Key tech trends from NRF 2020 - and how they will impact customer experiences
Brian Elliott gives his thoughts on what lies ahead for the year based on his time at NRF’s The Big Show 2020.
As has become customary on the retail industry event circuit, NRF’s The Big Show kicks off the year in January. It is a great event that gets the retail sectors diverse brands and the vendors that help them deliver great experiences together to learn, share and talk about current market conditions and how the industry is evolving. The 2020 event has seen attendance markedly up on 2019 at over 38,000, making it one of the biggest shows ever.
Attendance being so high is an encouraging thing, but what really struck me, and other colleagues from Periscope By McKinsey, was the buoyant mood. Unlike recent years, where retailers have arguably been paralysed by issues such as economic uncertainty or what ‘to do about the threat of online’, this year the mood was much more one of action. Whilst in the past these issues meant retailers faced risks in terms of how much to invest in transforming their businesses, or when to do so, one of the biggest challenges was also what to invest it in.
Technology in the retail sector evolves at a rapid pace, and there is no shortage of places that a retailer could invest for their future. The retail sector now seems to have realised that it must accelerate investment in and experimenting with technology. Not everything will work, but a test and learn approach is essential and the retailers who crack how to scale new technology will be the winners, securing the competitive advantages needed for a strong growth-focused future.
This is an important decision to reach, as technology is disrupting every interaction in the consumer-retailer-manufacturer chain. Data, sharing it, analysing it, and using insights gained to inform better and faster decision making has been a central tenant of how this chain has evolved over the last decade. Automation too has been critical to the evolution of retail, whether ordering in supply chains, analysing data to develop assortment strategies or present real-time pricing/promotions and personalised recommendations to consumers.
But as was evident at The Big Show, there are ever more creative and unexpected ways technology is changing retail, perhaps signalling that both retailers and shoppers are stepping up their game and making greater use of it:
- In China, a company has developed a consumer app that allows people to band their purchases together as way to encourage retailers to offer bulk discounts.
- New AI visual technologies are allowing retailers to passively observe, track and analyse where shoppers are looking in store, what products they look at, how much time they look at them, etc.
- Consumers will be increasingly able to shop online and simply pick up groceries into their cars, with machines bringing products together and making automated substitution recommendations when products are not available.
- Cash registers that can scan groups of products visually and in automated ways (without barcodes), even produce in plastic bags.
- Electronic shelf labels continue to evolve allowing prices to be changed instantly and additional product information to be presented to shoppers. We can certainly expect to see retailers using this technology with its performance and design flexibility advantages.
Whilst technology is offering new ways the traditional retail models are being disrupted – the right way to think about these is as opportunities, in exactly the same way the internet proved to be. Technology is not the only substantial force disrupting retail: social fears, eco anxiety, financial worries, and social disconnection are all changing the behaviour of shoppers and the expectations being placed of retailers.
The key word in the paragraph above is behaviour. Understanding the behaviour and needs of customers has been at the heart of successful retail for hundreds of years. Today, we have more information about customers than ever before, and the wider market environment, the challenge is how to make sense of it. But it’s not a one-way street, customers too have much greater access to data that informs their buying decisions.
Data is the key to turning disruptive technology to the advantage of retailers. Behaviour evolves quickly, but data signposts those changes, and with regular analysis we have the opportunity to observe them. Therefore, no retailer should be blind-sided by what they perceive as ‘sudden change’ and feel compelled to make knee-jerk decisions.
Retailers need to see themselves as in a state of continuous evolution, looking for the next tweak that needs to be made to their offering, testing new ideas and learning from them. At The Big Show, we are seeing retailers no longer frozen in the headlights of uncertainty but looking to how they can evolve to meet the challenges and opportunities that lay ahead, setting themselves on a growth trajectory and acting to achieve. It was an exciting show and everyone is clearly fired up for what 2020 has to offer!