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Friday, December 02, 2022

NRF 2022: 4 key trends from this year’s Big Show

The National Retail Federation’s Big Show continued as scheduled at the start of the week, amid looming COVID concerns, indicating how the industry as a whole is gearing up for a comeback from the pandemic. Several brands, from small startups to established retail and tech giants, made the announcements and will continue to propel the industry forward and drive economic recovery. There were a number of key themes on display that indicated what the future of retail would look like in the coming decade as we continue to witness the blurring of the digital and physical worlds.

Blending the digital and physical worlds to meet customer expectations

Several major retailers, including Target, Walmart, and Ralph Lauren, were presenters during the NRF and all have one thing in common — the physical store is here to stay, but the digital world is on the rise. Obviously over the past two years we have seen a huge increase in e-commerce sales due to the nature of the pandemic, but for many consumers the physical world is still important. The IBM Institute for Business Value and NRF released a consumer study prior to the event where 72% of respondents still used the store as all or a primary part of their buying experience. However, the preferences of the younger generation are changing. 36% of Gen Xers prefer a hybrid shopping experience.

And retailers and tech companies are taking note. Meeting customer expectations for all demographics, while challenging, is not impossible in today’s world. Adobe is betting on the physical store with new solutions and capabilities built into the Adobe Travel Optimizer, the Adobe Experience Platform and Adobe Commerce. New technologies will make in-store fulfillment faster and more user-friendly for employees and customers. The messaging capability will make it easier for retailers to reach customers through their preferred mode of communication with a targeted message.

On the retailer side of the business, Target bet big on physical stores at the start of the pandemic and it paid off for big box stores. Target made pivoting easier, providing more fulfillment options for customers, including curbside, in-store, and same-day delivery from the nearest store. This change to keep the customer safe and making purchases however they are comfortable, will continue.

There was also some talk about the future of retail and the metaverse. While it may be a few years away, it’s important for retailers to start looking to the future in order to plan for what’s to come. Shall we shop in the metaverse? Will we be buying things for our digital self? Or will the Metaverse be just another channel to reach consumers? While the Metaverse is largely nascent at this point and a bit overgrown in its early days, that doesn’t mean that Metaverse applications like avatar-powered customer service, augmented reality shopping, 3D commerce, and more. From Walmart to Ralph Lauren, there’s a general consensus that this is the area of ​​the future for retailers. Time will tell, but the important thing is to start planning now.

Diversity, equality and inclusion initiatives abound

Over the years many retailers have aligned with the DEI initiative. In a keynote presentation, James Fripp, Chief Equity and Inclusion Officer at Yum! Brands told attendees that if they weren’t concerned about doing enough it’s likely they weren’t doing enough. Improving diversity at all levels of organization, from the retail floor to the board room, is an important part of the new retail reality. Being able to connect with clients of all backgrounds requires employees from all backgrounds.

Walmart CEO challenges retailers to be transparent with their diversity initiative. Walmart releases an annual report with searches on employee demographics and advancement. Of course we need to see more in 2022.

Sustainable Shopping and ESG

This is not a new trend, but it is increasing. Smaller consumers are pushing for greater sustainability in retail and many more than greenwashing and lip service has been offered for so long. They want real change. According to the same IBM Institute for Business Value survey, 62% of consumers are willing to change their shopping habits to reduce the environmental impact. And half the respondents are willing to pay a premium for sustainability.

Retailers will have to answer. In a session with Walmart and Rothy, the two organizations discussed ways to create and maintain sustainability goals across the organization and to openly report on them. In a similar session, Ikea’s US CEO and Chief Sustainability Officer shared that it is important to create initiatives that inspire others, but that must come from the core of the company. I am sure this topic will only continue to grow in popularity as the younger generation becomes the bigger buying audience.

Over the past year we’ve seen Amazon (AWS), SAP, ServiceNow, Microsoft, Salesforce, and many other leaders in cloud, technology and enterprise software deliver versions of the “sustainability cloud” and retail. This technology will have a huge following because they want to prove to consumers that their ESG efforts are much more than just “greenwashing”.

Leveraging Technology for Customers and Employees

Technology, both existing and emerging, is playing an increasingly important role in the retail experience. Major tech companies are stepping up to deliver technologies that will help retailers take the customer experience to the next level. For example Qualcomm showed how IoT technologies are helping retailers to digitally transform. From smart shopping carts for frictionless checkout to immersive smart displays with innovative features, we’re going to see a huge change in technology in stores over the next few years. Biometric display using fingerprints and known to most of us as “Face ID” to make payments will continue to gain traction for both security and convenience reasons.

Some retailers are also focusing on turning shopping into a destination and a gathering place. Using Backcountry, an exclusive Outdoor Retailer, Oracle Retail XStore point-of-service, retail associates will be empowered with the data they need to take the customer experience to the next level. With a branded, dedicated support team, Backcountry shoppers can expect a similar level of service in and out of stores—a popular trend in concept, but something that hasn’t yet been fully realized in the wild. Such technologies from Oracle will serve as a catalyst for the company’s next generation of headless CMSs such as Contentful and together with Adobe to realize the potential of omni-channel.

I am also optimistic that technology will be the key catalyst for truly delivering the next generation of customer experiences, whether it is a blended experience or just delivering great data-driven customer service. For example, cloud-based CX tools like Zendesk, Five9 and Talkdesk will be critical to meeting customer needs and are layering APIs and critical AI capabilities to automate and improve service round the clock. I’m also excited at the power of the customer data platform for retail, and it’s still maturing. Trezor Data, for example, is blending CX, Contact Center and CDP, with a focus on making all data available to Contact Center agents to significantly improve customer outcomes. CDPs will assist every part of the journey, and players in this area including Twilio, Microsoft, Adobe, Salesforce and Oracle are actively working to build the next generation of CDPs.

Finally, it’s worth noting that technology isn’t just for the consumer. Many retailers are also keeping the employees in mind and equipping them with the necessary tools to make their job easier. This includes more front-line tools like Honeywell’s technology that enables voices to be raised and hands-free, and to reduce aisle clutter. There is a plethora of emerging and existing technology tools for employees to empower real-time knowledge and communication with full integration into ERP and CX tools.

what’s next for retail

The NRF announcements gave us a glimpse into the future of retail. Qualcomm, Adobe, Oracle and a bevy of other tech companies are creating new solutions that will transform how retailers reach consumers and how consumers shop. I also believe that these emerging technologies and changing priorities are the first dominoes to fall and will lead to other advancements. We’re seeing rapid innovation in this fast-paced environment and I don’t think it’s slowing down anytime soon.

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