NRF 2021, Chapter 1: Retail’s resilience and moving forward together
Tuesday, January 12th,
10:45 AM – 11:00 AM EST
Mike George, Board Chair of NRF, CEO of Qurate, a retail conglomerate comprising QVC, HSN, Zulily, Ballard Designs, Frontgate, Garnet Hill, and Grandin Road.
The board chair’s address at the NRF Big Show is normally heavy on the contribution of the retail industry to the economy, and society as well as the work NRF does to offer opportunities for people to get skilled up in the industry. This year’s address was no exception but there was also a much more overtly political tone than I have seen in previous years.
The speech opened with commentary on the recent attack on the Capitol and the governments inadequate response to the COVID pandemic. Being overtly political is normally a risk for a retailer but these are unusual times and the NRF have obviously calculated it’s a risk worth taking.
Mike went on to applaud the retail industry’s response to the pandemic and how it demonstrated Retail’s spirit of innovation and resiliency. Examples were given of innovation like Sam’s Club concierge app, a curbside pick-up service from Lowes and Gap’s opening of a fully automated distribution center which were all projects accelerated and deployed to assist in the pandemic response. Mike then went on to celebrate Qurate’s own work in supporting communities during the crisis.
The work of NRF was also celebrated. Mike particularly mentioned NRFs support for anti-racism initiatives and development of programs to help Retailers open safely in the pandemic.
He concluded with NRFs priorities for the year which are;
- Increase their advocacy on behalf of the Retail Industry
- Project a positive Retail story
- Drive the success of Retailers
Out of the three objectives come a number of advocacy initiatives
- Free Global Trade
- COVID relief packages for companies and individuals
- A bipartisan approach to infrastructure development
- Recognition of the critical role of the retail industry in the pandemic (frontline workers and supply chain)
The Uncommon Score: 10/10 (Must See). This really set the tone of retail as a community and highlighted the way NRF is focusing it’s support in 2021.
Economic outlook: Truths and consequences
Tuesday, January 12th
1:45 PM – 2:15 PM EST
Ira Kalish, Chief Global Economist, Deloitte
Janey Whiteside, Executive Vice President and Chief Customer Officer, Walmart
In this session Ira Kalish kicked off with an economic prediction for the year ahead. It was a gloomy assessment with most economies around the world expecting a COVID related recession. He talked of a “K” shaped recovery while people on middle and upper incomes are doing just fine put people on lower incomes are facing lots of challenges including higher infection rates, loss of income and loss of employment.
Janey Whiteside acknowledged that many of Walmart’s customers have been challenged during the pandemic. Walmart themselves have experienced big demand changes in waves from basic needs products to fitness related products to home improvement products and so on. What was consistent was a massive increase in demand for pick-up and delivery services (by which she meant what we would call Buy Online Pick up in Store (BOPIS)). There was a 300% increase in demand for this service. An interesting fact was that demand skewed strongly toward the 65+ segment many of whom had never ordered online before. She claimed that Walmart underwent 5 years of transformation in 5 weeks.
One of the things that helped Walmart in dealing with the pandemic was their digital platforms that for instance already know exactly where inventory is throughout the store and distribution network. The physical store network was also an advantage to Walmart because it allowed customers to get almost instant delivery rather than having to wait for delivery from a remote distribution center.
One of the lessons from the increased digital activity is how important it is to use data to know your customer. Customers expect that if they interact with you online, they will remember who you are and your preferences. They don’t appreciate being given suggestions to buy things that you should know have no relevance to them.
Knowing customers is based on collecting data and this can be a tricky area. Customers will only share with you if they trust you, so it is essential that trust is established if you expect to do well in the digital world. Janey said things are improving in this regard and used the analogy of ridesharing. Who would have thought that it would be acceptable for consumers to be picked up in a car, by an unlicensed driver you had never met 10 years ago? Now this is the Uber business model.
Ira asked if what we are experiencing is the new normal. Janey replied that people are re-assessing. Not everything about normal was good. Everything consumers have experienced during the pandemic was available before, but the pandemic has created the opportunity customers to re-assess what really represents value to them
The Uncommon Score: 8.5/10 (Must see) Really interesting conversation. Could have been improved with the opportunity for some audience Q+A.
Customer-driven commerce: How predictive, personalized digital fulfillment capabilities are transforming consumer experiences online and offline produced by Blue Yonder.
