The Need For Solid Multi-platform Experiences Took Center Stage at NRF Expo
Date: January 30, 2014
NRF 103rd Convention and Expo—the retail industry’s big show with over 520 exhibitors spread over 190,000 square feet at the Javits Convention Center in New York City on January 12–15—was attended by representatives from North America, Europe, Asia-Pacific, Latin America, and Africa. The show represents retailers, payments processors, technology solution providers, financial institutions, and other key providers who continue to drive change in the retailing experience in-store and digitally.
The first day’s theme was the technologically challenging exercise of developing omnichannel retail product and strategy to create a unique, feel good shopping experience for consumers with respect to marketing, loyalty, product information/reviews and payments. All of the retailers stressed that the multiplatform experience has to be solid to protect a company’s brand and generate goodwill.
A company’s digital strategy eventually has to match what is happening in-store from the time the customer enters up to checkout. A solid mobile checkout strategy is of paramount importance, and key areas of product development for many retailers in 2014 and 2015 will be apps ranging from basic product information to digital wallets.
In light of the recent data breach at Target, continued focus on data privacy and security will be a top priority for many retailers in 2014. Another is new technology solutions to create more personalized shopping experiences.
Developing systems with one view of the product, one view of the customer, a robust point of sale, online and in-store data management that supports better market segmentation and developing targeted marketing strategies through one data base were also key themes of the conference. The channels are being linked and integrated to create sophisticated inventory management solutions for these retailers. More personalized customer relationship management (CRM) can be attained by combining the retailer’s own database is with information from other databases. The key is to create relevant technology solutions for customers.
Retailers also talked about how they are leveraging technology in the stores and digitally that allows shoppers to scan product reviews instantly and get access to user-generated reviews, and generating yottabytes of data, which results in a richer understanding of their customers to improve marketing and retention strategies.
The conference began with a keynote address by Rick J. Caruso, founder & CEO of Caruso Affiliated, the largest privately held real estate development companies in the United States, titled Reimagining Main Street – How Brick and Mortar Retail Will Thrive in the 21st Century followed by a panel. Caruso said that to thrive in today’s marketplace, retailers need to promote the human experience of shopping while also developing digital strategies. Panelist Blake Nordstrom, CEO of Nordstrom, Inc., agreed with Caruso’s assessment in principle but pointed out that building the true omnichannel experience is capital intensive and neither a simple nor easy task technologically. Caruso said the traditional large mall will soon be dead though shoppers today still want to engage and feel a sense of community and have come to expect greater and more personalized service from their retailers. He argued that digital technology does not mean the death for brick and mortar but face-to-face interactions with brands, the social aspect of shopping, and the physical presence of retail goods will continue to fill basic human needs and drive consumers to brick-and-mortar establishments. As evidence he cited a recent study that 40% of Americans have expressed loneliness and crave more human interaction while at the same time conducting a great deal of business digitally.
The bottom line is that people’s desire for interaction and a sense of community will never disappear despite all the sophisticated technology solutions at their disposal. Social media is crucial to the success of the retailer be it large or small, allowing engagement with customers on multiple fronts and learning about them via sophisticated data management and analytical tools. The panel praised Starbucks for promoting the human experience while using sophisticated digital technology (from payments to loyalty) to constantly delight its customers. Blake Nordstrom mentioned that his store has about 4.5 million Pinterest followers.
The Role of Payments, Marketing and Technology in the Success of the Digital Economy: In a second panel, representatives from MasterCard, Saks Fifth Avenue, Bass Pro Shops, and Walgreens talked about the seamless shopping experience, providing clients information on product inventory, focus on deep personalization as a marketing strategy, mobile services, and the benefits of social media interactions. They discussed an open approach to mobile app development. Walgreens discussed its APIs tied to apps varying from photo apps to health care to payment apps designed to connect with and retain customers. They spoke of seeing a 40–50% increase in spend due to loyalty schemes. Providing information on in-store sales/promotions to their best customers has become very important part of loyalty. Free shipping is now very common. The retailers represented by the panel are also working with their card providers such as MasterCard to gain greater insights into consumer spend to support more targeted marketing offers, which help in retention. Cobranded cards are also valuable to retain the best customers, whether they are prepaid or credit. Saks Fifth Avenue said its cobrand card has been a big success, allowing greater engagement with customers and significantly increasing sales as a result. Walgreen’s Balance Rewards loyalty product has 90 million clients, of which 74 million are active on the program. All three retailers said they are working with MasterCard to further dissect payment information to differentiate their advertising and develop targeted marketing strategies. Walgreens is expanding its loyalty product to fulfill customers’ unmet financial needs for bill payment, money transfer services, etc. Bass Pro Shops discussed how PayPal has brought new clients to its stores and said it is experimenting with MasterCard PayPass as well. The retailers all said that they will adapt to EMV although they were skeptical that the deadlines would be met for full conversion due to the costs and complexity of implementation.
Global Retail Innovation Trends was the topic of a session in which speakers who are spearheading product innovation at firms based in Barcelona, Berlin, and New Delhi presented, as did speakers from Italian, French, and U.S. firms. Some interesting companies such as Quirky, Kase, Coop, and Warby Parker were highlighted. Innovation was characterized as really breakthrough reinvention and presenters warned that companies have to be responsive to change to survive in the 21st century or risk being quickly disintermediated by the competition.