Everything you need to know before retail's biggest annual event
As the retail industry convenes at NRF 2019 in New York City, it's again time to take stock of key industry trends and initiatives that will influence strategic decisions in the coming year.
Drawing from experience working with leading retailers worldwide, we've zeroed in on five trending topics attendees won't want to miss at the upcoming NRF 2019. Here's a quick introduction to prepare you for the Big Show.
Navigate Shifting Omnichannel Dynamics with Data Analytics
With omnichannel evolving beyond its inward-looking, operational roots, retailers will harness behavioral data insights to embrace a more customer-focused perspective on the shopper journey.
There is an expanding effort to understand how merchandising and operational decisions can reverberate across channels. How will a merchandising or price change in-store impact online sales? How should endless aisle assortments be presented in the physical environment? What new synergies may be identified between digital, mobile and physical touchpoints? What's the best way to assemble a more complete picture of shopper behaviors across these channels? How will closing or opening a store impact online sales?
Expect retailers to move toward presenting a more unified and consistent presence to shoppers across channels, powered by in-store and online advanced analytics.
Adopt New Tactics to Identify and Acquire High-Value Customers
The relentless pursuit of business growth is leading retailers to develop and test new approaches to customer acquisition, aimed at finding and attracting shopper segments with higher value potential, not just a history of recent purchases and shopping behavior.
Online retail startups have a history of spending heavily on customer acquisition, which can accelerate top-line growth and brand awareness but extend the path to profitability. Those introductory deals put pressure on established retailers, who must carefully plan campaigns to maximize ROI.
Tried and true customer lifetime value techniques based on proprietary shopper loyalty data now coexist alongside share-of-wallet approaches that peer outside a retailer's "four walls," both in-store and online, to assemble a richer picture of household spending. Folding in external data sources like anonymized and aggregated transaction data allows retailers to design differentiated programs for customer acquisition that focus marketing investments on higher-potential prospects.
Personalization Provides a Crucial Competitive Advantage
A Mastercard-sponsored report published by Harvard Business Review Analytic Services found that 90% of surveyed business executives believe that customers expect companies to anticipate and address their needs. The study also showed that 81% of respondents expect personalization will be a significant driving force of revenue by 2020.
Personalization impacts product, experience, assortment and price and meeting customer expectations in each area requires expertise in customer recognition and data analytics that crunch both internal and third-party insights, enabling retailers to better tailor their services to customers.
Retailers are also training store employees to be more data literate and are equipping them with tools like shopper history screens, in cases where the customer expects the retailer to know them well, to help them to improve customer service and personalize customer interactions.
Frictionless Retail Enters Retail Mainstream
Voice assistants, contactless mobile payments and in-store retail technology are only a few of the solutions that have been put in place to shave time and effort from the purchase process for customers. These are areas of intense experimentation as retailers work to meet shopper expectations for speed and ease-of-use that have been largely shaped by online and mobile experiences.
In the home, voice assistants are being trained to maintain shopping lists and re-order consumable products. New payment terminals have been widely deployed in retail stores as more consumers enable the compatible apps on their mobile phones.
Meanwhile, operators in Asia have taken the lead in cashier-less convenience stores that use in-store sensing and AI to meet customer needs, including BingoBox, which has more than 300 un-staffed retail units in 30 cities in China.
These and similar retail concepts rely on recognition of a shopper upon entering, shopping in and leaving the retail premise, yielding data streams that can be as richly detailed as those captured in online environments.
Gamification and Customer Engagement Reach the Next Level
Retailers are experimenting with gamification as a way to keep customers engaged and learning about the brand, unlocking new sources of information in the process. So far, this phenomenon is most prominent in Asia, but is likely to influence retailers worldwide.
Alibaba, the Chinese online retail giant, is using object and facial recognition, QR codes and shopper discount games to compete for attention and transactions in several test stores in Australia. Meanwhile, an array of luxury brands, including Dior and Hermès, have engaged millennials in China by using the popular WeChat mobile app platform to host games that enable consumers to earn small prizes for participating and choosing to share information.
By keeping these key areas in mind in the year ahead, brands will look to build their reputations, encourage communication between consumers and drive conversions — all while learning more about the people they serve.
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