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Event Coverage 5 minutes

NRF 2020 Day 1 Insights: The Digital Economy Is Here

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Coresight Research

Key Points

The National Retail Federation (NRF) kicked off its Retail’s Big Show in New York City on Sunday, January 12. The Coresight Research team was on hand to learn more about the latest trends shaping retail.

These are our key insights from the first day of the event:

  • Retailers need to increase technology intensity, which means greater technology adoption and expanded capability.
  • Companies need to invest in employees and employee communications to better understand the challenges they face and implement policies to drive employee engagement and productivity.
  • Around 9% of purchases are made on merged digital destinations: Brands and retailers need to be everywhere, relevant and delightful.

To see more from NRF 2020, read our coverage of day 2 and day 3.

Convenience Is Everything to Today’s Consumer

Today’s consumers have more options and greater power today than ever before, according to Chris Baldwin, Chairman and CEO at BJ’s Wholesale Club, adding that 83% of consumers say convenience is more important to them now than it was five years ago.

Digital Economy Is Here

Microsoft CEO Satya Nadella believes that digital is already embedded in the economy, outlining that 92 top retailers use Microsoft cloud technology and that some 31% of the world’s GDP is driven by retail. To enable intelligent retail, companies need to embrace four key pillars: know your customers, empower your employees, create an intelligent supply chain and reimagine retail.

Every retailer needs to increase technology intensity, meaning greater technology adoption and increased capability. Nadella pointed out that 30% of online sales are driven by recommendations and that 80% of consumers are more likely to purchase based on personalized recommendations. Now, 75% of shopping begins online and customer lifetime value has increased 60%. Retailers need to leverage commercial intent and consumer data to optimize digital marketing strategies. Employee engagement is also key: Empowering employees can lead to a 15% increase in conversion rates and a 10% increase in customer satisfaction.

Retail Jobs Are Changing

Zeynep Ton, Professor of the Practice at the MIT Sloan School of Management, discussed key retail topics with Walmart US CEO John Furner, including digital capabilities and employee engagement. Furner outlined some of the steps Walmart is taking to increase employee engagement, such as introducing new technology for scheduling. Management needs to ensure robust employee communications channels to truly gain insights into what motivates their teams—and what challenges they face in delivering an excellent customer experience. He pointed out that although machines may actually replace some jobs, positions in different functions—such as analytics and more experience-related roles—will be added in the future.

Zeynep Ton (left), Professor of the Practice at the MIT Sloan School of Management, speaks with Walmart US CEO John Furner (right).
Source: Coresight Research

 

Data Is Enabling Retailers To Plan Space

Walgreens Boots Alliance has worked with Microsoft since January 2019 to transform healthcare delivery. Tracy Allen, Senior Director of Space Management at Walgreens, explained that the company is now progressing this partnership to leverage large volumes of data to optimize in-store space. For example, Walgreens is using technology to conduct footfall tracking via carts and baskets to better understand the consumer journey—learning how customers are navigating stores and using that information to optimize the shopping experience.

Localization is also becoming increasingly important for retailers to ensure the product mix maps to local market characteristics—and Allen believes that automation is the key, leveraging data analytics and programming to deliver the insights that retailers need to more effectively localize offerings.

Everything Is Connected

Rob Garf, Vice President of Industry Strategy and Insights at Salesforce, emphasized that everything is connected today: Some 9% of purchases are made on merging digital destinations, and IT drives an average of 39 front-end systems. To unbox the consumer experience today, brands and retailers need to be everywhere, relevant and delightful. Simply bringing consumers into the physical store is no longer enough.

Tractor Supply’s Omni Channel Strategy Focuses on Customers

Letitia Webster, Senior Vice President of eCommerce, Omni Channel & Master Data Management at Tractor Supply, outlined how the company uses a test-and-learn strategy to improve customer service and the shopping experience. For example, the company is testing an open shelf with laser lights and no security locks for buy-online-pick-up-in-store orders.

Tractor Supply runs experiments with real customers in store and then adapts its practices to alleviate shopping pain points. Webster also highlighted the importance of content management—for example, saving content in a single location for easy search and reuse—and curating the information depending on how consumers react.

New Technologies Enable Digital Retailing

Tom Hutchins, Vice President of Technology and Strategy at Tractor Supply, outlined how the company empowers team members with mobile technology to improve the in-store customer experience—although it sought to leverage existing technology to the greatest extent possible before investing in next-generation technology. Tractor Supply is also working with universities to test automation.

Dave Lammers, Vice President of Retail Technology at Dick’s Sporting Goods, outlined how the company uses machine learning to identify patterns and make estimated delivery dates more accurate.

From left to right: Kyle Dufresne, President and GM of Global Client and Compute Solutions and Global Compute and Networking at Dell Technologies; Tom Hutchins, VP of Technology and Strategy at Tractor Supply; Veeral Shah, Retail Technology Strategist at AT&T; Dave Lammers, VP of Retail Technology at DICK’S Sporting Goods
Source: Coresight Research

 

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