NRF in an Hour
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Our Retail experts recently attended the National Retail Federation Big Show and developed “NRF in an Hour,” which provides an over of the conference from the North Highland perspective. The key themes of the 2017 NRF conference included technology/innovation, customer experience, investing in people, and data and analytics. In “NRF in an Hour,” our consultants share their insight on each theme presented, explain critical learnings retailers should be focused on, and provide actionable advice that organizations can start today.
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NRF in an Hour
- 1. NRF IN AN HOUR National Retail Federation Big Show January 15-17, 2017 New York City
- 2. 2 Proprietary & Confidential NATIONAL RETAIL FEDERATION BIG SHOW January 15 – 17, 2017 — New York City 35K 510+ 300+ Attendees from around the world Exhibitors at the EXPO Speakers conducting over 100 sessions 200k Square feet of exhibitor space
- 3. 3 Proprietary & Confidential INTERESTING THOUGHTS 2% Growth any share that is being taken by a retailer is coming from another retailer $1.8T of sales is influenced by digital 2016 Holiday Traffic down 7% Customer service expectations are being set by digital, not by the store Product is making a comeback as a key shopping differentiator Stores remain the king of transactions – online is still more about inspiration WINNERS ARE: • Integrating experiences – no online/offline thinking • Leveraging customer data in meaningful ways • Creating compelling reasons to return to the store via product
- 4. 4 Proprietary & Confidential THEMES OF NRF 2017 Technology / Innovation Investing in People Customer Experience Data and Analytics TECHNOLOGY / INNOVATION Augmented Reality, Robotics, On-Demand Manufacturing, and many other technologies will shape the near future of Retail. CUSTOMER EXPERIENCE Whether it’s honing in on what your customer really wants, adapting to changing customer priorities or creating an unforgettable, personalized experience, the customer will rule in the future. INVESTING IN PEOPLE Building great brands begins with hiring great people who are invested with you. Equipping new retailers with the right skills to succeed will raise the bar for all brands and improve the shopping experience for the customer. DATA AND ANALYTICS Data is everywhere in retail. Finding it, connecting it, and understanding it is key to differentiation both in the online and offline space.
- 5. 5 Proprietary & Confidential WHAT ARE YOU MOST INTERESTED IN? VALUE TO MY COMPANY DESIRETOEXPLORE
- 6. 6 Proprietary & Confidential TECHNOLOGY AND INNOVATION Driving mobile sales and supporting efficient pick/pack ship using augmented reality and glass technology Augmented Reality Virtual Reality Artificial Intelligence / Machine Learning Robotics From Virtual Stores to Store Planning, VR is coming into it own as a tool for retailers to drive efficiencies AI and ML will help with new product testing along with enabling real-time out-of- stock tracking, point of sale targeted digital advertising, and automated check-out From Greeters to Inventory Management to Pick/Pack, robotics will be a major trend in the coming years to reduce cost and improve the customer experience Augment Claire Focal Systems Pepper Tally Intel ShopperMX Alibaba Virtual StoreRecon Jet Pro Right hand Robotics
- 7. 7 Proprietary & Confidential CUSTOMER EXPERIENCE • Communicate like a friend rather than a brand • Mass customization • On Demand Manufacturing Customization Compelling in-store experience Catering to digital natives / Gen Z • Store as a destination • Bonfire effect - Communal Brands • Younger consumers are more open to change
- 8. 8 Proprietary & Confidential What does it mean for me? • There are many ways to enable some level of customization. • More and more customers are going to be looking for ways to make products unique CUSTOMIZATION Customers are looking to express their individuality and customization allows them to create a product that is uniquely their own How to enable? • Mass customization • On-demand manufacturing • Tailoring communications • Leveraging data
- 9. 9 Proprietary & Confidential What does it mean for me? • Make your store a destination • Be human • Build experiences that align with your brand • Focus on authenticity • Create a bonfire experience o Solutions o Meaning o Experience IN-STORE EXPERIENCE Store as a destination • Give your customers a reason to shop in stores. As customers are more comfortable shopping online, they need more compelling reasons to visit stores • Create surprise and delight • Bonfire effect Bonfire Effect Kellogg’s & Sonos Samsung
- 10. 10 Proprietary & Confidential What does it mean for me? • Test new technology • Find ways to enable responsiveness • Focus on service CATERING TO THE DIGITAL NATIVES / GEN Z • Still want to shop in-stores • Open to change, more likely adopt technology • NOW! • Crave simplicity • High expectations for service • Frustrated with Digital immigrants • Younger generations want brands that reflect values and “stand for something” Who are digital natives Gen Z? <30 year olds, born into a digital world
- 11. 11 Proprietary & Confidential INVESTING IN PEOPLE • Rise Up Initiative Training, development, credentialing program. Starting with Retail Industry Fundamentals, planning to expand to additional levels • Changing jobs o Data / Analytics at Macy’s o Social Influencers Investing in People Richard Branson: Retailers need to start thinking like Entrepreneurs • Praise often • Look for good • Don’t overcorrect, give leeway to make mistakes • Be a good listener • Take action on items/issues quickly • Be attentive to small details
