In addition to fresh starts and earnest resolutions, January calls tens of thousands of retailers to New York City to convene for the largest industry conference of the year. The National Retail Federation’s annual Big Show is something altogether different than the glitz and glam of fashion week; instead, fashion takes a back seat to the vast array of technologies that power the truly complex behind-the-scenes processes that bring consumer products and experiences to life in-store and online.
In so many ways, a piece of apparel is nothing without an extensive web of people who make it happen—farmers, mills and warehouses, brands and designers, merchandisers and buyers, digital developers, store associates, and more. This interconnectedness came across loud and clear in 2020, as the concepts of sustainability, transparency and trust resonated across keynotes and breakout sessions. Retailers are feeling the same pressures we’re all feeling—we live in a changing, resource-limited world—and it’s time that retail changes, too.
Here are a few key themes from the event, resulting in actions that leading retailers are taking in 2020.
Reduce waste
Shelley Bransten, corporate VP of Retail and Consumer Goods Industries at Microsoft, began her session, “Retail 2020: The Dawn of Sustainability,” with some startling (and grave) statistics. Some 85 percent of apparel produced ends up in landfills, evidence of the impact of fast fashion and the large-scale challenge faced by retailers when it comes to predicting demand. It’s a challenge not limited to fashion brands—she said that one-third of all the food we produce is also wasted. And then we all know that packaging waste is astronomical, but a sobering fact fresh off the holiday season is that gift wrap accounts for 50 percent of the 85 million tons of annual paper waste.
[Related read: Why corporate sustainability is a mainstay in 2020 and beyond]
Part of the solution is about committing to sustainability efforts—perhaps by using blockchain technology throughout the supply chain to reduce carbon emissions and to provide consumers with more insight into where a product came from and how it reached the consumers’ door—but another piece is less obvious: AI. By bringing in artificial intelligence, companies can begin to build more predictable models to produce, or buy, only what will reasonably sell.
Part of the solution is about committing to sustainability efforts, but another piece is less obvious: AI.
Raise consumer confidence
New research from IBM, in partnership with NRF, reveals a sharp shift in consumer motivations when it comes to choosing who to buy from, especially among millennials and Gen Z, but truly across generations and around the world. The 2020 study on global consumer trends found that while 41 percent of consumers are value-driven, driven by price and convenience, another 40 percent are purpose-driven, choosing a brand because it aligns with their personal values. 84 percent of survey respondents say that trust is a top criterion when choosing a brand, and 71 percent are willing to pay a premium for transparency.
Trust and transparency come into play across many moments—or “micro-moments,” said Luq Niazi, global managing director, Consumer Industries for IBM. 71 percent of consumers shop while doing something else, so the need to provide contextual, relevant content is paramount—and that the brand experience, and what the brand preaches as its values, is consistent. That said, the “one brand” experience looks different online and in-store. Retailers rallied around the idea that digital customer experiences should be designed to be frictionless and fast, while brick-and-mortar customer experiences should be designed to be inspirational, personal, and experiential.
Retailers rallied around the idea that digital customer experiences should be designed to be frictionless and fast, while brick-and-mortar customer experiences should be designed to be inspirational, personal, and experiential.
“Driving confidence” is another way to say trust and transparency, said J. Crew’s Chief Customer Officer Billy May. He spoke on a panel around using AI to help make sense of customer preferences, sizing, and buying habits—all in service of providing that contextual, relevant content. Retailers like J. Crew, Boden, and Kenneth Cole Productions all use AI to take customer feedback and data and use it to give customers more of what they want.
Investing in the talent that makes this happen is also essential, according to Zeynep Ton, MIT professor and author of The Good Jobs Strategy: How the Smartest Companies Invest in Employees to Lower Costs and Boost Profits. The idea, a theme that has rung true since last year’s Big Show, is that “good jobs” employers don’t treat frontline associates like commodities or interchangeable parts. Ton, in conversation with Walmart U.S. CEO John Furner, discussed how this has become an essential talent strategy at Walmart. Coupled with a structure that intentionally “maximizes customer feedback” has, according to Furner, led to positive outcomes by providing what customers want with people empowered to deliver it.
[Related read: Want to provide great retail CX? Start with your employees]
Build what you need
In his opening keynote, Microsoft CEO Satya Nadella said the “Next retail innovation will not come from tech but from you as you build your own capability.” Retailers should use data to know its customers, create an intelligent supply chain and reinvent its business models, he said.
Technology has moved to a point where it can be commoditized so that retailers can connect systems to build bespoke and sophisticated solutions that will serve customers best, pairing their tech stacks with the human expertise needed to effectively guide AI and machine learning.
Retailers can connect systems to build bespoke and sophisticated solutions that will serve customers best, pairing their tech stacks with the human expertise needed to effectively guide AI and machine learning.
“You can never be too strategic about how you’re architecting your platforms,” said Carrie Tharp, VP, Retail for Google Cloud. Because it’s tough to know where technology or the industry is going, she said: “You have to make sure you’re skating to where the puck is going.”
Not every trend or technology is right for every business, but when it comes to technology, it’s vital that brands are connecting their channels for a 360-view of the customer, integrating data sources, using clean data to create personalized experiences, and using AI in targeted ways so that it can provide the most impact.
[Related read: From shopkeeper to “customer keeper”—how retail is shifting its focus]
Navigate the blurry line between consumer behavior and human behavior
Though market research tends to focus on what consumers want or when they take action, research highlights the importance of brands recognizing and being sensitive to macro trends that impact us all as human beings—consumer or otherwise.
Across demographics, globally, humans are burdened by a heightened sense of fear, according to Andrea Bell, Head of Insights at WGSN, a trend-forecasting and analytics company. From school shootings (which was more specific to the United States) to environmental concerns to financial uncertainty, the findings indicate that it’s a tough time to be a human. Headlines, meditation apps, and some of our own thoughts and feelings on the matter perhaps corroborate it further. Knowing this, brands can respond by organizing their businesses—social-media marketing or even the products themselves—to be an antidote to the anxiety instead of doubling down on the noise.
[Related read: Not all great customer experiences are convenient]
Get excited—it’s a good time to be a woman (employee or customer) in retail
As women across verticals continue shattering the glass ceiling (and glass walls, if you will), women leaders across retail came together to emphasize how a woman’s perspective—on a board of directors, a design review, or a strategy meeting—can spell success.
Jessica Laurea, VP Brand, S’well, explained that there’s no such thing as a single demographic any more. S’well is in the business of premium water bottles, but that doesn’t mean those customers wouldn’t be interested in a coupon or deem it necessary to derive value from a purchase. A shopper, she noted, could be in Neiman Marcus, Target, and Whole Foods all in the same day. Broadening our idea of who women are, as leaders, consumers, and human beings, is having a huge impact on how the business of retail is conducted.
And it was a female CEO who had the last word. In the closing keynote, goop founder and CEO Gwyneth Paltrow said, “I would like to help dispel this idea that women should be kept down or can’t talk about what they want or what they desire.” That’s what goop does, as she describes it—a “contextual commerce company” that provides the content women want, and then products that stem from the content.
This is the first in a series of retail insights from the 2020 Big Show. Next up: How retail is changing, from women leading the charge.
