The Future of Retail @NRF

The Future of Retail @NRF

January 22, 2020
Phil Lempert
Retail Industry InsightsTrends

By RDBA CEO Phil Lempert

The National Retail Federation’s Big Show filled New York City’s Javits Center with
drones, robots, self-checkout, touch screens, mirrors that let you try on clothes
(without trying on clothes) and countless technologies all designed to move the
retail environment to the future. In mid-January, nearly 40,000 people gathered to
search for the silver bullets that could fix declining sales, lost customer traffic and
equip them for the battle against online shopping. I found few silver bullets.

NRF’s Big Show is designed for all retailers; and to be honest, while there were a few
grocery-based solutions most of the presentations and exhibitors were focused on
hard goods and not food, which was disappointing.

The buzz, both on stage and in the aisles that sprawled over 275,000 square feet,
was focused on efficiencies. In-store, at the checkout and for delivery. I counted no
less than a dozen exhibitors that were promoting active (drones) or passive (robotic
cameras that line a shelf in a rail that is practically invisible to the shopper) out-of-
stock solutions. In fact, out-of-stocks was in the top ten discussions throughout the
Big Show. There were a few exhibitors who offered a better solution to the out-of-
stock problem: creating on-demand personalized products that could be made in-
store or elsewhere and then have the product shipped to the customer. An example
that I often use to illustrate how grocery could benefit is in the bakery department.
Why display 50 or more cakes hoping that a shopper finds one they like? Why not
have a bank of 3D printers where shoppers could customize their cake – the
ingredients, colors, size and decorations – and avoid the waste?

I was disappointed to find that most of the discussions and solutions were designed
to help the shopper once they were in-store or online rather than helping the
shopper discover new products or product attributes. Chris Baldwin, CEO of BJ’s
Wholesale Club (and a former ConAgra Foods exec) who is the current NRF
Chairman, said in his opening remarks “Moving forward, consumers will expect
even more. This is just the beginning of a revolution to give customers more.”
Baldwin added that 83% of consumers say that convenience is more important to
them now than it was five years ago.

In another presentation, Coresight Research CEO Deborah Weinswig urged the
audience to look to China as a forewarning to the US shopper changes. She shared
how in the US, Gen Z shoppers shop predominately at discount stores, but in China
that cohort is driving spending and is more informed. The average consumer in
China, she said, needs twelve touch points to convert to purchase, while the average
US shopper needs only four.

Seth Goldman, founder and ex-CEO of Honest Tea (now a Coca-Cola company) and
currently Executive Chair of Beyond Meat shared the strategy for the global
expansion of the plant-based protein company. Here in the US they use pea protein
but as they expand beyond our shores, they will use whatever plant-based protein is
prevalent (and available) in markets around the globe; lentils, hemp, quinoa, or tofu
to name a few.

In grocery, I found a few solutions that are being tested and will most likely see full-
scale adoption. Smart shelves (being tested in Walmart, ShopRite and Stop & Shop)
uses real-time data to promote discounts on products nearing expiration dates or to
induce greater impulse shopping at a particular time of the day. Smart shopping
carts that automatically scanned products as they were added to the shopping cart,
and then completes the check out process as a customer leaves the store. A clunkier
Amazon Go type of solution that doesn’t require the expensive and enormous
technological infrastructure that Amazon Go requires; which is probably less scarier
to the average shopper and offers a more convenient scan & go solution than
attempting to use one’s mobile device. Caper and WalkOut both offer these smart
carts that also includes advertising or product recommendations on the screen
attached to the cart, which is triggered by what products, you select.

The most compelling story shared on stage was that from Nordstrom’s CO-President
Erick Nordstrom, who was describing how their newly opened store in New York
City offers many more in-store experiences than in their other stores. One of their
not so secret weapons in the store’s success has been transforming the atmosphere
of the store – through more food and beverage offerings. One example he shared
was that in the main shoe department where there is a bar affording customers the
opportunity to drink as they shop. He said that stores need to be more experiential
and cannot be just about the convenience of picking something up.

Perhaps with all the chatter at NRF about “better, cheaper, faster” Nordstrom’s
lesson is one which retailers of all types, including grocers, need to embrace.