- 12. 12 Proprietary & Confidential Sponsor Sampling (Not exhaustive) • Macy’s • Neiman Marcus • Target • Walmart • Disney • HSN • Under Armour • Wendy’s • Vera Bradley • William Sonoma • Ashley Stewart • Brooks Brothers • Disney • Home Depot • Container Store • Kroger • LL Bean • Lowes RISE UP PROGRAM • NRF, with the support of major national retailers, founded a program for specialized education and credentialing • Demonstrates the value of retail careers and gives participants an advantage in landing jobs • Assistance to the retail industry in overcoming skills gaps, keeping up with advancing technology and attracting and promoting talent The future isn’t WHAT it’s WHO LINK
- 13. 13 Proprietary & Confidential DATA AND ANALYTICS Retail in the 21st Century means that the retailer anticipates the need of the customer before they need it. Data is critical to understanding the customer and driving a seamless experience To influence and enhance the customer experience To improve operations and assortment To serve up the best marketing to the right customers Having the right product, well stocked in the right store is still the key to the success of a brick-and mortar retailer. Solid data and advanced analytics can be a key differentiator to ensuring product availability and drive new product placement. Technology is more prevalent than ever in influencing purchases of the consumer. Retailers must utilize the data available to them to drive new and interesting messages to consumers that are personalized and compelling Data is the New Oil – Information abounds but the trick is determining how to best use it to drive sales. Three ways that data will be used in the near future are:
- 14. 14 Proprietary & Confidential • Understand the data and using the knowledge to communicate to the customers • Know the customer well enough to offer targeted offers • Utilize data and insights to target future investments • Listening to the customers data can drive retailer into new businesses DATA DRIVES THE CUSTOMER EXPERIENCE • Data is being shared at every moment of the retail experience • Most customers have used data before they enter the store • Retail environments produce massive amounts of data • Things and Devises capture the data – they are connected now – and the power of the data is unleashed • Data can be collected and analytics can be applied – AI and Machine Learning • The data can be driven into insights and interpretations that drive predictions – almost any behavior can be predicted with the right amount of data Example: Game Stop
- 15. 15 Proprietary & Confidential • Understand the data and using the knowledge to communicate to the customers • Know the customer well enough to offer targeted offers • Utilize data and insights to target future investments • Listening to the customers data can drive retailer into new businesses LEVERAGE DATA FOR OPERATIONAL AND MERCHANDISING OPPORTUNITIES • Leverage POS Data to understand trends • Look for anomalies in the data that point to opportunities for Operational improvements • Look for patterns in the data that point to Merchandising opportunities POS Data Utilization • Gather Inventory and Sales data utilizing technology to understand true state of inventory in the stores • Leverage AI and complex algorithms to predict need and sales • Provide real-time actionable data to Supply Chain and Operations for changes to the store environment Sales and Inventory Data
- 16. 16 Proprietary & Confidential • Identity is the core of Personalization – Retailers need to work to stitch together customer data, device data, and store data to fully understand the customer • Data is key to: o Observe – understand customer preference through online and in-store actions o Act – apply heuristics and algorithms to tease out opportunities to help the customer o Remember – make the experience constant, not separate interactions • Customer relevancy is key to personalization – use the data on hand about the customer to provide the right messaging to them based on where they are and what is going on now DRIVE THE RIGHT MARKETING MESSAGES • Personal algorithms are being used by consumers so we may be moving to selling to the algorithms rather than direct to the consumer • Moving from screens where we actively engage to make a purchase to sensors that know us and drive demand • Shifting from marketers in control because there is active involvement by the customer, to algorithms in control because the customer is passively involved Ads driven from actions Ads driven from better customer knowledge
- 17. 17 Proprietary & Confidential WHAT’S AHEAD FOR [INSERT CLIENT NAME] IN 2017? More focus on Customer Experience? Technology and Innovation?Provide customization options? Data / Insights? Talent Management Employee Experience update headers and images to strategies/priorities/nee
- 18. 18 Proprietary & Confidential BART DEFOOR Bart.DeFoor@northhighland.com (770) 883-4349 (c) FOR MORE INFORMATION For more information about this presentation or NRF 2017 please reach out to: ALISSA MOREIN Alissa.Morein@northhighland.com (772) 696-0003 (c) [INSERT LOCAL RESOURCE] XXXXXXXX@northhighland.com (123) 456-7890 (o) (123) 456-7890 (c) the dummy information for resou
- 19. 19 Proprietary & Confidential BART DEFOOR Bart.DeFoor@northhighland.com (770) 883-4349 (c) FOR MORE INFORMATION For more information about this presentation or NRF 2017 please reach out to: ALISSA MOREIN Alissa.Morein@northhighland.com (772) 696-0003 (c) version only JENNIFER MERRITT Jennifer.Merritt@northhighland.com (678) 488-2028 (c) TOM MURPHY Thomas.Murphy@northhighland.com (480) 323-5491 (c)
Editor's Notes
- Guidance for user:
- This deck is intended to be about 1 hour long. Depending on the discussion the content is set for closer to 1.2 to 1.5 hours. You may want to adjust the sections to those that are most interesting to the client to allow discussion. There are several videos in the deck. Slide 2 – NRF Recap – 2:10 Slide 6 – imbedded in the Tally photo - :42 Link to video if hyperlink doesn’t work: https://www.youtube.com/watch?v=BPZWlZ3BFBo
- 2% growth is in line with US GDP over the same timeframe 2016 traffic is foot traffic and not dotcom traffic $1.8T influenced by digital out of approx. $5T in total retail sales
