NRF 2024 Recap
Steve White
Solutions Consultant / Vice-Chair NRF Industry Partner Council / Digital Retail Veteran / Commerce Experience Strategist
What follows is a bit of insight into the three days of my 13th(!) #Big Show. I have tried to make it brief, which was extra hard this year. Overall there was a tremendous air of positivity and great expectations for the year to come.
There is just so much to do, to see and to learn and with 40,000 attendees this year I can't get enough of reading about different experiences from colleagues, friends and industry leaders. Hopefully there are a few new takeaways for those who went and those who didn't make it this year.
Mind-blowing Announcement of the Show (IMHO)
FedEx announced they are launching a commerce platform! During an early session Raj Subramaniam, FedEx CEO, said “with this new platform we will be ready to democratize our data.”
FedEx acutely understands the consumer from a logistics perspective as they deliver 15 million packages a day and are preparing to deliver their share of what is expected to be $8T of online spending by 2026.
Other commerce platforms provide a ton of data on specific shoppers and their behaviors, but nobody else (aside from some early looks at ShopPay) can bring these types of insights:
?The ability for them to combine this information with either DTC or retailer sites will give new customer understanding and create…you guessed it…new marketing opportunities for both brands and retailers to leverage with existing and future customers.
?AI
Of course, #AI was the talk of the show, and every vendor had to find a way to incorporate it into their pitch…and their booth.
Unlike the recent trends (see Metaverse) everyone seems to have a clear picture on both the diversity of AI offerings and how they want/plan to activate them within their organizations.
Dan Crowe, CTO at RueGilt Groupe notes that “AI is not intimidating, which is what has led to rapid, widespread, adoption but brands and retailers need to be cautious and test their way into the applications that are right for their needs.”
Hal Lawton, President and CEO of Tractor Supply said “For us, AI IS customer service. It has enabled us to be smarter, better and faster in delivering what people expect from our stores.” They are deploying AI against their camera system that automatically understands if they need to open another register and the ‘system’ calls for it. They are also using AI with computer vision to track dwell time for outdoor parts of their store (like the riding lawnmower section) and deploy customer service when they determine a customer has interest.
Jenna Posner, CDO of SOLO Brands who spoke during a special Industry Partner breakfast I hosted at the show says…”(because of AI) I immediately removed by copywriters from doing product copy and imagery for sites and marketplaces and re-focused them on more creative endeavors in marketing, storytelling and content creation.”
Physical Retail Revolution
We heard it last year and all of 2023, people are returning to physical retail in droves with physical pacing the overall retail growth of 3.1%. This is especially true for GenZ who love to shop (maybe not transact ??) in the physical world. It is both entertainment and social interactions in person which they crave.
A new reality is the notion of physical retail influencing digital, a reverse from what many of us have been talking about for the past decade as digital found its footing.
The CEO of Glossier, Kyle Leahy, talked about how their stores are the physical manifestation of their brand, ”Channels and strategies evolve, your brand is yours.” She noted that the store is the ultimate way for consumers to feel and interact with their brand in a way that is not possible online.
While Shay Mitchell, founder of BEIS, talked about how bringing pop-ups is a way to extend their brand beyond DTC, which they will eventually need to meet the customer where they want to be. “We have had great success in both introducing the brand to people via pop-ups and getting current customers to realize our diverse product line. We plan on doing many more in 2024.”
Returns
Talk about returns was everywhere.
As expected there were a ton of reverse-logistics providers on the floor and I was very impresses on how focused they were/are on the consumer experience aspect of returns. goTRG played a big role in this year's show with a great booth and panel discussion Walmart & Lenovo on this very subject.
But it was not just about handling returns, new and improved 3rd-party solutions could be found everywhere on the show floor while retailers and brands alike talked about how to reduce returns. There are a number of new digital services, like Fabric, who believe that their AI products provide BOTH better search capabilities and better product information and confidence, both ways to reduce returns. Reducing returns really leads to our next topic...
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Sustainability
Multiple angles were discussed around sustainability to accompany new technologies on the show floor. Sustainability is really being discussed at all stages of the supply-chain from manufacturing through to purchase and even returns. In a new twist, people were NOT talking about carbon reduction (buying credits, alternate energy) like in past years.?