Tuesday, January 12th
12:00 PM – 12:30 PM EST
Wayne Usie, EVP, Market Development, Blue Yonder
Cheryl Williams CIO, Wakefern Food Corp
Hardeep Kharaud, SVP, Merchandising and Promotions, Loblaw Companies Limited
This session was about actual use cases of Artificial Intelligence/Machine Learning (AI/ML) in merchandise management in supermarkets. Wakefern is based in the North East of the USA, operates under several banners and claims to be the USA’s biggest co-op with turnover of US$18bn. Loblaw is Canadian based, and has C$24bn turnover.
Wakefern have been using AI/ML for replenishment for some time starting with hard goods and moving gradually into more perishable items. They have seen big benefits in wastage in the already implemented dairy category.
Loblaw sees the main benefits in AI/ML is in taking mundane tasks away from team members and allowing them to concentrate on more valuable activities. Both are experimenting with using AI/ML to determine pricing. The technology is allowing them to work out which items should be promoted and what are the optimum price points. It also is allowing them to price based on demand condition in specific stores. Both are also experimenting with using AI/ML to determine overall inventory levels (as opposed to simple replenishment).
The Q+A did not include the retailers but instead was conducted purely by Blue Yonder. Blue Yonder reports that the average impact of implementing AI/ML in forecasting is to reduce out of stocks from up to 7% to .5%.
A question was asked about how much data is too much. Blue Yonder recommend a layering approach like a cake. You need to collect the basics (sales results, seasonality, promo calendar etc.) but adding other data from social, and external sources like news and weather can enhance the picture.
An interesting observation was the speed AI/ML can add to decision making e.g., it predicted the extraordinary demand for paper products before humans had even noticed there was going to be a problem. Blue Yonder also commented on their platform strategy which is looking at applying AI/ML throughout the supply chain. This is a very interesting development which a lot of companies are looking at and approaching form many different angles. Managing inventory in the echelon will be the next step change
The Uncommon Score: 7/10 (Worth a look) Some good comments from the retailers but the session ended too quickly (20 minutes) and there was no opportunity to Q+A the operators. Still worth a look.
Reimagining the Customer Experience – The Reinvention Imperative.
Tuesday, January 12th
12:00 PM – 12:30 PM EST
Krista Bourne, SVP, Consumer Sales and Operations, Verizon
Fokke de Jong, CEO and Founder, Suitsupply
Andrea Weiss, CEO and Founder, The O Alliance
This session was billed to be a guide about recreating touchless customer experiences in a world where customers are hyper-worried about cleanliness in a COVID era. However, to my delight, it diverged quite a lot to become much more a debate about the existential crisis facing physical stores. This can be summed up by one of the answers the enigmatic and always energetic Fokke de Jong of Suitsupply gave at the end of the conversation. The task was say the first word that comes to your mind, our host Andrea said “contactless”, Fokke’s answer? “Contactmore”.
I’ll get back to the diversion soon, but it should be noted that Krista did a brilliant job highlighting all the ways that Verizon had moved quickly to allow customers to safely browse their stores, which were able to remain open during COVID as they were considered essential services. From accelerating curbside nationally years ahead of schedule, to contactless payments, even contactless ways to get your paperwork, the team have clearly done an awful lot of work accelerating their digital agenda in response to the pandemic.
Fokke talked much more about how Suitsupply, a rapidly growing clothing retailer, is adapting it’s personalised styling to be consistent in a world were customers were sometimes unable to make it to store. Even though demand for formal wear was down during COVID-19 (not many of us heading out to those big events anymore), but they are not letting anything get in the way of building their prized personal relationships. Implementing a consistent personal stylist option across channels, so no matter where the customer is shopping they are able to contact their own personal stylist, meant that they could stay connecting, continue to build an understanding of what that customer needs, and keeping the relationship strong. It is part of a strategy they “Radical Personalization”.
A clash of philosophies about contacless vs contactmore in a time of crisis, but both with some useful tips of where to focus your recovery energy. In our view, they don’t really need to live separately, but this conversation about the drive for radical personalization from Suitsupply vs Verizon’s focus on keeping everybody safe and offering the most frictionless and touchless experience they can, offers some helpful pointers.
The Uncommon Score: 7/10 (Worth a look) Some really helpful tips and tricks or ideas of areas to focus. Would have preferred a Q&A option with the two retailers to get into more detail about what had biggest impact and customer and team response to the changes.