NRF 2018: A View on What’s to Come This Year
After speaking with a variety of retailers at NRF Big Show 2018 and attending some of the sessions, what was evident is that retailers put off capital investment in 2017, choosing instead to focus on continued efforts to reduce costs and consolidate operations. However, 2018 is anticipated to be a year when retailers will begin formalizing longer-term plans and investing back into their company’s technical and analytical capabilities. The focus will be on bolstering capabilities that help them win in this highly competitive world.
Here are five takeaways from the event in terms of investment trends retailers will make in 2018 as they focus on competitive advantage and future growth:
- Personalization Matures: Personalization is going to evolve from a simplistic stream of email promotions or product recommendations based on your and other shoppers’ buying habits to a less cluttered and more refined approach. It will start to span channels and make use of new data sources such as geo-location to inform recommendations made.
- Use of Geo-Location Services Grows: Many NRF vendors talked about using location services to understand where a customer is in a shopping center or within a store so that push notifications can be sent to mobile devices. Retailers are certainly experimenting with this technology, and the personalization potential is huge (as alluded to above). Imagine being able to tell a customer they are 20 feet from the dress they browsed online last week, and offering them a 10 percent discount in-store today.
- Pricing Shines Bright: It’s critical to capitalize on omnichannel for a variety of reasons, including the emergence of new and exciting pricing capabilities. The design, cost and viability of electronic store labeling (ESL) solutions are looking more attractive all the time, and there were some great examples at NRF. ESL can, of course, remove one of the greatest headaches of running a retail store, and promises to cut costs, but it won’t be long before retailers use this technology to actively market to consumers, changing pricing and promotions to reflect a competitor offer, locality of a user, or other insights gained from across their omnichannel infrastructure — in real time.
- Customer Experience is Key: Retailers have focused so much time on their online user experience that wider customer experience has taken a back seat. Retailers that can get on top of their whole customer experience, making it something special rather than just another commodity, will win out. Price is fast losing its attraction as a differentiator; great customer experience speaks volumes.
- AI Gains Traction: Gleaning insights from data has always been a key goal for retailers to learn about customers and try to improve the services and products offered, as well as improve overall customer experience. The amount of accessible data, though, is becoming immense, and almost impossible for a team of humans to meaningfully manage. Enter artificial intelligence (AI) and machine learning. These technologies can find patterns in data much faster than any human, and in 2018 we will see more retailers using these technologies to enable category managers and marketers to focus on making decisions from the patterns presented to them, rather than spending weeks hunting for them. This will mean much quicker and better-informed decisions, as well as empowering the use of tools such as prescriptive analytics.
It’s unclear at this point how far retailers will get with some of these over 2018, but we're already seeing signs that there will be some really exciting things to emerge from the retail space this year. It will be key for retailers to keep in mind not to get so immersed in technology projects that they take their eyes off the ball. Ultimately, the big winners are always those focused on doing the basics better, faster, smarter and cheaper.
Channie Mize is general manager for retail at Periscope By McKinsey, a suite of marketing and sales solutions.