NRF 2020: What the Future of Retail Looks Like
The human element will only become more critical in the 2020s
NEW YORK — What does the future of retail look like?
At the National Retail Federation conference, just about everyone had a different idea for what that meant. Technology is changing retail, and every technology vendor offered a solution that could solve specific challenges.
However, no matter how high the retail tech stack gets, the message at NRF was clear: The future of retail is about driving back to the human element and empowering customers to make better, faster and more personalized shopping decisions.
As Piers Fawkes, editor-in-chief of PSFK, emphasized in one session at NRF, retail in the 2020s will be defined by personal utility. Customers will expect retailers to inspire them, value their business and understand their needs on an intimate basis.
What does this mean for retailers? Here are a few trends to note:
AI is here – this is what you need to know
Artificial intelligence (AI) is impacting retail today, and shops will fall behind if they wait any longer to adopt it.
But what do you need to get your AI algorithm up and running, and pumping out helpful insights to better target and serve your customers? High-quality data, and lots of it.
“It’s about having enough data, and having high-quality data,” Hardeep Kharaud, senior vice president of supply chain at Loblaw, said at NRF. “You need high-quality data.”
What is high-quality data? It’s data drawn from a globally diverse source that can help you make better decisions, not biased decisions. This AI bias comes into effect when your data does not adequately represent your customer base – the AI will produce outputs that can actually make your decisions, products and marketing campaigns less effective with your customers.
As Lars Gunnarsson, IKEA’s deputy managing director and digital transformation leader, said bluntly, “If you don’t have the data, [AI] won’t work.”
It’s about having enough data, and having high-quality data. You need high-quality data.
Reliability is more important than speed
Next-day (or even same-day) delivery is appealing to any customer, but for most retailers, that’s just simply not a reality. What is more realistic is providing accurate and reliable updates on your shipments so that customers know precisely when their package will arrive.
“What you want to do with e-commerce orders is you want to be very clear about when something will arrive,” said Danny Catullo, COO of Catullo Meats.
Businesses need to align their supply chain with their customer-facing technologies to ensure customers get what they want when they’re supposed to, and provide clear updates to customers when something will arrive late. While many stores highlight developments such as shipped from store, the customer often doesn’t care where the package originated – only that it arrives on time.
“Customers don’t care if the package is coming from a store or not,” said Jonathan Aitken, digital market development director at Avery Dennison. “They just want to get everything in as minimal packages as possible and know exactly when the package will be available for them.”
Prioritize the human element
Human beings should be at the forefront of every decision you make.
That was the message from Olivier Blayac, senior vice president of business development at L’Oreal, at NRF. Blayac explained there are multiple benefits when L’Oreal prioritizes the human element in its business decision-making:
- Realistic outcomes
- Reassurance from customers
- Superior service
While the 2020s will offer plenty of technology to improve the customer experience, keeping the human element first and foremost is something that should never change.