provides a mobile app to allow easy, quick access to product, inventory, pricing so that the store associate can build a relationship with the customer easily and quickly - one thing is for sure....
Retail must adopt a different perspective on its frontline store workforce. For too long store associates have been perceived as the most costly line on the balance sheet, instead of the most valuable asset a retail business possesses.
That outdated, old fashioned way of thinking must change and change quickly; otherwise the naysayers claiming the 'retail apocalypse' is upon us, might just well be right.
Day 3 was - perhaps fittingly - book-ended by the one technology which everyone was talking about at NRF 2018: Artificial Intelligence.
IBM and Watson starred once again at NRF.
IBM & Watson once again starred
There seemed to be a realisation this year, not evident in 2017, that in order to survive in the brutal retail environment in which every retailer now finds themselves, AI is not just a technology, it is a lifeline.
"We believe in AI" Tommy Hilfiger
And all the past messages of 'augmented' reality, 'real' reality and so forth finally found fertile ground at NRF.
There was a palpable sense that whereas before, AI was perceived as part opportunity part threat, now it is seen purely as opportunity. Able to support human effort and interaction rather than usurping it.
In an engaging session in the morning we heard from Salesforce and their take on AI; and whilst our new Dutch (stand up) friend pointed out that 3,250 words have 'AI' in them, perhaps 'Retail' is the most important and relevant word for this discussion.
During an analyst briefing we heard from NRF and IBM on the state of the nation.
"The challenge is twofold: to understand the non traditional competition & pick the right mix of technologies to invest in"
This has never been truer. And that neatly sums up the challenge for retailers today; just where do I invest my (extremely) limited funds?
For young startups the question is a simple one; but for the more established, traditional retailers it poses all kinds of difficult questions - many of which are currently unanswered.
And from IBM some interesting insights from their research of 15,000 Gen Z from around the world, complete with this somewhat startling fact:
"98% of Gen Z prefer to shop in store"
So, with that as the context, what were the top 2 trends which caught our attention on day 3 of NRF?
Probably the two most talked about at the Show: Artificial Intelligence closely followed by Stores. But we'll look at the stores first....
Trend 5: The Pivotal Role Of The Store
"There's nothing more important for a retailer than the store - it's pivotal to success. Pureplay days are numbered"
Andrew Busby, Retail Reflections
The first might be generally accepted now and this shone through at the Conference but the second? Are pureplay online only retailers really becoming extinct? Well as always, yes and no. The point being, stores are vital.
Stores are rapidly becoming pivotal, being at the junction between customer experience, supply chain, digital and physical.
They embody the brand and thus it follows that everything about the store must ooze brand appeal.
Trend 6: Artificial Intelligence Equals Retail
They say that you should leave the best till last and that's exactly what we've done.
NRF 2018 will come to be looked upon as a watershed moment in the history of retail; the moment when Artificial Intelligence came of age, the moment in history when people realised the awe inspiring potential of this technology.
"The narrative has shifted - Artificial Intelligence will provide the platform upon which retail can grow & thrive"
Andrew Busby, Retail Reflections
Compared to 2017, we didn't hear anyone discussing AI in itself; the fundamental change was that NRF 2018 saw the narrative shift - now AI was being discussed as an inclusive element of a retailers brand armoury.
We'll be providing some more Retail Reflections on NRF 2018, but for now, Watson - take a bow.
Retail Reflections is a retail analyst consultancy. Founder & CEO Andrew Busby is ranked as one of the top retail influencers globally by Vend and is an IBM Futurist.