- Speak to the alignment with NH offerings as discussing this slide
- This slide is a potential exercise to use when sharing with clients to help map priorities to inform where to focus TOPICS: Technology / Innovation Augmented Reality Virtual Reality AI / Machine Learning Robotics Customer Experience Customization In-store Experience Catering to Digital Natives / Gen Z Investing in people Rise Up Data and Analytics To enhance the customer experience To improve operations and assortment To improve marketing
- Augment – Augment is an augmented reality content and distribution platform, connecting retailers and brands to display products in 3D augmented reality on e-commerce and mobile commerce channels. With Augment, shoppers can visualize any product in the real world environment in life-like augmented reality through a retailer's mobile app or site. Augment helps retailers and manufacturers leverage augmented reality to increase engagement, sell more products, and reduce returns. Recon Jet Pro – http://www.reconinstruments.com/enterprise/jet-pro/ - These hands-free glasses allow workers to identify and scan items merely by looking at them. Furthermore, the Jet Pro confirms that the right item is being placed into the right box or package, reducing error rates and ensuring customer receive exactly what they ordered. Technology like the Jet Pro drives efficiencies and savings in retail, helping traditional and modern commerce strategies to blend into one. Intel ShopperMX – https://www.incontextsolutions.com/press/nrf-big-show-2017-press-page - Virtual Reality Planogram system that allows the user to be immersed in the retail environment and see the POG as a shopper would. Product can be moved with the swipe of your hand, analytics can be added to the view with the click of a button. Alibaba Virtual Store – Alibaba setup a Virtual Store on 11/11 (Singles Day – you are encouraged to buy gifts for yourself) – and all the customer needed was a phone, a cardboard VR enhancer, and the app. Once inside Alibaba transported their shoppers to a store in Manhattan to allow them to virtually walk around, see product and by looking and selecting, buy the items they saw in the store. http://www.wsj.com/video/alibaba-offers-virtual-reality-shopping-on-singles-day/8D484747-9555-4AFA-810B-596E2D684587.html http://www.destinationcrm.com/Articles/CRM-News/CRM-Featured-News/NRFs-Big-Show-2017-Day-Two-Virtual-Reality-Is-Creating-New-Opportunities-for-Retail--115804.aspx Focal Systems – http://www.focal.systems/ - The Focal Tablet is a Deep Learning powered device that retrofits shopping cart handlebars, turning a normal shopping cart into a: - Customer Engagement Platform - Automated Self-Checkout device - Out-of-Stock detection tool - e-Circular / CPG Coupons. The Focal Tablet retrofits existing shopping carts. It help shoppers navigate the store, find deals, and discover featured products. Soon it will be able to be used as an automated checkout device, what we call: "Just throw it in the basket" Technology. On the back side, it uses patented Computer Vision algorithms to track where the shopping cart goes (with no iBeacons or additional hardware/sensors), detects Out-of-Stocks, reads Shelf Price Tags, tracks where products are (what we call the Focal Real-o-gram) and compares that to the planogram for planogram compliance, and much more. Claire – http://www.meetclaire.co/welcome/ - Claire is a testing platform for new products. We help retailers identify best sellers and worst performers early in the product development process, increasing sell-through and reducing markdowns. Brands and retailers like Target, Kohl’s, Rebecca Minkoff, and Rent the Runway work with Claire to predict user demand for new products. Claire is fast, scalable, accurate, and built by Physics PhDs using the latest in artificial intelligence. Pepper – Pepper is an autonomous talking humanoid robot who perceives emotions, and adapts his behavior to the mood of the humans around him. Pepper can identify joy, sadness, anger or surprise and respond appropriately, making his interactions with humans incredibly natural and intuitive. The Emotion Engine Humans are emotional beings. When we communicate with each other, we use dozens of emotional cues that provide meaning and context. At the heart of Pepper is a remarkable technology that analyses what you say, your tone of voice and nonverbal communication cues like the tilt of your head or posture. From these, Pepper can instantly recognize the emotional context of the conversation and adjust accordingly. http://www.newson6.com/story/34244167/softbank-robotics-america-to-showcase-the-future-of-engagement-in-retail-at-nrfs-big-show Tally – http://www.simberobotics.com/ - Simbe Robotics’ Tally is programmed to walk a store’s aisles and take stock levels at any time, then return to the charging station. The unit stops in front of each shelf and gets a high-resolution image of product labels, which are automatically checked against a map of the optimum layout for each section. The information is sent to store staffers who can restock and reorder goods. Tally can inventory an entire small store in about an hour, compared with about 25 hours per week that human employees need to track inventory, and as much as 200-300 hours per week in a large big-box store, according to Bogolea. Right Hand Robotics - https://www.righthandrobotics.com/ - RightHand Robotics (RHR) is a leader in providing end-to-end solutions that reduce the cost of e-commerce order-fulfillment of electronics, apparel, grocery, pharmaceuticals, and countless other industries. Unlike traditional factory robots that can be complex to setup and are singly purposed, RHR solutions are simple to integrate and adaptable to improve the utilization of many different customer workflows, such as sorting batch-picked items, picking items from an ASRS, inducting items to a belt sorter, and order quality assurance.
