This year's NRF "Retail's Big Show" in New York City was their biggest show to date with over 40,000 attendees, 18,000 retailers and 800 exhibitors from 99 countries. The buzz at this year's show included remaking the physical store into a discovery destination, embracing sustainability practices and products and using retail technology to enhance the customer experience.
Microsoft CEO, Satya Nadella, kicked off the show with an inspiring keynote address. He said, “the goal of the 2020s is for every retailer to develop their own tech intensity. That doesn’t mean reinventing the wheel, but it does mean building the digital capabilities of your organization.” Satya encouraged companies to leverage tech partnerships and spend resources developing their own systems and programs to bolster organizational performance.
Future of Physical Retail
Helping shoppers “discover” experiences in a retail space was an important theme. Winston Fisher, AREA15 CEO stated, “The purpose of a physical retail space is to move the consumer from transactional shopping to discovery shopping.” In addition, VF Corporation’s (i.e. Vans shoes) VP Digital Technology, Matt Weber, said their store strategy is to drive the fear of missing out (FOMO) with their consumers. He added, “retailers have to do everything to make consumers want to come into the store when they no longer have to.”
Kohl’s CEO, Michelle Gass, provided her perspective on store strategy and the future of physical retail. She said, “we are living at a time where we really have to think differently about the store experience. We have to think creatively about partners and leverage partners with complimentary strengths.”
Kohl’s implemented Amazon Returns into their store model, which allows Amazon customers to return items to their stores, with Kohl’s handling the entire process. Amazon benefits from our brick and mortar footprint and frictionless return process for their consumers, and Kohl’s benefits from increased store traffic.”
Focus on Sustainability and Impact
Sustainability is important to consumers and the retail industry and this concern was on display this year at NRF. Despite this focus, recent statistics reveal the consumers want more emphasis from retailers and consumer brands. Freya Williams, CEO of Futerra, cited that only 40% of consumers think companies are providing enough transparency regarding their sustainability efforts and metrics. Gen Z (also called “the Honest Generation”) place more importance on honesty, transparency and sustainability than Millennials do.
Sarah Wallis, VP & GM of eCommerce at Athleta said, “Sustainability starts at the level of the culture of the company.” She noted Athleta is rolling out new mannequins to their stores that are inclusive, with sizing and facial expressions that represent many ethnicities. Wallis stated that these mannequins are manufactured from recycled material and easily recyclable.
Director of Impact and Brand at Cotopaxi, Annie Agle, stated that in addition to consumer concerns, “employees are also asking questions about sustainability and companies must take their environmental impact seriously, or they will lose out on talent.”
Agle discussed Cotopaxi’s model and explained how they buy clothing scraps from other outdoor companies to produce 70% of Cotopaxi’s products. She said this model allows many of their items to be carbon-negative.
Monica Turner, SVP of Sales at P&G, promised that 100% of P&G’s packaging will be recyclable or reusable by 2030 saying, “Consumers are voting more than ever to brands that are sustainable and low-impact.” Terracycle CEO, Tom Szaky stated: “Our hate should not [necessarily] be directed towards plastic. Our hate should be directed towards using packaging once.”
Importance of Experiential Retail
Many companies demonstrated how they plan to provide valuable consumer experiences.
Winston Fisher, AREA15 CEO said, “we have lived in a utilitarian world and tangible experience is next.” When asked what role technology plays in providing great experiences to consumers, Fisher said, “technology must always be going on in the background as an enabler for a great experience.” He added, “technology is the ‘magic’ behind-the-scenes that allows companies to create truly amazing and innovative experiences for consumers.”
Fisher used “Amazon Go” as an example of this. He said no one really knows how exactly Amazon facilitates the “leave-the-store-without-paying” model, but the technology in the background enables that “magic-like” experience for shoppers.
Andrea Albicocco, Senior Manager for Brand Experience and Events at Total Wine and More said, “64% of consumers are interested in events in-store.” Total Wine and More place classrooms inside their stores and have witnessed great increases in branded supplier tastings, consumer classes and events like hosting book clubs. Albicocco added, “When consumers walk down our aisles, we want to transport them to Tuscany and help them find the wine they might be looking for; but also, Tuscan ceramics and olive oil.”
As 2020 progresses, retailers and brands will continue finding new ways to build on existing business models, while catering to consumer preferences for sustainable practices, fluid digital and in-store experiences, alongside immersive marketing strategies. Investments in technology will ensure a new decade’s worth of innovative retail and collaboration.
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