NRF - Retail's Big Show is the world's largest retail conference, a three day event in New York covering business transformation, the latest innovations, sustainability and diversity. What's notable is the continued relevancy of this conference within retail that brings people, companies and brands from all over the world together to discuss the industry. This year deep-dived into how leading brands and disruptors are redefining retail and there was frequent mention of a new acronym - WACD: "What Amazon Can't Do".
Which topics dominated NRF this year? What was the general outlook? Here is my first-hand perspective from NRF 2019.
One of the biggest topics in retail today reflected at NRF is the evolving role of the store. Previously considered as a piece of real estate, stores are now becoming arenas of 'retailtainment'.
Despite the rapid growth of e-commerce, consumers still enjoy brick-and-mortar stores: 68% of people reference the ability to touch and feel the merchandise, and 61% reference the option to get the merchandise immediately. But an astounding 78% of millennials prefer to spend their money on a stand-out experience over product (Salesforce 2017 Connected Shopper Report).
E-tailers have been investing in physical spaces, while traditional retailers are re-inventing their stores around experience. NRF showcased a few notable examples:
Overall, customers today expect retailers to deliver fresh experiences - whether that be with new technology in-store, through enhanced service or different ways in which to order and return products. Those that master the customer experience will be the winners despite tough trading conditions.
It's a well known formula that low friction and high reward is the key to a successful customer experience. As part of this, removing all friction from a cumbersome process becomes the reward for customers.
Once again, NRF showcased a few top examples where retailers are cutting friction to delight customers:
Experience is important, but becoming frictionless is key. A great starting point for this would be to identify pain points by speaking to your disloyal customers. In fact, it looks like this exercise should be done earlier than later now that we are seeing China ramp up its development on cashless payment methods and closer to home, Amazon soon introducing zero-click checkout.
Speaking of Amazon...
“The A-effect” refers to Amazon and Alibaba - two industry giants shaking up the retail industry. Amazon needs no explanation, but the other 'A' brand that should not be neglected is Chinese e-commerce giant Alibaba, who have built their own impressive digital shopping ecosystem.
These two brands are changing the face of retail as we know it. Retailers can either work with them or against them. NRF touched on 4 common strategies in the market to respond to “the A-effect”:
Regardless of which tactic is adopted, what's clear is retailers need to take action and blur the old barriers of competition to address new threats in their market.
Doing good in a number of ways is becoming more and more important to consumers. Ignoring this, or paying lip service, will no longer cut it. Consumers are increasingly demanding responsible business and responsible brands. They want to feel part of a community and are looking to engage with authentic brands that relate to their core values.
For this reason, purpose was a big topic at NRF, with multiple CEO's addressing the topic and seeing this as a clear differentiator to their brands because "Amazon is not the place to create deep connections".
One such purpose-driven brand is Everlane, a retailer that practices Radical Transparency by giving consumers the insight into their supply chain and the full cost breakdown behind products - so that you know exactly how costs have come together to put a price on a tag, and what processes were undertaken to put a t-shirt on a hanger.
This is being recognised as a powerful brand differentiator, and translates into real ROI.
The reimagined storefront, striving for a frictionless shopping journey, adapting to new competitive pressures, and a keen focus on brand purpose - These four big themes of NRF demonstrate the changing state of retail worldwide and what we can expect to see more of this year.
What's clear from all this is that retail brands will need to get creative and take more calculated risks to stand out against the heightened competitive backdrop. Retailers can no longer stay comfortable in how they have traditionally found success, but must push themselves to innovate at the pace of the customer and a market that's moving faster than ever before.
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