A few weeks ago, I had the opportunity to attend the National Retail Federation (NRF) Big Show. It is always unforgettable to make the pilgrimage to New York City in January for this annual event. This year, not only was the show content relevant, exciting and thorough, but the weather was sunny and bright. It was truly the best Big Show I have ever attended.
After sitting in on sessions that showcased retail executive mindshare from the likes of Best Buy, Wal-Mart, Family Dollar, Urban Outfitters, QVC, Dunkin’ Brands, and HSN, I learned several things about what to expect in retail this year. And as the title reveals, retailers will be laser-focused on consumers.
Customer-centricity took center stage, with many companies highlighting how they are improving loyalty
programs, developing targeted marketing campaigns, determining how to interact with a buyer who is technology-savvy, has fingertip access to the opinions of hundreds of their peers, and has more clearly defined expectations than ever before. There were a few other recommendations that are worth highlighting:
- Brand differentiation will be critical. We will continue to see an increase in private label programs that target store loyalty due to label exclusivity.
- Operations will be more consumer-focused, including everything from store design and merchandising strategies to the education of the sales staff and arming them with portable technologies for category and product-specific promotion opportunities.
- Proactive retailing will increase. For brick-and-mortar retailers, foot traffic is king. Marketing campaigns via social media, email, and online and mobile channels will aim to bring customers in for the store experience and the all important upsell.
- Retailers will seek to be customer relationship agents, and not just salespeople. The goal is to achieve anytime/anywhere customer engagement. Personal interaction is key here, but even more so, strong data analytics and the ability to execute programs based on the results.
Beyond the shopper’s importance, there are certainly several areas of operational consideration that the industry is following this year. Following are some of these topics in brief:
- Sustainability is still very important. Wal-Mart determined that 92% of their carbon footprint is in their supply chain (meaning, not in their direct control). Expect that supply chain visibility solutions will continue to gain momentum this year as retailers and suppliers seek to find ways to collaborate to be planet-friendly.
- RFID continues to gain momentum. The main point I heard related to RFID is that companies cannot look at it as incremental to GS1-128 barcode technology. It needs to be viewed across the entire value chain – what it means to the customer and work backwards from that point. American Apparel has a great success story in improving inventory positions and streamlining operations through an aggressive RFID implementation.
- Operators need to find ways to break through an incredibly promotional marketplace. LL Bean is doing this by implementing new metrics to track consumer behavior, as well as focusing on product & service. They believe that the consumer perception of value is shifting away from just the concept of “on sale”, and they are poised to take advantage of new customer expectations.
- Supply chain initiatives continue to be critical. Because the majority of cost in retail is tied up in the supply chain, there will always be a need to streamline and seek efficiencies anywhere and everywhere they can be gained. Charming Shoppes, like other large retailers, is optimizing their distribution network, seeking improved visibility, and moving to reduce cycle times with better utilization of data assets and greater inventory control.
- And last but not least, regulatory compliance isn’t going away. There are now more government programs that require the industry to be educated, vigilant, and fully staffed to comply. These range from customs/import requirements such as C-TPAT (anti-terrorism) and ISF 10+2 (more information about the source of import shipments) to CPSIA (consumer products safety), traceability requirements, and even state and local requirements, with California often leading the way in terms of having complex and new requirements always in the pipeline. This topic ties back to supply chain and trading partner communication, as well. Because everyone involved in the design, manufacturing, shipment and distribution of retail goods needs to be able to share information and become accountable for their part in ensuring safe products are delivered to consumers.
Attendance at this year’s show was through the roof of the Jacob K. Javits Convention Center. I haven’t seen an official tally, but I did hear some NRF staff members state that they believed records were broken. The international contingent was well represented, especially from Brazil. I look forward to their 100th anniversary celebration next year – an opportunity to see what we’ve achieved, and what to expect for the next hundred years!