- Thursday’s Finest – on-demand knitting of ties, hats, scarves, and socks. Add customization and personalization all in Brooklyn Shoes of Prey - shoppers design their own shoes using digital tools that show how different materials, toe shapes, heels and other components can be combined to create a unique item Indochino - shoppers purchase custom suits by inputting their measurements and choosing styles and fabrics. The suits are delivered to customers’ doors in just a few weeks for a lower cost than a traditional custom suit Sonos store – lounges to show speakers Anthropologie – has an outdoor café. Nothing to do with their brand but want people to come to their store to hang out Soul cycle – cult-like following, created a lifestyle, bonfire effect (mini community with unspoken rules) Rebecca minkoff – smart mirrors, self check out Amazon go- self check out
- Customers want to express their individuality now more than ever. Younger generations don’t have the patience to wait and want things tailored for them Must get creative with on-demand manufacturing / customizing, leveraging data to know what customers want Don’t have to allow customers to personalize everything, but they want options
- 2 ways retailers our differentiating themselves on in-store experience 1 – bonfire effect Stores like soul cycle, lululemon, and Harley Davidson have created a lifestyle; made their stores a gathering place. 2- store as a destination Kellogg cereal bar – make interesting combinations with cereal, you get your food from a pantry cabinet with a number.. Like you’re grabbing a box of cereal in your home Samsung – Virtual reality lounge area, Sonos – mini living room noise lounges
- 98% still want to shop in a store Open to change, more likely adopt technology (e.g., retina or fingerprint scans, combined retailer pick-up areas in malls, self-serve lockers) NOW, short attention span – will get easily frustrated and switch to competitors if needs aren’t met promptly Crave simplicity – I don’t care how you do it, just want it done and easy for me High expectations for service Frustrated with Digital immigrants Younger generations want brands that reflect values and “stand for something” Participate in brand – snapchat filters Video of full presentation at https://youtu.be/9v7xYo0EKjw
- - NRF is building a program to address the talent gap in the retail industry. While there are thousands of open jobs, and hundreds of thousands of people unemployed, there is a clear gap in talent - Richard branson – focus on leadership and how to grow retail talent. One example he used was Example: small restaurants when owner is present generally are better than chain. So have to get all people to run like an owner– pride in ownership. Richard visits his companies, acts as a customer, and makes sure his people are empowered to act like owners. He trusts them, hires people who balance his strengths/weaknesses and allows them to do their job with accountability but without limiting fear of failure.
- Game stop – using data to drive new experiences - https://www.youtube.com/watch?v=dvkEHClpOUI 7000 stores North America, Europe, Australia 50 Million Loyalty Members across 13 countries Loyalty program – Example Australia 4Million Members = ~25% of population of Australia are members Through Big Data and analytics you can think globally but act locally Loyalty program allows GS to better understand the customer Utilize data they have on games and customers from loyalty program to make targeted offers of trade in Gathering data from customer surveys (over 1M surveys in last several years) to move them from Game and Electronics stores into the “loot” or licensed merchandise business – totally driven by customer demand and data from surveys The business is a $500M business growing to a $1B business Move to new business has diversified the shopper demographics Surveys told GS that customers want full stores that contain the merchandise, not just a small area of the normal GS stores Integrated Think Geek stores and opened Zing Pop Culture to meet the demand
- POS Data - http://c-b4.com/
- https://www.youtube.com/watch?v=K1CMi9i0d4w