SHEIN, a Chinese eCommerce company, has already surpassed $30B in sales and recently (along with TEMU) has matched the online traffic of Target here in the US. And, unlike other companies (i.e. Wish) they are also driving sustainability through removing multiple steps in the supply-chain process and reducing waste when compared to companies like The Gap, Zara and others.
Steven Williams, CEO of PepsiCo Foods announced a 7-year partnership with $120M to support farmers in the US and Canada, understanding that “sustainability needs to occur at all stages of the supply chain and for us, that is farms.”
Marc Metrick, CEO of SAKS, talked about luxury resale and he said…”I like it, we like it. It creates sustainability and an entry point for consumers interested in luxury.” He likened it to leasing a car, especially for those who buy new and then re-sale. “You may spend $2,600 on a bag but know that you are going to resale it for $1,000 or $1,200 bringing the overall cost down.”
Loyalty
The NRF reports that in their most recent survey that 69% of consumers say that retailers and brands need to improve their loyalty efforts.
So many people are talking about loyalty and, as part of those discussions, a return to relevance for consumer-facing apps and a renewed relevance for DTC beyond GMV. Especially for Gen Z, Caleb Pearson, VP of Customer Engagement at McDonalds noted, “the exchange of data comes with high expectations and requires consistency of experience.” Consistency is also important to Linda Li, Head of Customer Activation at H&M – “GenZ loves our stores as part of the social and tactical interaction with the brand but expect seamlessness with our digital channels.”
Michelle Gass, Levi’s new CEO: “For brand and loyalty we are DTC first…not DTC only.”
Ann Piper, Head of NA, Spotify noted that “…understanding what is important to a group will enable you to provide what they want/need and loyalty comes from meeting that expectation,” in reference to GenZ’s desire for continuous learning via podcasts.
Hal Lawton, President and CEO of Tractor Supply says “we are constantly updating and refining our loyalty program to make it better, and it is working.” They have 33M loyalty customers which accounts for 75% of all sales, plus the surpassed $1B in eCommerce revenue and connect digital and physical through constant App updates.
Return to Apps…over the past few years, Apps haven’t received a lot of attention from retailers, but they seem to have renewed importance in the era of loyalty. For Ulta, their CEO Dave Kimbell reported…”For us 95% of our sales come through our loyalty program and 50% of our eCommerce sales come through the App(!). This has driven a 9% growth in Q3 of last year and we need to constantly improve our program to stay competitive.”
Retail Media?
Retail media was not talked about at this show (in sessions or on the floor) in the same way we heard at ShopTalk last March. Those conversations largely centered on the buy-side of RMNs and how to help brands navigate, plan and measure.
While some sessions still covered the buy-side topics, including a deep-dive session on Saturday, there seemed to be three distinct conversations going on involved for the sell-side:
Retail Media Part 2 – 7-11
One new(ish) retail media network of note is coming from 7-11. Aside from using clever branded terms like Brainfreeze, ICE and GULP, Marissa Jarratt, 7-11’s Chief Marketing and Sustainability Officer, talked about many new opportunities to reach a very unique customer.
The notion of an “Immediate Consumption Ecosystem” with store-level customization and data (across their 13,000 stores and 12M customers…some visiting 2x or 3x per day) give the ability to rapidly “validate what customers say vs. what they do to optimize spend for brands.”
Next, they are launching a radio network which immediately makes them the largest-reach radio station in America. They think this will provide both “immediacy and intimacy” for brands who want to do audio advertising on the network.
Great Outlook for 2024
“We are living through an unprecedented time,” according to Steve Liesman, Sr. Economics Reporter for CNBC. Over the past 50 years, every time these economic factors have existed (Low unemployment, rapid growth and FED raising interest rates) the US experienced a recession shortly after.
“We believe the reason this is different is because employee productivity is at an all-time high.” The question is what is driving the productivity increase? Is it AI and better digital tools, the work-from-home part of the pandemic or are employees spending more (unpaid) time on the job?
Either way, NRF Chair and Walmart's John Furner is bullish on retail outpacing the 3.1% from 23 this year, let's make it count!